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Saving Now Pays Off Later

Published by: Chris Kittrell Date: January 30, 2011

The excitement of a new year full of unlimited opportunities has slowly turned into a near February full of gray snowy skies and the drudgery of another day, another year, more responsibilities, and the continued chase for a better you. Are you still on target with those resolutions? Is this still the year that you’re going to exercise daily, eat healthier, live on a budget and get serious about your family’s financial future, or have circumstances conspired to get you off target to where you were aiming?

I won’t bore you with countless studies and statistics on why we don’t follow through on our New Year’s resolutions, but I will challenge you to use the next eleven months to make a difference in your 2011 investment strategy and your family’s long term financial well-being.

At the beginning of every year I get the same question from clients, family, and friends, “Chris, what do you think the market is going to do this year?” It’s a natural question. It’s fun to speculate, entertaining to discuss at dinner, and a great conversation starter at the water cooler, but my answer sometimes shocks the person asking the question. The truth is, I don’t know what the market is going to do, and SURPRISE, no one else does either!

So let’s start there. When most people think about investment advice, they think in terms of forecasting. However, you don’t have to predict the future in order to save, to invest, and ultimately experience financial independence. We’ve learned all too well over the past decade that we can’t and don’t control the direction of the stock market. What can you control? You can control your spending habits.

Building a budget is great way to ruin a Sunday afternoon and can possibly lead to a “fun” discussion with your spouse. A budget should be the cornerstone of your financial plan. I meet people regularly that tell me they don’t need a budget anymore because of the ‘magic number’ income level they have attained. Living on a budget has nothing to do with how much money you make but is all about making deliberate spending decisions.

The budget is now in place and you’ve ‘named’ every dollar before you spend it. What now? My guess is you will uncover unnecessary spending during the budgeting process. This is where the fun begins. You’ve found money! You now have choices to make with this exciting discovery. We tell our clients there are only so many things you can do with money: pay taxes, pay off debt, spend it, save it, or give it away. How does it feel to have some control over your financial situation? Why is it important to go through this sometimes painful budget process? The earlier you can apply budgeting discipline to your life means the earlier you are in a position to start saving. The earlier you save, then the earlier you have the critical mass for compounding to work its magic and get you towards your retirement goals.

Those dreary days of February will soon give way to another glorious East Tennessee spring. It’s hard to see it right now, but its coming. The same can be said of the financial well-being that’s around the corner if you have the determination and discipline to make and stick to a family budget.

Chris Kittrell is co-founder and a Senior Financial Advisor with Rather & Kittrell.  He is available at