It's the little things

I had to write a short discussion post in response to an article in the Wall Street Journal. I feel so grownup with my WSJ subscription, never mind that it's only for this class and after the semester I'll cancel it and if I feel the urge to read it anytime after that I'll get it from the library, but for the next 2 months I'm a grownup!!

Wow, sorry about that, I get distracted sometimes. Like I was saying we were asked to pick 5 things from this article that resonated with our financial beliefs. Here are my takeaways. I also recommend that you read the article (you know, if you're a grownup and have a subscription), it has some good insights into financial behavior.

1. Keep it simple. History has shown that the most successful people are those that very simply diversify their investments. They don’t try to choose the most flashy and popular things, rather they look for things that have a proven track record. I invest my own portfolio in the same way with a simple mix of mutual funds. This is proving to be profitable.
2. Protect yourself from disaster. Soon after my husband and I were married we began purchasing term life insurance. We did not have any children at the time but we knew that if one of us were to go, it would leave the other with responsibilities that needed to be met. Since that time we have always carried insurance, gradually increasing the amount as we had more children and our other needs changed. Knowing that the other spouse would be able to carry on financially is a comforting feeling.
3. Make the most of what you have. A few years ago we were making very good money but somehow we were still late on payments and always scraping to get by. After a job loss and career change we are not quite back to where we were but we are always early to pay our bills, there is money in the bank for emergencies and we are making serious progress toward paying our debts. The difference is we are intentional with our money and we use it wisely. We know what’s important and it’s not stuff. The money that we have is to be used for the benefit of our family, not for momentary thrills.
4. Teach your children about money. Having 5 children means a lot of demands on my time. The list is always longer than the time I have and if I'm not careful I could spend all my time just dealing with the immediate needs. I need to be intentional about the way that we spend our time. I want my children to grow up to be successful, independent adults that I enjoy spending time with. A key to this is to teach them to be wise with their finances. We pay our children comission for work that they do around our home. They then divide this money into 3 categories; give, save and spend. They are learning that money comes from work and that there is great pride to be found in taking care of your own needs. That’s pretty amazing.
5. Share. This category of my financial plan is very personal and tied to my religious beliefs. I believe that God provides all that I have; health, money, peace, love, everything. In return He has asked that I give back a percentage of my increase. I do this because I believe in a loving God that blesses His children and only wants the best for them. I give because it’s a commandment but I receive so much more in return.

What's your favorite financial principle? Share in the comments, I'd love to know what works for you.