What's most important? Focus on wealth!

I always get asked this question: how do I pay less in taxes?

Why? Because we don't feel like we have a choice in the matter. Choice is everything when it comes to our money. Think right now about 2 things that seriously bother you about your finances - I bet both of them are completely outside of your control. That's the way it is. Worse - we focus on those things instead of the real items that will truly affect our financial situation.

I've created what I'm calling the "Financial Planning Hierarchy of Needs". It's like Maslow, but for your finances. Start at the bottom and work your way up. 

Income: It all starts with income!! The best way to better your financial situation is to make more money (and then control your outflows). 

Emergency Fund: Building a good emergency fund is the best way to weather through tough times. Put your emergency fund into something liquid with a little interest, like a high yield savings account or money market fund.

Savings: It's important to save both inside and outside a retirement account. When I see folks who have the majority of their assets in retirement accounts, this is usually because they are trying to take advantage of the tax deduction and haven't worked on spending enough to also save outside a retirement account. If you find you're only saving in a retirement account, it's probably time either address spending or to talk to a planner!

Insurance and Estate Planning: You need to protect your family and yourself! It's super important to have proper insurance coverage and an estate plan in place. No ifs, ands or buts.

Investments and Taxes: You'll notice tax is near the top. Stop worrying about your taxes all the time. Definitely don't make investment decisions based on taxes alone. Your investments are important but not something you should be worrying about on a day to day basis. Invest according to your risk tolerance and needs and then wait... and wait some more... and then keep waiting. Watch the paint dry!

All other $2 items: STOP! Let it go. Do you want to live your life driving yourself crazy? At some point, you need to decide if these things are truly worth your time and energy.

You've probably noticed there's no budgeting here - why you may ask? Healthy savings implies a level of spending that is sustainable. If you focus on how much you save, then you shouldn't need to worry about the rest. Worry about individual categories when savings is not in a healthy place.