How to Be A Money Hero to Yourself and Family

by Neal Frankle, CFP ®

Finances are challenging. How you respond to those challenges determine how much of a money hero you become. And there is a lot more at stake than money. Your financial behavior is a model for your family. In the future, they’ll likely take what they see you do and mirror the decisions you make. That’s why it’s very important to take this subject seriously. So dust off your cape and pull out your spandex from the bottom of your drawer. It’s time become a money hero!

Judge Dredd of Debt

If you are in debt the first order of business is to pulverize it. Of course if you need to get out of debt, it won’t happen overnight. But you can start taking important steps immediately to:

Debt is like a shackle around your neck. You just can’t be successful financially if you are in debt. It won’t be easy to solve this problem but who said that being a super-hero was a walk in the park? Take one step at a time and slay this debt dragon as soon as you can.

Captain America of Coverage

Every money hero worth his or her salt knows that if other people rely on them, they have to suit up and show up. That’s what being a hero all is about. You never know when your evil enemies will fire a killer laser beam and put you out of business permanently. That’s why you need to have the right amount of life insurance – and the right kind of insurance coverage – in place.

Superman of Savingsmoney hero

You might be able to fly faster than a speeding bullet now. But someday you’re going to slow down. Are you saving enough money for retirement? Do you have a clear plan in place and are you funding it?

Batman of Budgets

If you ever want to get out of that bat cave you are living in and move up to Wayne Manner, you’re going to have to track your spending. You can use a spreadsheet or a software package. It doesn’t matter what you use as long as you make sure to religiously track your spending.

By recording how you spend money you’ll be able to make sure that your spending is in line with your life priorities. Direct your spending. Don’t react to it. This is the number one way to take back your financial future. You don’t want Robin to turn to you one day yelling “Holy Budget Buster Batman!” do you? I didn’t think so.

Iron Man Investor

Iron man was a Richey Rich tycoon who saved the world with his suit of armor. You don’t have to be a mega-billionaire if you don’t want to. But if you want to help yourself, your family and others, it will be easier to do so with a little green in your pocket book.

If you’re a hero newbie and need an easy way to start investing with limited resources, consider using Betterment. They are a great resource for people who just want to invest a small amount but need guidance.

Once you’ve put your financial house in order by taking the previous steps, your next order of business is to make sure you invest appropriately. There is no “one-size-fits-all” investment plan. You could be a seasoned investor, a beginner or somewhere in between. You still have to make sure your investment strategy is on track.

The key to investment success is to be clear on your investment goals, understand the different investment strategy options and move forward.

What marks the difference between investing heroes and wannabes? The true “Iron Men and Women” in the investment world understand that they need patience in order to achieve real success. This doesn’t necessarily mean you have to hold on to your investments forever. It means that once you decide a certain investment strategy is for you, understand that nothing is perfect and stick to your plan.

There will be periods of time – sometimes long periods – where the way you invest doesn’t work. That is going to happen. The people who build serious wealth through investing understand this and are willing to stick with it. The alternative – jumping around from one investment approach to another – is a sure fire for failure. Money heroes know this and don’t fall for this evil trap.

The Incredibles

If you want to join the ranks of the super money heroes, you’re going to have to build yourself a posse. That’s right. A money hero brings his or her entire family into all the processes mentioned above. The money hero makes sure that everyone in the family is on the team and marching in the right direction.

When you bring your entire family into the process by sharing financial information and explaining why you take the steps you take, you impart your wisdom on them and make sure your super hero legacy continues.

It’s not complicated to become a money hero but it takes work. Get out of debt, save, track your spending, make sure your investment strategy is appropriate and include your family in each step in the process.

If you take these steps there is no Kryptonite strong enough to stop you from being a money hero and reaching your financial and life goals.

Are you a money hero? What other steps would you suggest we take in order to become one?

 

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Carnival of Personal Finance #391

Carnival of Wealth

 

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{ 4 comments… read them below or add one }

Addicted2Debt December 17, 2012 at 9:09 PM

Its so important to be financially responsible its not funny. Thanks for shedding some light on what it takes in terms of discipline and the constant work ethic required to move towards financial indipendence.

Reply

Neal Frankle December 18, 2012 at 5:13 AM

Agreed. I can’t think of any other more important life success ingredient. Thanks for your kind words!

Reply

OC Budget Living Journey December 17, 2012 at 4:01 PM

I need to be more like Judge Dredd; stop digging deeper into debt! Great post!

Reply

Neal Frankle December 18, 2012 at 5:13 AM

OC – so cool you could identify. Do you have any action steps for the coming year on this?

Reply

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