Published by Daniel Morrison, Wealth Advisor
When I was younger, I had a very simplistic view of money: earn it, spend it, and then do it all over again. It was very black and white.
As someone who has been in the financial industry for almost 30 years, I know now that there is so much more to personal finances than the earning-and-spending cycle. There is budgeting, saving, investing, and so many more things I wish I had known about money when I was younger.
If I could hop into a time machine and go back to my childhood, this is the advice I would give my younger self regarding money.
Debt Can Be Explosive
Debt is not always bad. In fact, it can be great depending on what it is. The best example of this is a home loan. Yes, the homebuyer is bound financially and legally to pay off the purchase price of their dwelling over a 15- or 30-year span of time. However, home loans come with tax benefits. Depending on the stage, a homeowner can deduct their annual mortgage payments or qualify for a tax credit. So long as the homeowner continues to build principle and pay down their mortgage, this qualifies as debt that is not only manageable but has benefits as well.
However, when debt is not addressed correctly, it can take a turn for the worse. If a homeowner falls behind on their mortgage payments, then it does not matter what kind of tax benefits come with the home loan. He or she stands to get in trouble with the bank, fall even further behind on his or her payments, and risks losing the home altogether.
Bottom line: Just be aware that debt can work in your favor or work against you.
Delayed Gratification Is Wonderful
Many people fall prey to spending money with only the short-term gratification in mind. While impulsive buys can bring momentary joy and satisfaction, this tactic does not work for long-term goals that require a greater amount of capital and savings. Holding off on non-urgent purchases and gradually saving every penny may be difficult for most, but the payoff is huge as it allows for the attainment of big goals such as a new home, a new car, or a dream vacation.
The bottom line: Delayed gratification is wonderful as it makes it possible to create the life you want down the road.
Keep Track Of Your Money, Always Save First
Knowledge is power. The more you know about how much money you have and how much you are spending, the more control you have over your finances and your future. Keeping track of your money will allow you to understand what purchases are necessary, what purchases can be adjusted, and what purchases can be cut out completely. Once you have the full picture of what is really going on with your budget, it is then easier to figure out how to put a little bit of money into savings every month. Saving money not only protects you for a rainy day, but it can give you more financial freedom.
The bottom line: Know where your money is going and figure out how to start adding money to your savings account on a regular basis.
Seek The Advice Of An Expert
Money is not something to take for granted. Not only does it give us access to bare necessities such as food, shelter, and water, but it also has the ability to give us the things we desire (e.g., trips around the world or a confident retirement). If you are unsure how to best utilize your money without getting overwhelmed with fear and anxiety, the shortest path to success is to seek a financial expert who can help. A financial expert can crunch all your numbers together and figure out a plan that will help you reach your goals in a better—and faster—way.
The bottom line: If you are unsure how to approach your finances, find a financial advisor who can help you. Don’t be afraid to ask for help.
It Is Never Too Late
Although there are a lot of things I wish my younger self had known about money, I am a firm believer that it is never too late for anyone, of any age, to work towards the financial success they have always desired. When it comes to money, timing is not so much of an issue; it’s awareness and the ability to make educated decisions when handling your money.
Are you ready to learn about other ways to stay within your budget? Contact our office at Jacob William Advisory by calling 410-821-6724 or emailing [email protected]. You can even take our Risk Tolerance Questionnaire at https://client.jacobwilliam.com/survey/.
About Dan
Daniel Morrison is the co-founder and Managing Partner of Jacob William Advisory, a wealth management firm whose sole mission is to service their clients’ needs beyond their expectations. Dan Morrison has 27 years of industry experience, and for the past decade, he has been committed to building Jacob William Advisory into one of the foremost wealth advisory firms. Dan graduated from Towson University with a bachelor’s degree of finance in economics and obtained his master’s degree in finance from the University of Baltimore. He is a CERTIFIED FINANCIAL PLANNER™ professional and holds the designations of Chartered Financial Consultant® (ChFC), Chartered Life Underwriter (CLU), and Chartered Advisor for Senior Living (CASL). He and his wife Beth reside outside of Baltimore, Maryland, and have three wonderful children. Dan is involved in his church and is a board member for Believe Big, a charity whose mission is to help families navigate the cancer journey. He enjoys spending time with his family, playing golf, and sailing. A good book is also never far from his reach. Learn more about Dan by connecting with him on LinkedIn.
