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Financial planning doesn’t often take place on a beach. But the next time you find yourself there, try this experiment, courtesy of management and motivational guru Stephen R. Covey: You’ll need a Mason jar and an assortment of big rocks, smaller gravel, sand, and water.
The big rocks represent the truly important things in your life, such as taking care of your health, raising a family, buying a house, paying for college, saving for retirement, and other major long-term goals. The smaller items represent more immediate wants and activities.
You’re not alone if you’re tempted to fill the jar with small bits of instant gratification. But your well-being will suffer for it. In a recent survey by Guardian Life, 79 percent of working Americans lack confidence about their finances and their future. The 21 percent who do feel they have their big rocks in order have certain characteristics in common. These people:
Create a detailed financial plan
Educate themselves about financial concepts and about a variety of financial products
Live within their means
Offload some stress by engaging a financial partner
Own the right mix of protection and investment products
Both the long-term and the short-term benefits to these behaviors are many. Here are four ways in which rethinking the order in which you fill that jar can affect your life right now.
1. You’ll sleep better.
A new survey from Bankrate shows that more than half (56 percent) of U.S. adults lose sleep at night over at least one financial worry. The top three worries are saving enough for retirement, financing a child’s college education, and paying off debt.
This poll found that as Americans get a handle on these issues, for example, as credit card debt goes down, their loss of sleep diminishes. So, tackling your short-term money worries and focusing on long-term financial planning actually can help you get better shut-eye.
2. You’ll gain discretionary income.
Creating—and implementing—a budget remains the cornerstone of long-term financial planning. Surprisingly, while you might think it would be restrictive, a budget can show you potential areas where you can cut unnecessary expenditures and gain discretionary income.
With a working budget, while you may not be able to afford that beach vacation every year, you can plan in advance for one that won’t negatively affect your current spending or future goals.
You’ll become a smarter consumer.
Keeping your big goals in mind will force you to rethink the latest flat screen with all the bells and whistles, or eating out so frequently. With the online price comparison tools and deal alerts available, there’s no reason why you should pay more for anything you purchase.
Ask yourself if the opportunity cost of splurging now will be worth the financial struggle later. Weigh that high-end TV or sushi buffet against taking out a college loan at a high interest rate.
According to the American Psychological Association’s annual Stress in America survey, Americans are paying for financial stress with their health. Money has consistently topped the list of stressors since the first survey in 2007, with 64 percent of the 2020 respondents feeling stressed about money.
Nearly 1 in 5 respondents said they skipped or considered skipping health care appointments, due to financial concerns. The good news, according to the APA, is that money-related stress can be managed in healthier ways by individuals if they receive emotional support.
So, Put the Big Rocks in First
If you start filling that Mason jar with the smallest items first, you risk running out of room for the big rocks. Instead, by placing the big rocks first, there is room for the smaller items to flow in and around them—in essence accommodating both short-term desires and long-term goals.
When you are careful to focus on the big rocks first, that sunset on the beach won’t mark the end of your financial future, but rather the end of another day in a well-planned life.
For additional assistance with your financial planning contact Missie Berteotti at The Hicks Group, a part of Luttner Financial Group, at mberteotti@luttner.com or 412-398-5030.
Brought to you by The Guardian Network © 2018, 2020. The Guardian Life Insurance Company of America®, New York, NY