Financial Health
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Maintaining good health and wellness costs money. Just simply living costs money. So it’s fair to say that our health and wellbeing relies on our financial situation. Finances and money are rarely talked about, although I feel like millennials and Gen Z are starting to break the barriers and talk a lot more about wealth and how to gain it without having a wealthy family member or inheritance.
However, there’s still a lot of smoke and mirrors around wealth and how to attain it. I’m still confused by a lot of finance books and get so annoyed when I read a finance book that confuses me more because I feel like I’ve not only wasted my time, but can picture people finally getting the courage to learn about money and getting so turned off by the poorly written and explained media out there that they stop completely.
It’s so important to look your financial situation in the face if you want it to get better. It’s hard to make changes and easy to complain about your situation, and I feel like it’s a trap we all fall into. I was just talking to a financial advisor today and he commended me for starting my own business and funding a retirement account. He said most of his clients are in their 30s and 40s before they realize they need to start asking questions – because it’s out of necessity. They realize they’re on track to retire with nothing or work until they die, and if they don’t do something asap, they’re not going to be able to help their children go to college, buy a house, or afford healthcare beyond their 60s.
It’s such an empowering feeling knowing you’re caring for your future self. Yes, it’s important to live while you’re young, but it’s also an act of self love to care for your elderly self. When I contribute to my ROTH IRA, I see myself getting to visit grandchildren wherever they may end up in the world, and rescuing animals and running a bnb. I also see myself as an elderly person with Crohn’s not having to stress about my healthcare because I pushed through the fear of learning about finances in order to see myself succeed down the road.
The financial advisor and I talked about how so many people get stuck on fear. Running a business isn’t hard. Things can get complicated as you make more money, but it isn’t hard and as you make more money, you can afford to employ others like a financial advisor to help you walk through those growing pains. You have the beautiful ability of supporting others’ dreams while growing your own. How cool is that? Money isn’t something to fear. Setting up the proper accounts isn’t something to fear. Investing isn’t something to fear. They’re tools that can be set up simply and easily to help you reach your goals, and I want to share with you how to get started and maintain financial health wherever you are.
The first excuse a lot of people, including myself, make is thinking we’re too young. You’re literally never too young to start saving or investing. Even if it’s $5 a month. Just start somewhere. My favorite actionable book that got me started is, “I Will Teach You to Be Rich,” by Ramit Sethi. Ramit teaches that “Rich” looks different for everyone. Rich to me can be $30,000 a year and a savings of $10,000. Rich to you can be $250k a year and $1 million in savings. This also changes as you age. And that’s fine!
Start with some basic goals – and here I should mention I’m not a financial advisor and don’t do exactly what I say – it’s why I’m not going to mention specific accounts or numbers or Index Funds. If you want to learn more specifics, I used Alex Elle on Youtube to learn and implement a lot of what I’m currently doing within my own accounts.
My basic goals are retiring my businesses at 60, buying a house in the next 5 years, and opening a bnb in 20 years. These will definitely change over time and that’s ok, but it’s given me a start. I chose a high yield savings account and opened a brokerage account to house my personal checking and investment accounts such as my Roth IRA.
A Roth IRA is a very valuable retirement account. You can put post-tax dollars into this account and not have to pay any additional taxes on the income you make when you retire. The cap for anyone in their 20s, 30s, and 40s is $6,000/year for anyone making less than $129,000 at the time of this recording. If you start investing in a Target Date fund (think the year you’re going to turn 60-65), this is a super simple and easy way to get started. Set up an automation for $500 a month within your checking account to go to your Roth account, and have that automatically invest in your Target Date fund of choice. And voila! This is the quickest and easiest way to set yourself up for success in the future. Depending on your age, you’ll want to invest a little more into a 401k with your job or a business retirement account if you’re self employed, but the simplest way to get started is to open a Roth IRA and invest in your company account, especially if they match up to a certain amount – to me, doing that is a no brainer! Just MAKE SURE to be investing your money. Simply moving your money into the investment account isn’t enough.
Opening a high yield savings account is another super simple step to ensuring your dollar is working for you. Sometimes these accounts limit how much you can transfer out, for example I can only transfer money out of my HYSA 6 times a month, but this is for my emergency fund anyways so once money goes into this account, it doesn’t usually come out anyways. If you’re new to savings, work on building up a 6 month to 1 year buffer in savings before investing in other investment accounts such as a Roth IRA.
Assignment
Your assignment today is to do one thing that scares you when it comes to finances. This might even be acknowledging credit card debt and just looking at all your accounts and taking stock of where you are. Then schedule in a time to create a monthly tracker for yourself. I love a good old fashioned print out one. I write down incoming money and outgoing money and just take note of where my money went that month. Tracking for a month or two can give you a pretty good idea of where it’s going and if you can cut back on anything to save a little more or open that retirement account. Like I said, small consistent contributions are better than none or a lot at once. The market will always rise and fall. If it really scares you, try seeing it as a game or hide those accounts from view – it takes years to start making a liveable income off your investments. Just remember, slow and steady wins the race!
Show Notes
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