Independent, Fee-Only Financial Advisor

Independent, Fee-Only Financial Advisor

Tuesday, May 23, 2017


Twitter is a wonderful place. While it can be a mess at times, it gives you access to follow the thoughts of a huge variety of people. One who I have been paying attention to lately is former Navy SEAL and leadership trainer Jocko Willink. While a lot of his exhortations center around exercise, the lessons are meant to be taken and applied to other areas. Naturally, I started seeing how to apply them to personal finance.

Decisions decisions indeed. Small decisions can have a huge impact on your financial situation. Here are three decisions you can make to have a positive impact on your finances.

  1. When faced with a large expense, are you going to take a hard look at your options and get the best deal you can or are you going to just accept the easiest option? Housing and transportation are huge and complex expenses for most American's budgets. Faced with huge and complex decisions, many people are at an information disadvantage. Considering how much money is at stake, when contemplating a move or purchase of a new vehicle, you need to take a step back for a good overview, and lean on unbiased advice when you are not sure. Take a step back and get an unbiased opinion. Locking yourself into large financial decisions may be unavoidable, but getting the best deal here will make the biggest impact on your savings.
  2. When the market declines, are you going to continue to invest or pull everything out? If you have an investment account, watching the price decline during a market pullback can be difficult. If your account is appropriately allocated, and your time horizon is still long enough, no action may be the best action when the market declines. In fact, if you are young and still adding to your portfolio, you may be setting yourself up for outsized gains in the future.
  3. Will you commit to making saving a habit or will you put it off until "next month"? Saving is a habit. Even when you can only start with a small contribution to your savings account, it matters. $10 each week may not seem like much, but raising that regularly translates to a lot saved over time. There is no real magic to financial security - you need to spend less than you make, and putting away a little bit at a time is a worthwhile habit to get into.

Getting your finances into shape takes discipline, regardless of your starting point. If you don't feel you have enough to make ends meet now, but know you are in for a raise or a windfall later, you may put off getting started on a financial plan. We all know what happens next, the raise or windfall comes and it gets spent amidst a flurry of justifications. If you start good habits early on, you will be in much better shape as your income rises. Develop a payment plan for your bills that keeps you current and avoids late fees, look for better deals on regular expenses like phone and internet bills, stash some money in an emergency savings account and then take advantage of payroll deductions for a retirement plan if your employer offers it. Do the work to set yourself up for financial success - even when you don't feel it is possible.

People work, earn money and spend money for a large part of their lives. If you do not get yourself in good financial habits, you will be in poor shape for a long time. Motivational tips like these from Jocko can be easily applied to your financial life - just get to it!