By Clay Elliott, CFP®, AWMA®

Have you ever thought of your finances as a puzzle that needs solving? You’re not alone. Although it’s not yet common core, learning valuable financial lessons is an important life skill. At Oak Capital Private Wealth, our services are designed with the goal of helping you meet your short- and long-term financial goals. While our primary objective is to deliver a professionally crafted financial plan, we fully understand the significance of collaborating with financially literate clients. 

I wrote this article to shine a spotlight on 10 valuable financial lessons. Let’s explore them together and strive to uncover your financial potential.

1. Start With the Basics

Building a solid foundation is the first step toward creating a strong financial future. To make wise financial decisions, it’s crucial to have a firm grasp of fundamental ideas like debt management, saving, and budgeting. Many people overlook these essential principles, but mastering them is one of the cornerstones of financial prosperity.

2. Debt Management

Managing debt is essential to experience financial independence. Uncontrolled debt can get out of control quickly, depleting your savings, and making it more difficult to invest for your future. I can’t stress enough how dangerous it is to take on unexpected high-interest debt. Instead, seek to control your debt by creating a budget, setting payment priorities, and investigating repayment options. 

3. Emergency Savings

An emergency fund serves as an essential safety net, shielding you from unforeseen financial setbacks. Emergency expenses like car repair, unexpected medical costs, or job loss can wreak havoc on your finances. Having an emergency fund in place helps you weather these storms without resorting to taking on high-interest debt. 

4. Investing for the Future

When it comes to building wealth, time is your most valuable ally. The power of investing early and consistently is demonstrated in the principle of compound interest, which could enable your money to increase over time by reinvesting your profits to possibly generate even better returns. Compound interest has more time to work when started early, having the potential to transform even small contributions into a sizable nest egg. 

5. Financial Literacy

You can take charge of your financial future by pursuing financial literacy. It’s the basis for all financial decision-making, including managing debt, investing, and creating a budget. Additionally, financial literacy allows you the opportunity to explore financial products and services with confidence, avoid costly errors, and optimize your financial potential. Remember, financial literacy requires ongoing education as new reputable resources emerge.

6. Mindful Spending

Intentionality is a core element of financial freedom. One of the smartest strategies for mindful spending is aligning your outlays with your values and long-term goals. When you can pick and choose which opportunities you invest in, you can pursue long-term financial well-being and true financial independence. 

7. Insurance and Protection

Insurance serves as a shield for your overall financial strategy. It potentially safeguards your financial stability against unanticipated circumstances that can derail your progress. Insurance helps to keep unforeseen expenses from inhibiting your long-term plans and savings objectives by paying for medical costs, property damage, and even income replacement in the event of incapacity or death. 

8. Retirement Planning

Retirement planning means you start planning before you’re close to retirement. It all comes down to being proactive now to possibly secure your financial future once you finish out your working years. Consider utilizing employer-sponsored retirement plans, IRAs, and other retirement vehicles that may help you strive for a comfortable and financially stable golden years.

9. Financial Independence

Reaching financial independence—the desire to live comfortably without depending entirely on a traditional job—can be accomplished with a calculated, multifaceted approach. You can allocate more funds toward the goal of achieving your objectives by cutting back on frivolous spending and tightening your belt. Concurrently, you have the opportunity to increase your income with side gigs, freelance work, or career promotions.  

10. Behavioral Finance

Financial decisions aren’t always rational. Ingrained mental shortcuts and behavioral biases can impair our judgment and lead to expensive errors. Things like risky bets, selling stocks too soon, or hanging on to losing investments for too long are all due to irrational financial behavior.

Complement Your Knowledge With Professional Guidance

The financial lessons summarized above are just the tip of the iceberg. Consult a seasoned financial advisor to help you explore these topics in more detail. 

The Oak Capital Private Wealth team is reliable, responsive, and provides comprehensive financial planning in a family-friendly environment. We believe in educating ourselves and our clients to develop robust wealth management strategies that strive to get you closer to your ideal financial future.

To schedule a meeting, call 225-416-7373 or email [email protected]. 

About Clay

Clay Elliott is Owner and Principal Financial Advisor at Oak Capital Financial Partners, a financial services firm based in Port Allen, LA, dedicated to providing local financial advice held to the highest standards. Since becoming a financial advisor in 2016, Clay prides himself on working toward his clients’ best interests as a fiduciary. He provides comprehensive financial planning and educates his clients to develop robust wealth management strategies to help them pursue their financial goals. He loves helping people become financially independent and enjoys seeing them live out their financial plan successfully.

Clay holds a bachelor’s degree in marketing from Louisiana State University as well as the CERTIFIED FINANCIAL PLANNER™ designation. He is also an Accredited Asset Management Specialist and a Chartered Retirement Planning Counselor.

Outside of work, Clay enjoys spending time with his wife, Claire, and daughter, Camille, playing tennis, fishing, and attending LSU sporting events. An active participant in his community, Clay is involved with The Emerge Foundation Center for Autism, the West Baton Rouge Chamber as an ambassador and member of the Governmental Affairs Committee, is a board member for the Louisiana Chapter of the Financial Planning Association and West Baton Rouge Small Business Council, and a member of Port Allen Rotary Club. He was also named Young Professional of the Year by the West Baton Rouge Chamber of Commerce. To learn more about Clay, connect with him on LinkedIn.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. 

This material is intended to assist in educating you about insurance generally and not to provide personal service. Guarantees are based on the claims paying ability of the issuing company. 

All investing involves risk including loss of principal. No strategy assures success or protects against loss. 

Securities offered through LPL Financial. Member FINRA/SIPC. Investment advisory services offered through NewEdge Advisors, LLC, a registered investment adviser. NewEdge Advisors, LLC and Oak Capital Financial Advisors are separate entities from LPL Financial.