Quora Answer: What are Three Finance Tips You Believe are Important?

The following is my answer to a Quora question: “What are three finance tips that you believe are very important?” 

There are many tips on finance, but ultimately, it comes down to the basics.  Here are three that form the foundation of good financial management. 

First, have a goal.  Saving for the sake of it is unsustainable to most, and those that do tend towards miserliness.  Have a retirement goal.  Have a savings goal.  Have things you want to work for.  That is motivation. 

Second, have a plan to reach those goals.  This takes into consideration your investment or savings horizon, and other factors that affect earnings or revenue, such as inflation and job loss.  Part of this plan includes loss mitigation, which is why you need insurance.  You need coverage for death, disability, illness, loss of income, accidents and more.  This also includes spreading your risk. 

Finally, avail yourself to excellent financial advice.  Most people are not experts in finance, and even if they do work in finance, they are not experts in every aspect of it.  Financial consultants and bankers should avoid managing their own investments and portfolio.  There is no distance, and emotions tend to get involved.