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Five Key Items to a Strong Financial Foundation

Updated: Oct 29, 2021

Chuck Rose, CIMA

We live in a time with plenty of distractions. Every once in a while it can help to stop and “tune in” to get back to the foundational basics. A financial plan and taking action can leave your family in better shape in just a few key steps. The time is now, and the efforts in building a strong financial foundation are well worth it. Your family and life are waiting for you to get back to make great memories and leave your mark. Let’s discuss five key items to a strong financial foundation along with how to literally give yourself a “bonus” by being in a position to be charitable.

Protection shouldn’t wait:

According to LIMRA (Life Insurance and Market Research Association) research more families than ever own life insurance, but many are under potentially under insured(1). Especially if you have dependents, you should periodically review that your insurance covers what you intend-not just final expenses but also lost income to support your family if you pass away early. More people than ever are getting insurance from their group plan, but there is some risk of losing that coverage if you change your career or lose your job. Women and Millennials are also often under covered compared to married men. There are stories abound about people who pass away too young without the proper coverage. Make this a priority today and protect your family and your

legacy in a way that fits your budget and financial plan.

Saving for retirement is a path best started early as possible:

According to recent research highlighted by Fidelity(2), average retirement account balances are at an all-time high which is great news. However, with any average comes extreme high and low examples as well, so let’s do better. Einstein was quoted saying “Compound interest is the eighth wonder of the world. He who understands it, earns it… he who doesn’t pays it”.

With nine years of market growth under our belt by many US Equity index measures, now is a better time than ever

to review your retirement track and have the answer to some important questions. What is your projected income at your target retirement age with what you have now? What can you do to improve that target income? What do you own and what risks do they bring to your portfolio?

Call the final shots:

Survey after survey shows way too many Americans are without a will and medical directive. A recent survey by says only 36% of individuals with children under 18 have a will in place.(3) If you do not want a courtroom to decide what happens to your assets and who will care for your children in the event of your passing, then start working on a plan today.

A budget that includes paying yourself first:

It would be hard to find someone who has never heard of the concept of “paying yourself first” but is also one

of those concepts that is simply easier said than done. Sure, work sponsored retirement plans have somewhat made it easier, but it is all the other aspects of life that can throw this off track- car payments, home maintenance, eating at restaurants and vacations to name a few. According to a study(4), 78% of Americans live paycheck to paycheck. This includes one in ten workers who make over $100k!

By spending a little time on a budget whether it is on a piece of paper, a spreadsheet, or with your financial planner, you are likely to find “lost money” and be able to better put it to work! Be sure and include retirement savings, debt payments and maintenance of your emergency account in your bud

get. Public figure Dave Ramsey offers spreadsheets and tips on his website(5), and one we think is powerful is to sit down before each month, with your spouse if you are married, and figure out the specific budget for that month including special expenses.

Einstein would likely tell you to stay away from debt

Back to his quote on interest- (he who doesn’t understand interest, pays it):

Have a plan for your d

ebt. Use your budget and earnings to reduce and eliminate debt wherever possible. Can you eliminate all of your non-home debt? Can your home be paid off before retirement regardless of your loan term? According to the same survey 3 out of 4 workers are currently in debt and think they will always be. Think long term and avoid new debt whenever possible. This can drastically help your budget, long term savings and your need for it in the future.

Being charitable is literally a bonus:

Some of these points can be pretty heavy, but it is really special moments and purpose that should really drive our lives. Time and health is really the ultimate wealth. When you have your financial foundation covered, you should be more free to spend time with loved ones, as well as give time or donations to your de

arest charities as well.

Any quick google search about charity and happiness will provide you with worthy information, but some recent research shows that charity doesn’t just correlate with higher income, it actually causes it!(6) If you are feel like charity is only for millionaires, this study used $100 in charitable giving as a benchmark!

You do not need to be a billionaire to le

ave a legacy. The time is now to build your financial foundation and leave your mark.


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