Life is similar to going around the bases on a baseball diamond – a progression. Our financial life is a progression also. We progress through stages of financial life at the same time we move through various life stages, from beginning to end.
Let’s start at the beginning. As you begin your financial life a number of basic steps are prudent and should be considered necessary: Establishing a budget (know what and where you are spending), beginning a program of regular saving (the amount is not as important as the habit), committing to paying off whatever debt you do have (whether school debt or debt taken on as you begin life after school) and avoiding unnecessary debt (e.g. debt for lifestyle).
Think of accomplishing these steps in combination with beginning your working life as getting to first base.
Once on first base, a variety of things can happen that impact your ability to advance to the remaining bases. Some things are in your control and some are not. You are responsible for managing the things in your control. Think of this financial life progression as stewardship rather than ownership. (The fact that anything we think we own will eventually go to someone else will be addressed later.)
Things not in your control still require your awareness and vigilance in order to respond or react appropriately. Otherwise you may have to start over and get back to first base. Things you cannot control include job loss, extended illness or disability. You can exert a measure of control by having adequate health insurance and disability insurance if available and affordable.
Sticking with the plan that got you to first base is essential for moving forward to second base. This involves moving from the financial basics stage to the stage of a more established financial life.