Setting financial goals is like hanging a map on your wall to inspire and motivate you to accomplish your travel bucket list.

Your map might have your future adventures outlined with tacks and twine. It may be patched with pictures snipped from travel magazines. You would know every twist and turn by heart. But to get where you want to go, you still have to make a few real-life moves toward your destination.

Here are 5 tips for making money goals that may help you get closer to your financial goals:

1. Figure out what’s motivating your financial decisions. Deciding on your “why” is a great way to start moving in the right direction. Goals like saving for an early retirement, paying off your house or car, or even taking a second honeymoon in Hawaii may leap to mind. Take some time to evaluate your priorities and how they relate to each other. This may help you focus on your financial destination.

2. Control Your Money. This doesn’t mean you need to get an MBA in finance. Controlling your money may be as simple as dividing your money into designated accounts, and organizing the documents and details related to your money. Account statements, insurance policies, tax returns, wills – important papers like these need to be as well-managed as your incoming paycheck. A large part of working towards your financial destination is knowing where to find a document when you need it.

3. Track Your Money. After your money comes in, where does it go out? Track your spending habits for a month and the answer may surprise you. There are a plethora of apps to link to your bank account to see where things are actually going. Some questions to ask yourself: Are you a stress buyer, usually good with your money until it’s the only thing within your control? Or do you spend, spend, spend as soon as your paycheck hits, then transform into the most frugal individual on the planet… until the next direct deposit? Monitor your spending for a few weeks, and you may find a pattern that will be good to keep in mind (or avoid) as you trek toward your financial destination.

4. Keep an Eye on Your Credit. Building a strong credit report may assist in reaching some of your future financial goals. You can help build your good credit rating by making loan payments on time and reducing debt. If you neglect either of those, you could be denied for mortgages or loans, endure higher interest rates, and potentially difficulty getting approved for things like cell phone contracts or rental agreements which all hold you back from your financial destination. There are multiple programs that can let you know where you stand and help to keep track of your credit score.

5. Know Your Number. This is the ultimate financial destination – the amount of money you are trying to save. Retiring at age 65 is a great goal. But without an actual number to work towards, you might hit 65 and find you need to stay in the workforce to cover bills, mortgage payments, or provide help supporting your family. Paying off your car or your student loans has to happen, but if you’d like to do it on time – or maybe even pay them off sooner – you need to know a specific amount to set aside each month. And that second honeymoon to Hawaii? Even this one needs a number attached to it!

What plans do you already have for your journey – and will they bring you closer to your financial destination?

When I say “buying a house,” what kind of insurance do you think of?

When I say “buying a house,” what kind of insurance do you think of?

Homeowners insurance. Obvious, right? But there’s another type of insurance you should consider with a few amazing-yet-unexpected benefits for new homeowners. Give up? It’s… life insurance.

Mortgage payments and the cost of upkeep won’t stop with an untimely passing. Life insurance is a significant tool for homeowners because it’s a great way to help protect your loved ones from a sudden and unexpected financial burden.

Your family wouldn’t have to lose their home because of missed payments, and if you cosigned a mortgage with someone outside your nuclear family, the benefits of life insurance have the potential to cover your contribution for a time, not leaving that friend or business partner in a financial bind.

As for the upkeep of your home, a general rule of thumb is to set aside 1% annually of the purchase price of the house for routine repairs and/or maintenance.¹ For instance, if you paid $250,000 for your home, set aside $2,500 each year. So if you’ve already had to convince yourself that the hole in the roof is almost, sorta, kind of the same as that skylight you always wanted to put in, just imagine what your family might experience if the income you or your spouse provides was no longer available.

Life insurance is vitally important for any young family just starting out.

Milestones like owning a home, having a baby, and saving for the future are new challenges, and a solid life insurance strategy can help with accommodating the needs of a growing family in a new phase of life.

A life insurance policy’s benefits can replace income, pay off debts, cover funeral costs, finance long-term care, and much more. And replacing income doesn’t refer only to the income provided by one working parent. Replacing the loss of income provided by a stay-at-home parent is just as important.

According to a 2019 survey, the salary of a stay-at-home mom is $178,201.¹ That number factors in important services like childcare, keeping up the household, and transportation. And sudden loss of those services can be devastating to the way a family functions and expensive to replace.

Stay-at-home parents need life insurance coverage, too.

Debit and credit cards are convenient.

Just swipe and go. Even more so for their mobile phone equivalents. We like fast, we like easy, and we like a good sale. But are we actually spending more by not using cash like we did in the good old days?

