No matter where you are in your financial journey, the ability to build a strong financial foundation is key to long-term success. Whether you’re just beginning to manage your own money or looking to refine and optimize your financial habits, the choices you make today will have a lasting impact on your future.

Financial growth is a continuous process—the seasons of our financial life are continually changing. As time moves forward, you begin to take on a greater number of responsibilities and perhaps risks, both personally and professionally. 

You take it all in, learn from your mistakes, map out a path forward and make shifts to your plans over time as your life inevitably changes. 

One of the single most important tools to successfully navigate this journey is sound money management that supports both your current lifestyle and long-term wealth-building ambitions.

I can’t emphasize this enough! Building smart money habits as early on as possible in your wealth-building journey will benefit you for years and years to come. 

That said, most of us did not receive any formal education around financial literacy or money management when we were growing up, leaving many unsure of where to even begin. 

The good news is that it’s never too late to start, and there is no better time than the present to begin building a strong financial foundation. 

Below are my top five strategies to build a Strong Financial Foundation

1. Spend Less Than You Earn

Where your focus goes, money flows. You can’t afford to ignore your finances! Be sure you’re giving yourself a financial wellness check on a regular basis to build awareness around cash flow and create a conscious spending plan that is in alignment with your core values and current goals. 

• Put eyes on your spending and your income on a weekly basis, at a minimum. Understand how much is coming in and have a good handle on what is going out. This will make it easier for you to prioritize and manage the goal of spending less than you earn.

• Create a budget that provides you with rough parameters on how you delegate your income. The 50/30/20 Budget is a great place to start (50% on necessities, 30% on wants, and 20% on investing, saving, and/or paying down debt). (Over time, the ultimate goal will be to have all your goals automated and have more flexibility with your cash flow than having to adhere to a specific budget.)

2. Leverage Your 401K and Roth IRA

When you first start to prioritize investing, I recommend you look into how to best leverage your employer provided retirement account (401K, 403b, 457, etc) and separate Roth IRA (if eligible). 

• 401K: Revisit your plan documents to get an understanding of your options, including guidelines around your employer match. This is “free” money being added to your retirement savings and part of your compensation. Take advantage of the employer match, at a minimum. Learn to live on a little less so you can receive this benefit. 

• Roth IRA: A Roth IRA is an incredible investment account that I could make a strong argument that most will want for their future. Your income grows tax FREE within this account and future withdrawals are tax free if you adhere to the IRS guidelines. Tax-free growth and withdrawals will have a meaningful impact on the value of your account over time!

3. Use Your Credit Card Wisely

Many people are surprised to hear this, but I actually prefer credit cards to debit cards and/or cash as a primary payment method. The points and rewards systems have come a long way and, in my mind, make this a no-brainer. That said…

• The Golden Rule for Credit Card Usage: When using a credit card, adopt the mindset that you will only purchase what you can afford to pay off in full TODAY. Your goal isn’t to buy things now that you think you’ll be able to afford later — you are simply using a credit card to pay for your lifestyle that you have the means to pay for and take advantage of the points or rewards benefits. 

4. Prioritize Your Emergency Savings

Peace of mind is priceless. When the unexpected pops up, you’ll be able to breathe easier knowing you’ve put a plan in place to handle whatever comes your way without going into debt or selling investments prematurely.  

• For those without mortgage payments and/or dependents: I would advise having around 3 months’ worth of monthly spending set aside. 
• For homeowners and parents: I would bump up your emergency savings goal to a total of 4 to 6 months’ worth of monthly spending.

If you are saving for something specific, like a down payment on a home, a vacation, a home repair, etc., these funds should be in a separate, goal-specific savings account or accounted for separate and apart from your Emergency Savings. 

5. AUTOMATE Monthly Payments

Automation will do two things for you: create simplicity and force you to learn to live on a little less. Every little bit counts — so start off small with what you can manage, and over time, increase it as appropriate. It’s most important that you’re taking steps NOW to create the habit.  

I advise all my clients to automate the following: 

• Investment Contributions – Roth IRA, taxable investment account, kids 529s, etc.

• 401K contributions (through your paycheck) 

• Credit card payments (full amount due each month)

• Bills (monthly, recurring)

• Additional debt 

• Emergency savings or goal specific contributions 

Lay the Groundwork for a Strong Financial Foundation and Future  

As a parent, I’m always looking for opportunities to teach my boys about the importance of responsible money management (even if it won’t apply until they are much older). And I want this same level of abundance for you and your loved ones! Understand and execute these 5 money moves to achieve financial independence, security, and success throughout your life.

Take the road less traveled and prioritize your financial education today. Learn more about ways to work with me to create a financial plan that adapts to life’s continual changes, matches the ambition behind your goals, and allows you to focus on what matters — building the future you really want for yourself and the people you love.