Financial Cairns  

One of my favorite things about hiking or backpacking in the desert is that the trail is only sometimes a  defined path. Rock cairns, like road signs, often represent the adventurer’s route in Southern Utah’s  desert landscape. You must follow these cairns to stay on the path. The word cairn is derived from the  Scottish Gaelic word carn. It means a pile of rocks designed to be a marker. And that is precisely what a  cairn is, a pile of stones designed to indicate the path you must follow to reach your desired destination.  In many cases, while hiking on sandstone or other hard surfaces, the route is only discernable by the  string of cairns laid out strategically to guide the traveler.  

On one occasion, I lead a hike with a group of youth. We were traversing a beautiful section of Capitol  Reef called the Frying Pan Trail. There are many segments on this trail marked with cairns. And as I was  guiding the group, I missed a cairn, and we found ourselves losing the path. After struggling to find the  

trail, we eventually cliffed out. We then had to turn around and retrace our steps to locate where we  had missed the marker. Only after finding the group of cairns were we able to continue. Unfortunately,  that mistake cost us roughly one hour, and we had some stressed youths when we located the trail  again.  

Cairns are like financial principles. Principles are the markers that you should erect that will guide you to  your destination or goal. For example, suppose you desire to reduce your money-related stress at  present. In that case, it’s imperative to adopt sound financial principles that align with your future goals  and practice good behavioral finance. As you focus on these principles or markers, you can be present  and celebrate the completion of each small habit or action. In addition, you will feel the comfort of  progressing and moving in the right direction.  

There are many financial principles that you could use to guide you in your life. I’ve included a list of  some principles you could adopt. When looking at a list, it is easy to become overwhelmed. Keep things  simple; you should pick one to three principles you would like as markers to guide your path to financial  independence. Focus on those “cairns.” Then, when you feel comfortable, return and add another  principle to your trail.  

Below is a list of some of the financial principles and actions that you could consider: 

  • Celebrate your small wins- each time you log a minor financial success, acknowledge it. 
  • Cash Reserve – maintain a 3 to 6-month cash reserve.  
  • Pay off debt -use a debt snowball to pay off debt.  
  • Pay card balances off every month- owning a credit card can be dangerous. Some individuals  should not have one.  
  • Save-create a savings plan.  
  • Savings System-create a system to increase the amount you are saving.  
  • Use a spending plan – I’ve always disliked the word budget; create a plan on how and when you  will spend.  
  • Goals-Based Investing – Practice goals-based investing  
  • Review your Statements- frequently review bank, investment, and card statements. 
  • The 24-hour rule- Take 24 to 48 hours before making a big purchase decision. 
  • Continued Education – Continue to educate yourself financially, and find classes, books, articles,  or podcasts to continue your education.  
  • Regular financial check-ups -do a complete financial check-up quarterly or at least once a year. 
  • Journal- write down what you have learned about your financial mistakes and successes. 
  • Create a vision – How do you see yourself in retirement? What do you want to accomplish? How  do you want to feel? Write your financial vision.  
  • The Buddy System – Surround yourself with others that practice good financial behavior and find  a financial accountability partner.  
  • Financial Audit – review your financial principles, actions, habits, and goals each year, note your  successes and slip-ups, and plan what you would like to focus on during the following year. 
  • Understand your investments – develop an understanding of how you are invested, how you will  be taxed, and how much risk you are taking.  
  • Maintain a comprehensive financial plan – including cash flow planning, risk management,  investment planning, retirement planning, tax planning, and estate planning in your  comprehensive plan.  

 Consult your financial planner- meet with your planner regularly, consult with them about  major financial decisions, and when your goals have changed, ask them questions to help you  understand how your investments relate to your goals and overall plan.  

 Re-balance your portfolio- do a full re-balance at least once a year.  

 Review your financial goals often -Set and review your financial goals.   Don’t put all your eggs in one basket – make sure you reduce your risk by using a proper  allocation.