When using plastic, the reality of the expense doesn’t sink in until the statement arrives. And even then it may not carry the same weight. After all, you only need to make the minimum payment, right? With cash, we’re more cautious – and that’s not a bad thing.

Try an experiment for a week: pay only with cash. When you pay with cash, the expense feels real – even when it might be relatively small. Hopefully, you’ll get a sense that you’re parting with something of value in exchange for something else. You might start to ask yourself things like “Do I need this new comforter set that’s on sale – a really good sale – or, do I just want this new comforter set because it’s really cute (and it’s on sale)?” You might find yourself paying more attention to how much things cost when making purchases, and weighing that against your budget.

If you find that you have money left over at the end of the week (and you probably will because who likes to see nothing when they open their wallet), put the cash aside in an envelope and give it a label. You can call it anything you want, like “Movie Night,” for example.

As the weeks go on, you’re likely to amass a respectable amount of cash in your “rewards” fund. You might even be imagining about what to do with that money now. You can buy something special. You can save it. The choice is yours. Well done on saving your hard-earned cash.

It’s your lucky day and you’re flush with cash.

Maybe you just got a bonus at work, or a tax refund, or won that scratch-off lottery ticket. Hold up. Don’t spend it all just yet. There are some great ways you can put that windfall to work for you before it disappears during a spontaneous shopping spree.

1. Pay off those credit cards. This may not seem like quite as much fun as the Paris vacation you were daydreaming about – but paying down debt is like finding money every single month. Paying down debt is the fastest way to give yourself a monthly raise if you come into some unexpected cash.

2. Save it. Experts recommend that you have enough savings to cover at least 3 to 6 months of expenses. This is the perfect opportunity to break away from the statistics and get prepared. Consider setting up a designated checking account that allows easy access to your savings.

3. Put it in the college fund. If you have kids, this is a great time to contribute to the college fund or to start one if you haven’t already. Tuition can range from around $10,000 for in-state public schools to nearly $35,000 for private schools (1). And that’s not counting books and boarding! It’s never too early to give your kids a head start!

4. Invest in yourself. This might be the perfect chance to finish off those last few credits for a degree or to earn that certification you’ve been wanting but couldn’t justify spending money to complete. If you choose carefully, the right degree or certification can open doors in your career, potentially enhancing your earning power and helping you break out of the holding pattern.

5. Take a vacation. Maybe it’s a trip to Paris or maybe it’s someplace else you’ve always wanted to go. If all the above are in good shape, go ahead and treat yourself. You deserve it!

Nearly one quarter of Americans and almost half of Canadians have no emergency savings, according to a recent report. (1&2)

Without an emergency fund, you can imagine that an unexpected expense could send your budget into a tailspin. That’s why building an emergency fund is so important. You CAN do this!

4 tips to building your emergency fund

Where to keep your emergency fund. Keeping money in the cookie jar might not be the best plan. Mattresses don’t really work so well either. But you also don’t want your emergency fund blended with the money in your normal checking or savings account. The goal is to keep your emergency fund separate, clearly defined, and easily accessible. Setting up a designated savings account is a good option that can provide quick access to your money while keeping it separate from your main bank accounts.

Set a monthly goal for savings. Set a monthly goal for your emergency fund savings, but also make sure you keep your savings goal realistic. If you choose an overly ambitious goal, you may be less likely to reach that goal consistently, which might make the process of building your emergency fund a frustrating experience. (Your emergency fund is supposed to help reduce stress, not increase it!) It’s okay to start by putting aside a small amount until you have a better understanding of how much you can really “afford” to save each month. Also, once you have your high-yield savings account set up, you can automatically transfer funds to your savings account every time you get paid. One less thing to worry about!

Spare change can add up quickly. The convenience of debit and credit cards means that we use less cash these days – but if and when you do pay with cash, take the change and put it aside. When you have enough change to be meaningful, maybe $20 to $30, deposit that into your emergency fund. Look into ways of automating your savings to make putting away money seamless and hassle free!

Get to know your budget. Making and keeping a budget may not always be the most enjoyable pastime. But once you get it set up and stick to it for a few months, you’ll get some insight into where your money is going, and how better to keep a handle on it! Hopefully that will motivate you to keep going, and keep working towards your larger goals. When you first get started, dig out your bank statements and write down recurring expenses, or types of expenses that occur frequently. Odds are pretty good that you’ll find some expenses that aren’t strictly necessary. Look for ways to moderate your spending on frills without taking all the fun out of life. By moderating your expenses and eliminating the truly wasteful indulgences, you’ll probably find money to spare each month and you’ll be well on your way to building your emergency fund.

