Unfortunately there’s not a mandatory class or training program each of us is required to take before we are allowed to earn our first dollar. No, we are left to our own devices.

We must get a license to drive a car or get married. We must learn about American and World history, including all the major wars. We even dissect a frog--really?! I’ve yet to dissect a frog since the tenth grade--I just haven’t found the need, nor the desire.

We’re required to learn all this stuff, which is important somehow, but the importance of dissecting a frog, or history for that matter, is not the point. The point is not how important a subject might be, but how many people are personally affected by the subject. Two such subjects that come to mind are relationships and money.

As a retirement advisor I’ll leave the relationship theory to someone more qualified. As for the rules of money, at least there seems to be slightly more logic involved than the rules of relationships.

When it comes to managing money, many times we over-think the simple. We really know what we need to do, we just don’t do it. Perhaps if there was a simple money management chart published by the government, similar to the foods chart we were taught from our childhood, maybe we would make better financial decisions. Of course, we can all see where the foods chart has gotten us--sorry for the digression.

The bottom line is this--as a whole, we need more education on financial and money matters. Until that time comes, here are a few financial categories that seem to have a major impact on our financial health. If we focus on these areas and keep it simple, maybe we could experience a more fruitful financial life.

• Income--Focus on maximizing your value to earn an income. The higher your value to an employer or to your clients and customers, the more you are likely to earn. Value is increased through education and skills.
• Spending--Focus on controlling your spending. The goal is to spend less than you make. This is called living below your means.
• Emergencies--Prepare for emergencies with an emergency fund. Strive to accumulate three to six months worth of expenses and maintain in an easily accessible, low-risk account.
• Debt--Try to avoid debt like the plague. Use it responsibly to buy a house or investment property, but not for items that lose value such as clothes, vacations, and Christmas. With the proper mindset, even vehicles could be purchased without debt.
• Short-term savings--Save for specific items such as vacations, Christmas, repairs, clothes, cars, down payment on a home, auto insurance, medical deductibles, and more.
• Retirement savings--Sock away 10 to 15 percent of your income toward retirement. Utilize company retirement plans, Traditional IRAs, and ROTH IRAs. If 10 to 15 percent is too lofty at first, start with one percent and increase the percentage at least once a year. Saving for retirement will be different for this generation with fewer pension plans and concerns about the viability of Social Security.  

Yes, there are other financial topics we could discuss such as insurance, taxes, investments, and estate planning. However, if we don’t focus on maximizing our income, we probably won’t have a tax problem. If we don’t contribute to retirement plans, why should we care about investments? If we don’t have much to pass on to our heirs, who cares about estate planning?

Coaches teach athletes to focus on the fundamentals. When a basketball player shoots tens of thousands of free throws, the rhythm becomes natural. Similarly, practicing good financial fundamentals creates a rhythm that builds financial security.

Focus on the financial fundamentals--and unless you want to be a forensic reptile coroner, forget about dissecting frogs.

Bil Sadler is a Retirement Advisor in Albany, GA. For more information visit www.sadlerretirement.com

Disclosure: Bil Sadler, CFA, CPA, CFP,Securities offered through H.D. Vest Investment Services, Member SIPC, Advisory services offered through H.D. Vest Advisory Services,2531-C Lafayette Plaza Dr., Albany, GA 31707. The views and opinions presented in this article are those of Bil Sadler and not of H.D. Vest Financial Services or its subsidiaries.