Think you missed your window to get your money right? You didn't.
Just starting out is not an age. It is a starting balance. You could be 23 with a first paycheck or 55 starting over after a divorce or a career change. Michael Euston and Jamie Olson counted down the five moves that come first either way, and two rules run through all of them: start where you are, and stay consistent.
5. Budget
Tell your money where to go, or you will wonder where it went.
Without this one, the other four do not have much to work with. The tool matters far less than the habit. Jamie has used Ramsey's EveryDollar app, which makes you manually assign every dollar. Michael uses Copilot, which connects to his accounts and breaks spending down by category. Jamie's husband ran the family budget on pen and paper for years and it worked fine.
Pick whichever one you will actually keep doing. The point is not the app. The point is making conscious decisions about your money instead of finding out after the fact.
4. Build an Emergency Fund
Grandma was right about the rainy day fund.
The rule of thumb in our industry is three to six months of living expenses. Start with your budget, figure out what a month actually costs, and remember to average in the expenses that do not hit monthly, like semiannual insurance premiums.
Which end of the range? If your income is variable or your job stability is not where you want it, lean toward six months. If you are a dual-income household with two stable jobs, three can be reasonable. If a couple disagrees, go with the more conservative number. This is not a line item worth losing sleep over.
Where it sits matters as much as how much. Liquid, FDIC insured, and boring: a checking or savings account that actually pays interest. Do not park it somewhere paying zero, and do not get clever and invest it for growth. Emergencies have a habit of arriving when the economy is weak, which is exactly when you do not want to be selling investments to cover them. This money's job is to be a buffer between you and the unexpected.
3. Wipe Out Consumer Debt
Consumer debt means borrowing to buy things that go down in value.
Michael spent the first five years of his career managing a consumer lending team through auto loans, credit cards, installment loans, and mortgage refinances, right into the teeth of the financial crisis. Debt is an anchor. It limits your ability to take career risk. When something goes wrong, it is the reason you end up tapping investments early.
There is a second cost people miss. Research on payment methods has repeatedly found that people spend meaningfully more when they pay with credit than with cash, in some studies close to double. Set the interest aside and you are still paying a premium for the way you paid.
If you are carrying debt, the snowball method is the one we point people to. List your debts smallest to largest, pay off the smallest first, then roll that payment into the next one. The avalanche method targets the highest interest rate first and looks better on a spreadsheet, but the snowball produces early wins, and the behavioral research says early wins are what keep people going.
Better still: if you are just starting and you do not have a credit card yet, there is a real case for not opening one.
2. Get the Right Insurance
This is the move beginners skip.
Property and casualty first. Auto coverage is required if you drive. Homeowners if you own. Then check whether the coverage amounts are actually right, and whether an umbrella policy makes sense for your situation.
If someone depends on your income, look at term life. Term insurance covers a defined window, often 10 or 20 years, which is the stretch where your assets have not yet grown enough to support your family without you. It fills the gap until they have.
Then disability, which almost nobody thinks about. During your working years you are considerably more likely to become disabled and unable to work than to pass away. Michael carries multiple disability policies, including one structured to buy out his business partner and one to generate monthly income for his spouse.
You can have an excellent investment plan and still get set back by one uncovered event. If you are not sure what you have, ask. Heirloom advisors are fiduciaries, not insurance agents, so a coverage review is just a review.
1. Invest
Investing is not rocket science, and high-quality, low-cost investments are easier to access today than they have ever been.
Automate it. If you have to remember to transfer money every month, there will be months you do not. Payroll deferral into a 401(k) is the most common way to make it automatic.
Capture the full employer match first. That is the place to start. From there, work toward 10 to 15% of your income going into investments every year.
A question that comes up constantly: if you contribute 5% and your employer matches 5%, have you hit the 10%? It is a fine place to start. Better is to get to 10 to 15% of your own income and treat the match as gravy. Using a percentage rather than a fixed dollar amount also means your contributions rise automatically as your income does.
If you are starting at 50 rather than 20, the savings rate has to be higher, because there is less runway for compounding to do the work. That is the tradeoff. It is not complicated. It just has to be a priority.
People also get stuck hunting for the single best investment. You are almost always better off contributing an extra 5% of your paycheck than finding a marginally better fund. An index fund in your 401(k) is a completely reasonable place to begin.
Start Where You Are
Two takeaways. Start wherever you are, at whatever age you are. And be consistent.
At Heirloom, wealth and tax live under one roof, so the plan works both sides of the equation. If you want a second set of eyes on the order you are tackling these in, that is a conversation worth having.
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