It’s no secret that life is full of surprises. Surprises that can cost money.

Sometimes, a lot of money. They have the potential to throw a monkey wrench into your savings strategy, especially if you have to resort to using credit to get through an emergency. In many households, a budget covers everyday spending, including clothes, eating out, groceries, utilities, electronics, online games, and a myriad of odds and ends we need.

Sometimes, though, there may be something on the horizon that you want to purchase (like that all-inclusive trip to Cancun for your second honeymoon), or something you may need to purchase (like that 10-years-overdue bathroom remodel).

How do you get there if you have a budget for the everyday things you need, you’re setting aside money in your emergency fund, and you’re saving for retirement?

Make a goal. The way to get there is to make a plan. Let’s say you’ve got a teenager who’s going to be driving soon. Maybe you’d like to purchase a new (to him) car for his 16th birthday. You’ve done the math and decided you can put $3,000 towards the best vehicle you can find for the price (at least it will get him to his job and around town, right?). You have 1 year to save but the planning starts now.

There are 52 weeks in a year, which makes the math simple. As an estimate, you’ll need to put aside about $60 per week. (The actual number is $57.69 – $3,000 divided by 52). If you get paid weekly, put this amount aside before you buy that $6 latte or spend the $10 for extra lives in that new phone game. The last thing you want to do is create debt with small things piling up, while you’re trying to save for something bigger.

Make your savings goal realistic. You might surprise yourself by how much you can save when you have a goal in mind. Saving isn’t a magic trick, however, it’s based on discipline and math. There may be goals that seem out of reach – at least in the short-term – so you may have to adjust your goal. Let’s say you decide you want to spend a little more on the car, maybe $4,000, since your son has been working hard and making good grades. You’ve crunched the numbers but all you can really spare is the original $60 per week. You’d need to find only another $17 per week to make the more expensive car happen. If you don’t want to add to your debt, you might need to put that purchase off unless you can find a way to raise more money, like having a garage sale or picking up some overtime hours.

Hide the money from yourself. It might sound silly but it works. Money “saved” in your regular savings or checking account may be in harm’s way. Unless you’re extremely careful, it’s almost guaranteed to disappear – but not like what happens in a magic show, where the magician can always bring the volunteer back. Instead, find a safe place for your savings – a place where it can’t be spent “accidentally”, whether it’s a cookie jar or a special savings account you open specifically to fund your goal.

Pay yourself first. When you get paid, fund your savings account set up for your goal purchase first. After you’ve put this money aside, go ahead and pay some bills and buy yourself that latte if you really want to, although you may have to get by with a small rather than an extra large.

Saving up instead of piling on more credit card debt may be a much less costly way (by avoiding credit card interest) to enjoy the things you want, even if it means you’ll have to wait a bit.

Plenty of people move back in with their parents.

Data found that 37% of Californians and close to 1.9 million people in Canada between 18 and 64 live with their parents (1 & 2). That might not sound ideal, but is it really that bad? Here are some pros and cons to consider before deciding to move back home.

Pros: Living with your parents isn’t necessarily the end of the world. For starters, it might be cheaper than renting an apartment or buying a house, depending on the deal your parents offer you. Negotiating rent with your mom is typically easier than wrangling with a landlord! On that note, at home you’ll be surrounded by people who love you. That can be a serious boost to your mental health and give you some footing for your next move. And you can’t forget that free food is awesome. (If that’s part of the deal!)

Cons: But moving back in might not necessarily be all rainbows and sunshine. It can be incredibly demoralizing for many people. We tend to estimate our self-worth and how much we’ve accomplished by our independence from our parents. It’s easy to see living with our parents as a step back. Plus, it can encourage laziness. Not having to hustle for food and rent can remove a sense of urgency from your work. Nothing motivates you quite like the imminent threat of bankruptcy!

If you have to move back in with your parents, do it with a plan. Maybe you give yourself six months at home to get your business off the ground. Your goal might be more long-term like caring for a parent. Just remember to take it in stride and don’t let it derail your life!

Graduating from college is a big deal.

It represents a transition from student to adult for millions of people. But leaving university and joining the workforce can be intimidating. Looking for a job, paying bills, commuting, and living independently are often uncharted territory for recent grads.

