Yoda helped Luke become a Jedi Master, but he can also help you become a Master… of your finances! Here are 7 tips that Yoda has for us to help us on our journey to financial well-being:
1. “You will only find what you bring in.” – Living within your means is one of the first steps to financial wellness. Only spend what is left each month after you’ve paid your monthly bills and made contributions to your retirement and savings accounts. Your monthly income should be the bounds of your spending, not your credit card limit.
2. “You must unlearn what you have learned.” – We all have bad habits, but bad financial habits in particular can have dire consequences. Over-spending, forgetting to pay bills on time, and taking on too much debt are just a few bad habits that can lead to financial stress in the future. Yoda tells us that sometimes we have to change our ways to have a better relationship with our finances and meet our goals.
3. “Difficult to see. Always in motion is the future.” – Yoda knows the importance of being prepared for anything. Unexpected expenses or loss of income can happen at a moment’s notice. Don’t be caught unprepared! Keep an emergency fund in cash of at least 3-6 months’ worth of your fixed expenses. Only touch this fund for true emergencies and replenish the account as soon as possible.
4. “Size Matters Not.” – Regardless of the size of your paycheck, you can save for retirement now. Even small additions to your nest egg can make a big difference in the long run. Try looking for small ways to save some money now and put that towards your long-term goals. Creating a budget, ensuring you aren’t over-paying taxes, and even clipping coupons can be the first steps to building your retirement fund. Every dollar counts!
5. “Always pass on what you have learned.” – Many young adults graduate college or get their first job without knowing how to manage their bank account or use a credit card. Many times, this leads to costly mistakes that affect their lives for years. Just as Yoda taught Luke the ways of the Jedi, teach children and teens about money early on. Help them avoid making big spending mistakes when they begin earning their own living.
6. “Patience you must have, my young padawan” – Humans, especially in this day and age, want instantaneous results. But perhaps you want to pay off student debt, save for a big vacation, or retire at a certain age. These types of financial goals often mean making small contributions over a long period of time. If it seems like you are making slow progress at first, keep going!
7. “Do or do not. There is no try.” – As Luke found out in Episode V, it can be difficult to persevere through tough times and obstacles. But, it’s never too early or too late to commit to taking control of your finances. There is no fast track to financial well-being – it takes time and dedication. Make it a priority and all of your goals will feel within reach.
Yoda has plenty of wisdom to share, but for advice based on your individual circumstances, contact a Hefren-Tillotson financial advisor today.