(NOTE: We will use Fun Financial Fridays as a way to provide insights on how financial and money professionals think about, lecture on and practice financial discipline. These posts will follow Tony Steuer’s Get Ready Formula and we will provide a summary of his weekly recommendations from this 52 week workbook titled The Get Ready Blueprint – A 52 Week Guide to Changing the Way You Think About Money. This is a true workbook with areas to pencil in responses, habit and journaling.)
- In week 1️⃣ you should’ve set your North Star, your mission to financial competency
- In week 2️⃣, You should’ve defined your goals and priorities
Here in week 3️⃣ you should adapt your goals so that you can be prepared for the life stage risks before they arrive and not need to rush to haphazardly be ready. Tony break down the four stages into 4 major categories: STARTING OUT, ACCUMULATION, FINANCIAL INDEPENDENCE, and GOLDEN YEARS.
STARTING OUT – This is stage 1 and happens earlier than we expect. As soon as you earn your first dollar you are on your way (whether you like it or not). At this stage you should be setting goals to:
- Save for stage 2 (financial independence)
- Getting some protection in place, such as insurance, so that an unforeseen accident doesn’t destroy your plans (such as an illness, accident etc)
- Creating a rainy day fund. This is another source of insurance just in case something happens and you need some cash to fall back on.
- Establishing a good credit history (how do you think you can buy that first home without proper credit)
- Paying back your student loans and debts
ACCUMULATION – These are your peak earning years. You should be making goals to:
- Grow your wealth with investments
- Further protecting your income and family with insurance (life insurance enters the scene)
- Saving for your kids (and getting them ready for financial competency)
- Creating an estate plan
- Continue to manage your debts and living within your means
FINANCIAL INDEPENDENCE – At this stage you are no longer dependent on earned income. Your goals should focus on:
- Optimizing your streams of income
- Updating your Investment Policy Statement to reflect that you are less in need of accumulation but in need of distribution
- You may be moving away from employer sponsored health insurance to Medicare, supplements. Long-term care insurance enters the scene as well.
- Continuously updating your will and estate to reflect your mission and desires
GOLDEN YEARS – At this stage you are reaping the rewards of a life well played. Your goals should focus on:
- Estate planning
- Creating healthcare proxies and powers of attorney
- Saving for your grandkids (and getting them ready for financial competency)
Tony provides a workbook where you can write in your goals for the week based on a to-do list Tony illustrates.
Next week (week 4️⃣) we go into Planning for Upcoming Life Events.
About Tony Steuer
I make the complex world of financial services easy to understand so that people feel empowered to take control of their financial lives. A recognized authority on financial preparedness - in case of that disaster you did not expect - I advocate for ethics, integrity and consumer protection within the financial industry.
I make the complex world of financial services easy to understand so that people feel empowered to take control of their financial lives. A recognized authority on financial preparedness - in case of that disaster you did not expect - I advocate for ethics, integrity and consumer protection within the financial industry.