Here are a few tips for fresh graduates trying to get on their feet financially.

Figure out what you want. It’s one thing to leave college with an idea of what career you want to pursue. It’s something else entirely to ask yourself what kind of life you want. It’s one of those big issues that can be difficult even to wrap your head around!

However, it’s something that’s important to grapple with. It will help you answer questions like “What kind of lifestyle do I want to live” and “how much will it cost to do the things I want?” You might even find that you don’t really need some of the things that you thought were necessities, and that happiness comes from places you might not have expected.

Come up with a budget. Let’s say you’ve got a ballpark idea of your financial and lifestyle goals. It’s time to come up with a strategy. There are plenty of resources on starting a budget on this blog and the internet on the whole, but the barebones of budgeting are pretty simple. First, figure out how much you make, how much you have to spend, how much you actually spend, then subtract your total spending from how much you make. Get a positive number? Awesome! Use that leftover cash to start saving for retirement (it’s never too early!) or build up an emergency fund. Negative number? Look for places in your unnecessary spending to cut back and maybe consider a side hustle to make more money.

Looking at your spending habits can be difficult. But owning up to mistakes you might be making and coming up with a solid strategy can be far easier than the agony that spending blindly may bring. That’s why starting a budget is a post-graduation must!

Meet with a financial professional. Find a qualified and licensed financial professional and schedule an appointment. Don’t let the idea of meeting with a professional intimidate you. Afterall, you trust your health, car, and legal representation to properly trained experts. Why wouldn’t you do the same with your financial future?

Being scared of starting a new chapter of life is natural. There are a lot of new experiences and unknowns to deal with that come along with leaving the familiarity of college. But the best way to overcome fear is to face it head on. These tips are a great way to start taking control of your future!

It’s late Friday afternoon. Your to-do list is a crumpled, coffee-stained memory in the bottom of your wastebasket. Another great week in the books!

But as you head out for a night on the town with friends or maybe cuddle up next to your kids to watch their favorite movie, did you ever consider how you spent your after-work time during the week?

Whether you’re routine-driven, a free spirit, or somewhere in between, setting aside a few minutes every day to spend on your finances has the potential to make a huge difference in the long run. By adding these 3 financial habits to your daily routine, you have the potential to give yourself a little more power over your finances.

1. Check your inbox (or mailbox). Whether you pay your bills via credit card, automatic withdrawal, or a hand-written check that you mail in to the company, a daily look-see will help you stay on top of any alerts you get. Spend a few minutes every day glancing over incoming bills, payment receipts, and new online transactions. Being aware of the exodus (or pending exodus) of your money can help fend off late fees, overdrawing your accounts, or maxing out your credit card.

2. Review your spending. Every evening, take quick stock of any spending you did that day – whether in brick-and-mortar stores or online. This exercise can be eye-opening. For instance, are you in the habit of grabbing a piping hot cup of coffee from the drive-thru on your morning commute? Depending on your coffee preference, that can cost up to $5 a day! Maybe 5 bucks isn’t a huge deal, but consider this:

• $5 for coffee x 5 days a week = $25
• $25 a week x 4 weeks/month = $100
• That’s $100 per month spent on coffee!

Just staying aware of those little daily expenditures may make a huge difference in your financial health; when you know how much you’re paying over time for something you could prepare at home (for far less money), you may decide to scale back on the barista-brewed coffee so you can help boost your financial future – and keep yourself on the path to financial independence.

3. Learn a little more. Knowing how money works is a vital part of achieving and maintaining financial independence. Taking a few moments every day to educate yourself a little more about money can make a huge difference in the long run. It can keep you aware of best practices for money management and all the ways your money can work for you. Try a blog post, YouTube video, or a best-seller on finances to keep yourself informed and up to date.

As you start putting these simple financial habits in place, contact me any time! Together we can assess how these small changes could help strengthen your financial strategy and get you closer to financial independence.

We’ve all probably heard someone talk on social media about their “hustle” or “side gig.”

It’s in style; and it makes sense—and cents? Gigs are now just a click or tap away on most of our devices, and a little extra money never hurts! Here are a few things to consider when starting up a side hustle.

What are your side hustle goals? We typically think of a side hustle as being an easy way to score a little extra cash. But they can sometimes be gateways into bigger things. Do you have skills that you’d like to develop into a full time career? A passion that you can turn into a business? Or do you just need some serious additional income to pay down debt? These considerations can help you determine how much time and money you invest into your gig and what gigs to pursue.

