Your home is on fire (God forbid) and you have time to safely grab 5 items (assume all people and animals are safe). What did you grab?
This is not a post about the tragic consequence of anyone’s property actually being on fire but one of personal conflict between what’s practical, valuable and sentimental and planning for ahead. What you would take from your burning house reflects your interests, background and priorities. Think of it as an interview about your life, condensed into one question: What would you save?
Maybe you’re now pondering this question: “What would I take from my burning house?” Would you go the practical route and snatch your computer or phone, or are you more sentimental, opting for old photos and toys? It’s a tough one.
Sometimes it takes a moment of crisis to realize what matters. Sometimes it takes a really difficult question to force you to think about what you value in life. A plan is critical even if it’s formulated over the course of a minute.
So you’ve got your 5 items together but what about the rest of the contents when it does burn to the ground? Oh well that’s easy right, insurance takes care of that. Sure it does, but what exactly was in there and what was everything valued at? Here’s a quick tip that you can do next time you have a spare hours, or when there’s nothing on TV: Create a mini movie, room-by-room, the playback being very valuable when making an insurance claim. Walk through each room and record your stuff. Be sure to shoot serial numbers and add commentary by reading out model numbers. Save it onto a hard drive or flash-drive, collect important receipts and documents and store it all together in a quick-to-go place.
So now you’ve got a plan for when your house burns down. What about a plan for the inevitable: Life? Yep you need a plan to be financially secure when you grow old – and anywhere in between. You need a financial plan. Again, you need to spend a bit of time putting it together, collecting your important financial information and then starting a budget so you know what’s coming in and what’s going out, money-wise. It’s not that hard. You can start here by downloading our Free Your Money Sense e-Book: “6-steps to Financial Security”.
So back to the burning house. We’ll assume the cat and dog were ok: What 5 things did you grab?
Each day you get up and shower, get dressed, have breakfast, feed the pets and go to work: or something like that. That’s normal for you but it doesn’t mean it’s normal for the next person.
Did you know that when it comes to your money, there is a normal too? Your money normal encompasses your ability to pay your bills, educate your kids, buy a home or retire in comfort and security. That will change for everyone.
So how do you define your money-normal, as it can impact your life in huge ways?
Some people believe that you save regularly and stay out of debt. Others believe that the future is unknowable, so why worry about it. We ultimately define our actions based on our habits and what we believe is appropriate or in our best interest.
Meet Chandler who is a frugal spender, a good saver and even manages to invest here and there. He is happy with that lifestyle and always manages to have money available to do what he wants to do, when he wants to do it. He is organized, disciplined, a planner and a saver.
On the flip side Joey likes to spend as required, he likes to do and have what he wants and needs without consideration of next months finances, and as a result lives from day to day, not interested in, or maybe not knowledgeable of what he requires to save for the future. He thinks it will be there when it’s needed; somehow. (Of course there are many variations of those two examples.)
Both of these fictional people believe that their approach is normal. And it is because they live it. But the consequences can be very different. It’s not a matter of who is wrong or right – it’s simply, their normal.
You need to understand your normal, does it bring you closer to your happiness, satisfaction, comfort and a secure financial future? If so, keep it going. If not, perhaps it’s time for a new normal…
A good start to being money-normal is to get a plan in place. Start by downloading our Free Your Money Sense e-Book: “6-steps to Financial Security”.
If you don’t know where you are it’s often hard to know where you are going. Establish a budget; then revise and review. Your budget is a living document, it keeps changing so you need to keep assessing and adapting to these changes. Put some realistic goals in place and try to stick to them. You’ll benefit in the long run. www.YourWealthVault.com.au