Saturday, April 13, 2013

Temporal Foundation

Two months ago I was having a visit with an old friend that I have not seen in a long time. While we were in this catching up conversation, she mentioned that she had a hard time managing their finances. I was wondering how can it be? Her husband works overseas and she said, that he sends her remittances on top of her earnings as a grade school teacher.

I asked her a question only a close friend would ask, and she answered my question as open as she would usually do. How much money does her husband send her? I will not mention how much she disclosed but if you ask me, they are making more than enough for a family of four. It made me wonder even more. How come? She could have saved up a lot from what they were earning but she said after receiving the remittance, money's all gone by the time the next remittance came. 

I thought it would be a great opportunity for me to share with her the importance of financial education. After I told her about it she said, "with my busy schedule, I don't think I have the time to attend lectures like that, like you do." Though it's not my first time to hear that kind of excuse, I felt like a missionary who has just been rejected by trying to share the gospel and nobody wants to hear.

It saddens me that people in general wants to find out how to become financially independent but does not have the time to learn to be one. It also saddens me that people who are close to me including family members and close friends would not want to know the steps of how to build a Strong Financial Foundation.

Earlier today my family went to church on a Saturday session of our churches' general conference. Bishop Dean M Davies spoke about building our lives upon a safe and sure foundation. It was a wonderful talk. He explained and quoted to us the words of the Nephite prophet named Helaman, who taught that we must build the foundation of our lives on a sure foundation even in Jesus the Christ. 

He went on explaining about how our modern temples are built. That these places of worship was given such attention by those who are building them, getting the best of experts, that can do thorough testing of the grounds where these buildings are built. Most temples are anchored strongly to the earth with steel and concrete, making these places of worship sturdy enough to stand the test of time and other calamities that may arise. 

As much as his talk was referring more about our spiritual well being, we can also relate it to our temporal well being. In all honesty we need money to be able to provide for our needs, although we might hear someone say, "I don't need money." We all know it's not true. Even a church building will need a lot of money and funding in order to be built.

What my friend doesn't know is, that there is a way that she can be able to manage her finances. The problem I think is, she doesn't see it's importance... yet, and I bet she would only if she'll take time for it. All it takes is a little planning and lots of execution. That way, we can not only care for our family's spiritual but also their temporal well being, and ours too!

According to experts, people are living a life that we can call a "rat race." This is why no matter how big... or small the money that gets into their pockets they are still financially struggling. Many will wonder where their money went, and when financial calamity comes into their life, they would confess "I was never prepared for this."

Take note though that what I'm about to say next is not a church doctrine, but insights that I learned from financial experts to answer the question, how does one build a strong financial foundation? Here are the six ways to build this financial strategy and here they are:

 Increase cashflow - this means you can get a job, so long as it's a legit paying job.Add an extra job, there's nothing wrong with that. Get the feel of how your family is doing. Are you living from paycheck to paycheck? if so then you are not making a way to increase your cashflow. If you feel that your time will not allow you to get another job, then that's the time to leave below your means, not within. Remember you are trying to increase your cashflow by making sure you still have money in your savings before the next paycheck comes.

Manage Debt - If you have a debt analyze how long it will take you to pay for it. Make a strategy. This doesn't mean you run away from your debtors. Meet with him or her so you can discuss your payment plan. Above this, the most effective way to not worry about debt is to stay out of it.

Create Emergency Fund - Think about this, If you lost your job tomorrow what will happen to you and your family? How about in emergency crisis like sickness, accidents or deaths? How will you fund for that? The ideal amount of an emergency fund is 3-6 months of your monthly income.

Ensure Proper Protection - If you or a family members get sick, disabled or die, do you have an insurance that will take care of it? Take note the most important beneficiary of your insurance is you. There are all kinds of insurance out there. Car insurance, house insurance, business insurance etc... it's OK to get this kinds of insurances but make sure before you do that you are insured too!

Long Term Asset Accumulation - Assets are things that put more money into your pocket. Examples are real properties, stocks, bonds and mutual funds. I'll blog more on this later.

Preserve Your Estate - While living on the earth right now, we teach our kids good values and send them to school to gain discipline and be contributors to the society. We must also aim to leave them tangible legacy that will not only benefit our children but also the generations after them. There is a need to know the legalities of preserving the piece of land that we so worked hard to buy. There is a need to be educated in this area.

There you have it! The six steps to building a solid financial foundation. As a conclusion, I want to clarify that I am not yet rich but these are the things I learned from the men I look up to. People who have already been there and has shared with me this time tested and proven idea. I said "not yet," because I with my family am on my way, we all could try couldn't we?

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