What are your marketable skills? Some gigs don’t require many skills beyond a serviceable car and a driver’s license. But others can be great outlets for your hobbies and skills. Love writing? Start freelancing on your weekends. Got massive gains from hours at the gym and love the outdoors? Start doing moving jobs in your spare time. You might be surprised by the demand for your passions!

Keep it reasonable. Burnout is no joke. Some people thrive on 80 hour work weeks between jobs and side hustles, but don’t feel pressured to bite off more than you can chew. Consider how much you’re willing to commit to your gigs and don’t exceed that limit.

One great thing about side hustles is their flexibility. You choose your level of commitment, you find the work, and your success can depend on how much you put in. Consider your goals and inventory your skills to get there—and start hustling!

The kids (finally) moved out!

Now you can plan those vacations for just the two of you, delve into new hobbies you’ve always wanted to explore… and decide whether or not you should keep your life insurance as empty nesters.

The answer is YES!

Why? Even though you and your spouse are empty nesters now, life insurance still has real benefits for both of you. One of the biggest benefits is your life insurance policy’s death benefit. Should either you or your spouse pass away, the death benefit can pay for final expenses and replace the loss of income, both of which can keep you or your spouse on track for retirement in the case of an unexpected tragedy.

What’s another reason to keep your life insurance policy? Some life insurance policies have cash value. Now that the kids have moved out and are financially stable on their own, the cash value of certain life insurance policies can be used for retirement or an emergency fund. If your retirement savings took a hit while you helped your children finance their college educations, your life insurance policy might have you covered. Utilizing the cash value has multiple factors you should be aware of before making any decision.*

It might be uncomfortable to think about the need for life insurance, but it’s an important part of your family’s financial strategy.

It helps protect your family during the grieving process, gives them time to figure out their next steps, and can provide income to cover normal bills, your mortgage, and other unforeseen expenses.

Here are some guidelines to help you figure out how much is enough to help keep your family’s future safe.

Who needs life insurance? A good rule of thumb is that you should get life insurance if you have financial dependents. That can range from children to spouses to retired parents. It’s worth remembering that you might provide financial support to loved ones in unexpected ways. A stay-at-home parent, for instance, may cover childcare or education costs. Be sure to take careful consideration when deciding who should get coverage!

What does life insurance cover? Life insurance can be used to cover a variety of unexpected expenses. Funeral costs or debts can potentially be financial and emotional strains, as can the loss of a steady income and employer-provided benefits. Think of life insurance as a buffer in these situations. It can give you a line of defense from financial concerns while you process your loss and prepare for the future.

How much life insurance do you need? Everyone’s situation is different, so consider who would be financially impacted in your absence and what their needs would be. If you’re single with no children, you may only need enough insurance to cover funeral costs and pay off any debts.

If you’re married with children, consider how long it might take your spouse to get back on their feet and be able to support your family, how much childcare and living expenses might be, and how much your children would need to attend college and start a life of their own. A rule of thumb is to purchase 10 times as much life insurance as income you would make in a year. For instance, you would probably buy a $500,000 life insurance policy if you make $50,000 a year. (Note: Be sure to talk with a qualified and licensed life insurance professional before you make any decisions.)

An older person with no kids at home may want to leave behind an inheritance for their children and grandchildren, or ensure that their spouse is cared for in their golden years.

A business owner will need a solid strategy for what would happen to the business in the event of their death, as well as enough life insurance to help ensure that employees are paid and the business can either be transferred or closed with costs covered.

Life insurance may not be anyone’s favorite topic, but it can be a lifeline to your family in the event that you are taken from them too soon. With a well thought out life insurance policy for you and your situation, you can rest knowing that your family’s future has been prepared for.

Ever heard of the “Sandwich Generation”?

Unfortunately, it’s not a group of financially secure, middle-aged foodies whose most important mission is hanging out in the kitchens of their paid-off homes, brainstorming ideas about how to make the perfect sandwich. The Sandwich Generation refers to adults who find themselves in the position of financially supporting their grown children and their own parents, all while trying to save for their futures. They’re “sandwiched” between caring for both the older generation and the younger generation.

Can you relate to this? Do you feel like a PB&J that was forgotten at the bottom of a 2nd grader’s backpack?

