Financial planning is a task and topic that can pretty easily make your head spin. There are so many practices, “musts,” and inevitable discomfort and hard decisions. Financial expert and author Erin Botsford helps bring us down out of the confusion cloud of figuring out your finances and breaks things down to the basics. She also shares the one thing she wished someone had told her early on about financial planning.

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What is the #1 thing you wish someone had told you about financial planning back when you started your career? 

Actually, there are two things: from the first paycheck you ever get, and every one thereafter, give the first 10% to God as a tithe and invest the next 10% for your future/retirement. My husband and I actually did this from the time we were twenty-five. When we were young and poor, we often went without. But we stayed focused on the verse from Malachi 3:10: “Bring the whole tithe into the storehouse, that there may be food in my house. Test me in this, says the Lord Almighty and see if I will not throw open the floodgates of heaven and pour out so much blessing that there will not be room enough to store it.” We truly leaned on that word. As to the second 10%, once we invested it, we considered it gone. We never considered touching it until we retired. Now we are retired and it’s almost hard to touch it! But we are. And I can tell you the Lord truly blessed our tithes and our personal discipline. He did throw open the floodgates. The Lord is true to His word.  

In your opinion, what is the biggest (and maybe easiest?) mistake people make when it comes to their finances?  

The biggest mistake people make is not doing what I described in the previous question. If people prioritize the Lord’s work with the first 10% and invest the next 10%, starting by age twenty-five (or at whatever age they are when reading this article), their financial life will work out for them. It’s the easiest thing to do but most people do not have the personal discipline and the willingness to sacrifice the pleasures of today for a secure tomorrow. I’ve never really understood this, but I think it helps that I came from a life of extreme poverty and significant personal challenges. I knew I never wanted to live like that again. I think it’s harder on people who have never experienced lack or loss. They have no context to what bad decisions can lead to.  

As the founder of a highly successful financial planning firm, what are the top three things you would always advise your clients, regardless of their net worth?

1. Stay away from debt, especially credit card debt. The only debt you should have is a home mortgage, a car loan, and perhaps a student loan from college. Too many people rely on credit cards and it is a sure road to disaster. Never carry a credit card balance—never.
2. Invest a minimum of 10% of your GROSS paycheck. On a monthly basis, using the concept of ‘dollar cost averaging,’ invest in mutual funds or ETFs and never consider touching it until you retire. 
3. If you have children, be sure to have sufficient life insurance to replace your income if you or your spouse died. My father died and left my mother with six children and a $10,000 life insurance policy. My father had a PhD in psychology and was super smart, but he never got around to planning. He thought he’d live forever; instead, he died of a massive heart attack at the age of fifty, leaving his wife and children destitute. In reality, not only did I lose my father when I was eleven, I also lost my mother because, after being a ‘stay at home mom,’ she had to return to work to put food on the table. All for a lack of sufficient life insurance. I stress to young couples: do not bring children into this world without a minimum of $1 million of life insurance.  

What is your opinion on tithing or charitable giving and its place in someone’s financial plan?

Well, I’ve already talked about my belief in tithing; I think it’s critical to one’s financial success. We are in a partnership with the Lord. He has already told us what He will do for those who tithe; you can trust Him on His word. I am also a big believer in charitable giving. We have always tried to give above and beyond our tithe. In fact, after I sold my financial planning practice a few years ago, I started a new business, training financial advisors. My purpose in doing this was to give back to the industry that allowed me to become very successful AND to create a revenue stream to support an orphanage we support in Livingston, Zambia, called Ebenezer. We donate 50% of all profits from this new company to this organization

Any final thoughts you’d like to leave readers with?  

Life is short. Be intentional from the minute you get out of college (or even before if you can). Become a goal setter. At a minimum, review and update your goals every quarter. People without written goals flounder. They never go anywhere because they have not determined where it is they want to go. I’ll give you an example. From the time I was about thirty-five, I dreamed about someday having a second home in the mountains. From the moment I wrote down that goal on my goal sheet, I started saving for it. Each month, I set aside a certain amount specifically towards that goal. Every quarter, I re-stated that goal and while it took me until I was 62-years-old to get there, I was able to pay cash for a beautiful six-bedroom home in Park City, Utah. That would have NEVER happened if I hadn’t set the goal, visualized it many, many times, set aside the money, and believed it would happen someday. Written goals are about the most powerful tool in a person’s tool chest.  

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Having spent 31 years as a financial advisor, Erin reached the highest levels in her industry. Erin’s early life, wrought with personal tragedy and misfortune would have never indicated she’d end up at the top of her game. Her personal rags to riches story has been featured in numerous articles and publications, including the cover story of Financial Advisor Magazine, Investment News, Kiplinger Magazine, the Dallas Morning News and The Dallas Business Journal. Her business success has resulted in her appearing numerous times in Barron’s magazine’s Top 100 Women Financial Advisers and Barron’s Top 100 Independent Financial Advisers lists. Her television appearances include being a guest on “Wealth Track with Consuelo Mack,’ CNBC’s “Power Lunch” and “Squawk on the Street.” Erin is the author of two books; recently published Seven Figure Firm: How to Build a Financial Services Business that Grows Itself and best-selling book: The Big Retirement Risk: Running out of Money Before You Run out of Time. 

Today she is the creator of the Elite Advisor Success System™ a system that teaches financial advisors how to quickly grow their businesses. She donates 50% of all profits from this business to Ebenezer Childcare Trust, an orphanage in Livingston, Zambia.