Do you have a vision for your financial legacy?

According to a study conducted by Experian.com, it was found that 73% of American consumers were in debt when they died – and that the average debt amount was $62,000.  When you factor in the cost of funeral expenses, the average debt can reach as high as $100,000.  I don’t think this is the kind of financial legacy that any person hopes to leave for their children or grandchildren.

I don’t like being a statistic, and I am sure you don’t either.  So, what can we do to begin building a strong financial foundation for our children and grandchildren?

• Live within your means. This means that we need to develop a budget and stick to it.  Give every dollar you earn a name and a place.  There are a ton of good budgets out there, but I prefer EveryDollar.  It is intuitive, easy to use, and automatically re-sets every month.  If you are married, the budget needs to be something you BOTH decide on, and then you need to have weekly accountability meetings.  For more information on how to do this, see my post on The Family Business.  

• Start an Emergency Fund. Dave Ramsey recommends beginning with $1000 and then building up to a 3-6 month emergency fund.

• Get out of Debt – and stay out.  Aggressively work to pay off your debts.  Whether they be student loans, auto loans, credit card debt – work with a single minded focus to pay off the debt.  Again, Dave Ramsey offers great advice in this area, such as creating a debt snowball.  But the bottom line is – if your car payment is crushing your budget – sell your car and buy a cheaper one – with cash.  Your home mortgage is another story, but understand what you can afford and how to pay it off quicker.

• Earn more Money!  There are many ways to make extra money on the side to use for paying off debt or establishing your emergency fund.  Side jobs such as driving for Uber, delivering pizza, walking dogs, etc are great ways to bring in extra dough.  Clark.com has a great article outlining 28 ways to earn extra cash. 

• Stop trying to keep up with the Jones.  Make a budget, stick to it.  Spend less than you make.  Buy used. Think small and be creative.  Though simple, these truths are a guide that can enable us to realize our financial goals.  Just ask Mr. Money Mustache.

Now, contrast the statistic noted at the beginning of the post with this story:  This past Christmas, myself and each one of my cousins, nine of us in all, received a check for $10,000 from our maternal grandparents.  Think about this – nine grandkids each received a check for $10,000.  My grandparents have three children, each of whom will receive an even greater inheritance as well as the peace of mind knowing that their parents are debt free and have their estate in order.  What a legacy (and an inspiration)!

Leaving a strong financial legacy takes work, planning, and discipline.  However, the joy of leaving a legacy of financial freedom and an inheritance to your children and grandchildren is well worth the effort and is the sign of a life lived intentionally!

How are your financial goals coming along?