If you feel like a sandwich, here are 3 tips to help put a wrap on that:

1. Have a plan. In an airplane, the flight attendants instruct us to put on our own oxygen mask before helping someone else put on theirs – this means before anyone, even your children or your elderly parents. Put your own mask on first. This practice is designed to help keep you and everyone else safe. Imagine if half the plane passed out from lack of oxygen because everyone neglected themselves while trying to help other people. When it comes to potentially having to support your kids and your parents, a tailored financial strategy that includes life insurance and contributing to a retirement fund will help you get your own affairs in order first, so that you can help care for your loved ones next.

2. Increase your income. For that sandwich, does it feel like there’s never enough mayonnaise? You’re always trying to scrape that last little bit from the jar. Increasing your income would help stock your pantry (figuratively, and also literally) with an extra jar or two. Options for a 2nd career are everywhere, and many entrepreneurial opportunities let you set your own hours and pace. Working part-time as your own boss while helping to get out of the proverbial panini press? Go for it!

3. Start dreaming again. You may have been in survival mode for so long that you’ve forgotten you once had dreams. What would you love to do for yourself or your family when you have the time and money? Take that vacation to Europe? Build that addition on to the house? Own that luxury car you’ve always wanted? Maybe you’d like to have enough leftover to help others pursue their goals.

And remember: It’s not too late to start feeling less like baloney and more like a Monte Cristo.

There’s no doubt that credit card debt is a huge financial burden for many Americans.

On average, each household that has revolving credit card debt owes $7,104 (1).It might be tempting to see those numbers and decide to throw out your credit cards entirely.After all, why hang on to a source of temptation when you could make do with cash or a debit card? However, keeping a credit card around has some serious benefits that you should consider before you decide to free yourself from plastic’s grasp.

You might have bigger debts to deal with On average, credit card debt is low compared to auto loans (​$27,934), student loans ($46,679),and mortgages ($192,618) (2). Simply put, you might be dealing with debts that cost you a lot more than your credit card. That leaves you with a few options. You can either start with paying down your biggest debts (a debt avalanche) or get the smaller ones out of the way and move up(a debt snowball). That means you’ll either tackle credit card debt first or wait while you dealwith a mortgage payment or student loans. Figure out where to start and see where your credit card fits in!

Ditching credit cards can lower your credit score Credit utilization and availability play a big role in determining your credit score (3). The less credit you use and the more you have available, the better your score will likely be. Closing down a credit card account may drastically lower the amount of credit you have available, which then could reduce your score. Even freezing your card in a block of ice can have negative effects; credit card companies will sometimes lower your available credit or just close the account if they see inactivity for too long (4). This may not be the end of the world if you have another line of credit (like a mortgage) but it’s typically better for your credit score to keep a credit card around and only use it for smaller purchases.

It’s often wiser to limit credit card usage than to ditch them entirely. Figure out which debts are costing you the most, and focus your efforts on paying them down before you cut up your cards. While you’re at it, try limiting your credit card usage to a few small monthly purchases to protect your credit score and free up some extra funds to work on your other debts.

Need help coming up with a strategy? Give me a call and we can get started on your journey toward financial independence!

What happened to the days of the $10 lawn mowing job or the $7-an-hour babysitting gig every Saturday night?

Not a penny withheld. No taxes to file. No stress about saving a “million dollars” for retirement. As a kid, doing household chores or helping out your friends and neighbors for a little spending money was vastly different from your grown up reality – writing checks for all those bills, paying your taxes, and buying all the things that children seem to need these days, all while trying to save as much as you can for your retirement. When you were a kid, did those concepts feel so far away that they might as well have been camped out on Easter Island?

What happened to the carefree attitude surrounding our finances? It’s simple: we got older. More opportunities. More responsibilities. More choices. As the years go by, finances get more complicated. So knowing where your money is going and whether or not it’s working for you when it gets there is something you need to determine sooner rather than later – even before your source of income switches from mowing lawns and babysitting to your first internship at that marketing firm downtown.

A great way to get a better idea of where your money is going and what it’s doing when it gets there? A financial strategy.

No message in a bottle sent from a more-prepared version of your future self is going to drift your way from Easter Island. A sound strategy for your money is essential, starting as soon as possible is better than waiting, and talking to a financial professional is a solid way to get going.

A teacher walked into her classroom with a clear jar, a bag of rocks, a bucket of sand, and a glass of water.

She placed all the large rocks carefully into the jar. “Who thinks this jar is full?” she asked. Almost half of her students raised their hands. Next, she began to pour sand from the bucket into the jar full of large rocks, emptying the entire bucket into the jar.

