“Savers are savers whether you have a lot of money or you don’t, and spenders are spenders whether you have a lot of money or you don’t,” he said.
Because finances are a relentless, day-to-day part of our lives, we need to apply our best talents and best efforts, Israelsen said.
“Anything that’s of value requires some consistent effort, and financial health requires consistent effort,” he said. “Just like personal hygiene, our bodies don’t wash themselves. We have to wash them.”
“Our budgets don’t’ naturally happen, we have to plan and carry out our budget,” Israelsen said.
The road to financial health
• Save at least 10 percent of income (or as much as feasible).
• Develop and maintain a record-keeping system for receipts, tax records, medical records, etc.
• Prepare a 12-month estimate of income and expenses, known as an Income and Expenditure Statement.
• Develop and follow a monthly (or weekly) spending plan — a budget. If married, prepare and monitor the family budget as a couple, not separately.
• Carefully monitor usage of debt. Avoid indebtedness whenever possible. Exceptions include housing and education.
• Purchase insurance: life, auto, property, medical, disability and dental, if available. Review all insurance policies annually.
• Work toward home ownership. Develop maintenance skills where possible. Start saving now for a down-payment.
• Start investing now for retirement and other important goals. Even when paying off loans (including student loans), you can begin building an investment portfolio. Invest in 401(k) retirement accounts, especially if your employer matches a portion of your contributions. In addition, consider investing in a Roth Individual Retirement Account (IRA) if your employer does not match your 401(k) contribution.