I’ve recently been asked to share a set of financial basics with a group. As a CCOA Volunteer – Ambassador, I was able to use some of their tips and tools. This made me think: What about others? Can’t we all benefit at times with an update or refresher on items and topics that we regularly encounter?

Here are some of the basics. If not you, perhaps they can help others in your family or circle of friends. I have seen many successful people use these tools. Unfortunately, many others who choose to go it alone leave many dollars “on the table” as a result.

Goal Setting: We all know the importance of goals and objectives. My advice: keep it simple. Identify one or two important individual or family goals. They can be both short-term (within a year) and longer-term (less than a year) goals. Get the team’s buy-in and move forward.

Budgeting: No, it’s not a bad word. If approached as a knowledge and planning tool, budgeting can add real benefits to a farm and to a family. Most successful businesses use an annual (or more frequent) budget as part of their planning process. Why? Because it’s a vital tool that allows managers to make sound decisions involving purchases and expenditures. We all know the benefits. Once you’re set up, the process can be easy and, yes, even fun. You can find a simple monthly budget in Excel – type “budget” in the search area at top of worksheet.

Identify Wants vs. Needs: Again, this is a time-tested way to hone in on what’s important. My daughters can tell you they have been asked a hundred times, “Sweetie, is that a want or a need?” Surprisingly, over time, they have adjusted and applied that premise before making purchases – sometimes.

By simply asking the question and, even better, asking a confidant the question on your behalf – often you can gain an unbiased opinion that can help shape your decision. We all have wants – let’s just make sure we take care of our needs first.

Savings: Start early and never stop. A young person starting with $10 a month can begin a habit that will enhance their financial position over time. By starting early, you enjoy the time value of money as well as compounding benefits. If your employer offers a 401K (or similar) plan, use it. This simple savings tool offers multiple benefits including compounding, employer matches, professional management and tax deferred, regular savings.

Regardless of one’s age or the amount you can put aside, a regular savings plan offers a “rainy day” fund as well as peace of mind – benefits we can all enjoy.

Use Professionals: An often-overlooked benefit as it relates to money is the failure to use those around us for help. I talk to my advisor, my CPA and even my Attorney on a regular basis. They are usually available for a quick question or a piece of sage, financial advice. With these professionals, you’ll get unbiased, experience-based counsel. Don’t forget your Banker and CCOA as well.

Finally, use all the resources available to you in your quest for better money management. Of these, the most important is our God-given common sense – “Don’t leave home without it”!

Ken W. Knies is an agricultural and rural consultant. He holds a bachelor’s of science and arts from the University of Arkansas and a master’s of business administration from Webster University in St. Louis, Mo. He formed Ag Strategies, LLC as a business unit focused on quality borrowers and lenders.


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