“Who thinks this jar is full now?” she asked again. Almost all of her students now had their hands up. To her students’ surprise, she emptied the glass of water into the seemingly full jar of rocks and sand.

“What do you think I’m trying to show you?” She inquired.

One eager student answered: “That things may appear full, but there is always room left to put more stuff in.”

The teacher smiled and shook her head.

“Good try, but the point of this illustration is that if I didn’t put in the large rocks first, I would not be able to fit them in afterwards.”

This concept can be applied to the idea of a constant struggle between priorities that are urgent versus those that are important. When you have limited resources, priorities must be in place since there isn’t enough to go around. Take your money, for example. Unless you have an unlimited amount of funds (we’re still trying to find that source), you can’t have an unlimited amount of important financial goals.

Back to the teacher’s illustration. Let’s say the big rocks are your important goals. Things like buying a home, helping your children pay for college, retirement at 60, etc. They’re all important – but not urgent. These things may happen 10, 20, or 30 years from now.

Urgent things are the sand and water. A monthly payment like your mortgage payment or your monthly utility and internet bills. The urgent things must be paid – and paid on time. If you don’t pay your mortgage on time… Well, you might end up retiring homeless.

Even though these monthly obligations might be in mind more often than your retirement or your toddler’s freshman year in college, if all you focus on are urgent things, then the important goals fall by the wayside. And in some cases, they stay there long after they can realistically be rescued. Saving up for a down payment for a home, funding a college education, or having enough to retire on is nearly impossible to come up with overnight (still looking for that source of unlimited funds!). In most cases, it takes time and discipline to save up and plan well to achieve these important goals.

What are the big rocks in your life? If you’ve never considered them, spend some time thinking about it. When you have a few in mind, place them in the priority queue of your life. Otherwise, if those important goals are ignored for too long, they might become one of the urgent goals – and perhaps ultimately unrealized if they weren’t put in your plan early on.

Some could say “never!” but there might be situations in which using a credit card may be the option you want to go with.

Many families use credit with good intentions – and then life happens – surprise expenses or a change in income leave them struggling to get ahead of growing debt. To be fair, there may be times to use credit and times to avoid using credit.

Purchasing big-ticket items. A big-screen TV or a laptop purchased with a credit card may have additional warranty protection through your credit card company. Features and promotions vary by card, however, so be sure to know the details before you buy. If your credit card offers reward points or airline miles, big-ticket items may be a faster way to earn points than making small purchases over time. Just be sure to have a plan to pay off the balance.

Travel and car rental. For many families, these two items go hand in hand. Credit cards sometimes offer additional insurance protection for your luggage or for the trip itself. Your credit card company may offer some additional protection for car rentals. You might score some extra airline miles or reward points in this category as well because the numbers can add up quickly.

Online shopping. Credit card and debit card numbers are being stolen all the time. Online merchants can have a breach and not even be aware that your credit card info is out in the wild. The advantage of using a credit card as opposed to a debit card is time. You’ll have more time to dispute charges that aren’t yours. If your debit card gets into the wrong hands, someone might be quickly spending your mortgage money, food and gas money, or college tuition for your kids. Credit cards may be a better choice to use online because the effects of fraud don’t have an immediate impact on your bank balance.

Legitimate emergencies. Life happens and sometimes we don’t have enough readily available cash to pay for emergencies. Life’s emergencies can range from broken appliances to broken cars to broken bones and in these cases, you may not have any other viable options for payment.

Using credit isn’t necessarily a bad thing. In fact, if you plan carefully, you may reap several types of benefits from using credit cards and still avoid paying interest. You’ll have to pay off the balance right away to avoid finance charges, though. So, always think twice before you charge once.

Some credit cards offer consumer benefits, like extended warranties, extra insurance, or even rewards. There are some situations in which using a credit card may come in handy.

For many people, when purchasing items with a debit card or credit card, the only difference for them may boil down to simply entering a PIN code or scribbling a signature.

But what really is the difference? The answer may be a little complicated, largely due to misnomers and a blending of terms used by the public. Read on to see what the difference actually is.

A clarification of terms The words credit, debit, and cash seem to be used so loosely by the general public that many people seem confused by what the difference is between them. But in accounting and finance, they have very specific meanings. For our purposes, cash is money that you can spend immediately. It can be cold hard currency of course – bills and coins which you might have in your hand or in your wallet – or cash can refer to the balance in your checking account. This is money that you own, and you can withdraw all of it right now, electronically or physically.

