Starting The New Year with a Legacy Wealth Building Budget

In 2021, I would like to encourage you to approach your budget with a different mindset and establish a legacy wealth building budget. A budget isn’t just about ensuring that the bills are paid, it’s about ensuring that you are dedicating your resources in a way that will allow you to thrive financially and build a future that will benefit your children and your children’s children. The things you do TODAY will have a LASTING IMPACT.  I often hear people say that they do not have enough money to save or invest.  I want everyone to understand that it is not how much money you make, but what you do with it that matters most. How you spend your money is a reflection of your priorities. Make yourself and your family a priority TODAY!

A legacy wealth building budget is the most effective and powerful tool you can have to enable your legacy wealth plan. A basic legacy wealth building budget, in addition to paying your monthly bills, have these four elements:

  1. Emergency savings. Did you know that emergency situations are one of the primary things that will throw a family’s finances off track? A recent study showed that about 40% of Americans have no emergency savings whatsoever and 60% have less than $1000 in emergency savings. It is very important to have money set aside to cover unexpected expenses such as a car repair, emergency room visit, travel for a death in the family, or loss of a job. Some experts recommend that you have 3-6 months of living expenses set aside in an emergency fund. While that may seem like a daunting task, I encourage everyone to simply start one, even if it is $25 per month and increase it as you get a handle of your budget. Set up a dedicated savings account now for emergency savings with systematic payments going to it each month. If $25 seems like a stretch, ask yourself, what can you sacrifice to free up $25 or more a month to ensure that your family is prepared for an emergency?
  2. Life insurance/protection. There is one thing that 2020 should have taught us – LIFE IS PRECIOUS AND IMPERMANENT. If you have a spouse or children that are dependent on your income, you owe it to them to have life insurance in place so that if something happens to you, though they will grief the loss of your presence, they will still be able to live the way you intended for them to live.
  3. Invest for the future. Whether it is starting a business, retirement, savings for college, purchasing a new home, etc. It is important to be prepared for tomorrow by investing today.  There are various investment vehicles through which you can invest, it is important to choose one that is right for you: CDs, stocks, bonds, IRAs, mutual funds, real estate, etc. A common myth is that it takes a lot of money to invest. This is simply not true.  Some investments, such as mutual funds, can be set up for as little as $25 per month.
  4. Eliminate debt. Having a plan to eliminate debt is an important element of building wealth. As debt is eliminated, money becomes available that can be applied toward saving and investing goals. The average American maintains about $6,000 in credit card debt. Credit should not be used as an extension of your paycheck to pay for day to day wants, credit must be used wisely. The goal is to be able to pay off necessary credit card charges at the end of each month. If you are not there, consider techniques such a debt stacking, to pay off high interest credit cards first until all credit cards and debt is paid off.

If you need help with creating a legacy wealth budget for your household, please do not hesitate to contact me for help.

Charlie Hasan, OH Charlie 2 LLC: ohcharlie2llc@gmail.com  

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