Is financial wellness attainable? Is it attainable for you?
Yes, to both.
Not only that, but it may be closer than you realize.
While I have no idea what you’ve got going on in your financial life, I’ve been in a place where I felt like I was financially trapped. I was broke, living paycheck-to-paycheck, stuck in credit card debt, feeling like I’d never get out.
But I did.
I’m going to share how I broke free and how you can, too. I’m going to show you how you can get on the path to financial wellness.
Briefly, so you know where I’m coming from, I’ve been a financial advisor for 20+ years. I’m honored to be named to Investopedia’s list of the top 100 financial advisors in the country many years running.
Here’s what we’ll cover:
- What is financial wellness
- What’s keeping you stuck?
- The four keys to finding financial wellness
Let’s get started.
What is financial wellness?
Wellness is the process of moving from mere survival to thriving. It’s putting healthy habits in place in order to position yourself for better physical and mental health. The same is true for financial wellness.
It’s easy to get stuck in negative patterns and cycles. Inertia keeps us doing what we’ve always done. When we do that, we keep getting what we’ve always gotten. In order to break free of negative patterns and habits, we need to first identify them. Once we’ve done what, we can work to replace them with new and positive habits.
When we put those habits into practice on a daily basis, that’s when we get on the path to financial wellness.
What’s keeping you stuck?
The following seven steps can help you get clear on your problem and determine if you’re truly ready to make changes. And that’s the most important question: Are you ready to make the changes necessary to solve your problems?
If you’re not, not even the best process or advice can help you. If you are, I’m confident I can help you get where you want to go.
Please take your time in going through these seven questions.
Identifying the problem
What are you currently struggling with financially?
Past attempts at improvement
Have you done anything to solve the problem(s)?
What specific actions were taken
Be as specific as possible.
Time period
How long have you been aware of, and working to solve the problem?
Effective interventions
Has anything worked?
Total impact
How much has the problem(s) cost you (time, attention, energy)?
Frustration level
How frustrated are you right now?
The four simple steps to finding financial wellness
There’s a lot of conflicting information regarding habits out there. Research suggests it takes 66 days for a new behavior to become automatic. With that in mind, expect any changes you’re making to take at least two months before they become second nature.
That being said, some of the four steps I’m going to talk about may happen faster, and some may take longer. What I know for sure is that financial wellness is worth committing to. Not only will you be in a better financial situation, but you’ll also have peace of mind.
Step 1: Pay yourself first
The golden rule of personal finance is pay yourself first. The opposite of that is “pay everyone else first” and odds are, that’s what you’re doing. That’s what I did for years.
When you do that, you often run up against the phenomenon of having more month than money. Meaning you get three quarters of the way through the month, and you’re broke. There aren’t too many worse feelings than running out of money. The solution to this is making the commitment to paying yourself first.
That means you put automatic contributions to yourself in place. You can do this with your 401(k) at work by enrolling and beginning to make contributions. Starting with 1% is a fine place to start.
If you don’t have a 401(k), you can open an IRA and set up automatic contributions from your checking account around the first of every month. Companies like M1 Finance are a great and low-cost option.
If you’re working to get your emergency fund set up, you can create an automatic transfer towards the first of the month between your every day checking account and your savings account.
The bottom line is this: you need to break your current habit of paying everyone else first, and start paying yourself first. Again, even 1% of your salary is a good start.
At no point have I, nor will I say any of this is easy. But it is simple.
Step 2: Get out of debt
Debt crushed me for a long time. It caused me constant stress and anxiety. I’ve got terrible memories of trying to maneuver and figure out how to make my minimum monthly payments. If you’re in credit card debt, you need to do whatever you can to get out of it.
The first step is to set your intention. Take out a piece of paper and write, “I will be debt-free” at the top. Next, write down all your balances, interest rates, minimum monthly payments, and companies. From there, go to your budget and look for things you can cut out in order to free up additional funds to pay off your balances.
In service of helping you do this, you can access our Get Out of Debt course for free.
I’m excited for the day that you make your final payment to be free from your credit card debt.
Step 3: Diversify
When it comes to investing, take a diversified approach. Way too many people are losing way too much money investing in individual stocks and crypto assets. I’ve got plenty of personal experience in this area as well.
In order to be a successful investor, you need to first determine your risk tolerance. From there, you can figure out your asset allocation (proper mix of investments), and then make the appropriate decisions about what you should be investing in.
My recommendation is to invest the vast majority 90 to 95% in low-cost, well-diversified mutual funds or ETFs. Once you’re on track to meet your financial goals and priorities, then you can start investing in more aggressive, concentrated investments.
Until that day, stop investing in individual stocks or crypto.
Step 4: Become the CEO of your financial life
This is a simple, yet profound step.
Make the decision to become the CEO of your financial life. There’s never going to be anyone with a greater stake in your finances than you. Because of that, you need to start acting accordingly.
That means taking an interest in your money. Learn about the investments inside your 401(k). Review your cash flow and budget on a monthly basis. Have a standing monthly money meeting with your significant other to ensure you’re on the same page with money.
Now, this doesn’t mean you need to do everything with your finances. You can still outsource some of it if you decide to hire an accountant or financial advisor. But you still need to be the one making the final decisions.
Closing
Financial success and wellness is available to you. It may not be easy, but much of personal finance is simple.
Set your intention and get to work. Let us know how we can help you on your journey.
If you’re ready to take control of your financial life, check out our DIY Financial Plan course.
We’ve got three free courses as well: Our Goals Course, Values Course, and our Get Out of Debt course.
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