Credit is basically someone’s willingness to accept an IOU from you. Here we will use it as a noun. Buying on credit means the seller trusts the buyer to hand over cash – money which is spendable right now – in the future. Debit, on the other hand, is a verb, and it means to deduct an amount from a cash balance immediately (often a bank account balance). Of course, credit can also be a verb (meaning to add to a cash balance immediately). This mixing of verbs and nouns can make the distinction of the terms in everyday use difficult.

Cash is money you can spend right now, electronically or physically. Credit is an agreement to pay cash later. Debit is a verb that means to subtract cash from a balance right away.

When money is due The major difference between credit and debit cards is the time when cash must be paid. Credit cards, standing in for a promise to pay cash later, allow one to purchase things even if said person has no cash immediately available. For example, if you need to buy some clothes for a new job, you might only have enough cash on hand to purchase one outfit. You may not receive any more cash until you get your first paycheck in two weeks. But you probably wouldn’t want to wear the same outfit every day for two weeks. What can you do?

This is when credit comes in handy: you buy all the outfits you need now, while making a promise to pay the credit card company back in the future. You receive your outfits immediately even though you don’t technically have enough cash yet. You need to complete some work before you receive the money, but the credit card company accepts your IOU in place of cash for the time being.

On the other hand, if you use a debit card to pay for the clothes, the cash will be deducted immediately from your bank account. Remember, the balance of your bank account is cash in financial terms because it is spendable right now. When you enter your PIN code, the bank checks that you have enough money to make the purchase immediately and, if you do, the bank authorizes the transaction. If you need new shoes for your job but don’t have enough money in your bank account, you won’t be able to use a debit card.

Interest rates for using credit cards Why would anyone ever want to use debit if they could use credit? One reason is budgeting and discipline. However, a stronger reason can be interest: promising to pay later may come at a price, and that price is called interest. Credit card companies do not make these short term loans out of the goodness of their hearts. They do it for profit. If you borrow money for a little while – i.e., you take money and promise to pay it back later – you will have to compensate the bank, seller, or credit card company for that ability. Thus we potentially pay interest with credit cards but not with debit cards.

Why don’t we pay interest on debit cards? Well, because the money is already yours, of course.

Depending on where you are in life’s journey, retirement may seem like a distant mirage, or it may be closing in faster than expected.

You might think that deciding when to start preparing for retirement requires complicated algorithms. Yes, there may be some math involved – but the simple answer is – if you haven’t started preparing yet, the time to start is right now!

The 80% rule. Many financial professionals recommend saving enough to provide 80% of your pre-retirement income in your retirement years so you can maintain your standard of living (1). Following this rule isn’t an exact science though, because expense structures for each household can differ greatly. It is, however, a good place to start. How do we get to 80%? Living expenses typically decrease in retirement because costly commutes, investing in business clothing, and eating lunch out 5 days a week are reduced or eliminated. The other big expense that often changes is housing. At retirement, it’s common to trade in your 3, 4, or 5-bedroom home for something smaller, easier, and less expensive to maintain.

Preparing for retirement when you’re young. When you’re younger, preparing for retirement may be a fairly simple process. The main considerations may be life insurance and savings. This can’t be overstated: Now may be time to buy life insurance. If you’re young and healthy, rates are much more likely to be low. This also can’t be overstated: Now may also be a good time to start saving. Every penny you put away now can get you closer to your goal. As anyone who’s older can tell you, life is full of surprises that end up costing money, and these instances have the potential to interfere with your savings strategy.

Longevity considerations. Life expectancy rates are essentially averages, with low and high numbers in the mix. If you’re fortunate enough to beat the average life expectancy, your retirement savings may become slim pickings in your later years, a time when you might not be able to generate supplementary income.

Manage your expenses. Whether you’re young or getting on in years, the time to start saving is now. But if you’re nearing retirement age, it’s also time to take an honest look at your expenses. Part of the trick to stretching retirement savings is to eliminate unnecessary costs. If you’re considering moving to a smaller home to cut costs – and you’re feeling adventurous – you might want to consider moving to a different state with a lower tax rate to enjoy your golden years. If you’re younger, it’s still a great time to assess your budget and eliminate any and all unnecessary spending that you can.

For younger people, time is your ally when it comes to saving for retirement, but waiting to start saving might leave you with less than you’d hoped for later in life. If you’re closer to retirement age, there’s still time to build your nest egg and examine your projected expenses. Talk to your financial professional today about options that may be available for you!