Manage episode 301606189 series 2643051
After reminiscing about how we met and started this podcast, we jump into a live discussion on financial wellness.
What is Financial Wellness? Let’s think about it as we would physical wellness:
- Physical wellness means your body is working efficiently. You can exercise and move easily, and those activities are enjoyable.
- You aren’t chronically sick or get sick often.
- You aren’t in pain, and normal activities don’t cause pain.
- And you can recover from injuries or sickness quicker when those things do happen.
- Having an accountability partner or group will help you through those tough workouts.
- Lastly, physical wellness means living a long, happy life.
Now let’s talk about financial wellness in the same way:
- Your management of financial resources operates efficiently, and you can spend money on the things you need to live a happy life without trouble.
- You aren’t under a mountain of unmanageable debt, and surprise expenses don’t create hardship.
- Losing your job or needing to support a family member doesn’t ruin you financially.
- And when you do lose income or have new expenses, you can rebound quickly and return to your path.
- Having an accountability partner will help you reach your goals.
- Lastly, financial wellbeing has the same goal of living a long, happy life.
So how do you get there? We’ve narrowed this down to 8 bits of advice to achieving financial wellness. And keep in mind that like physical wellness, this is a journey. You don’t run a marathon the first time you try jogging. It takes time.
- Create a goal. Work on it with your partner, parents, or kids. Think of it as a group effort, and work on it with your partner, parents, or kids. What do you want your life to look like? What do you want to be able to do?
- Develop a net worth mindset
- Track your expenses and work hard to reduce them.
- Stop caring so much about what people think. They don’t care, so why should you?
- Learn to manage your money and don’t outsource it until you are confident in your ability to make the right decisions for yourself.
- Have an emergency fund of at least 6 months of living expenses.
- Max out the tools available to you before spending on other stuff, such as 401k, HSA, pay down your mortgage faster, and eliminate your debt.
- Review your progress regularly to help build momentum and pivot when needed.
Top 3 takeaways:
- Financial wellness is very similar to physical wellness in that it’s a constant journey to self-improvement.
- Spend some time getting close to the details of your finances and learn how to manage them effectively.
- You need a powerful goal that keeps you motivated, and accountability partners will help.
- Friends on FIRE episode #27 - Why Tracking Net Worth Matters
- Friends on FIRE episode #15 - Expense Tracking Gone Wild
- Friends on FIRE episode #016 - 401ks are your BFF!
- Friends on FIRE episode #056 - Paying off your mortgage is a great investment
- Friends on FIRE episode #095 - How to stop caring what people think and start living
- Friends on FIRE episode #107 - Why you should reject Dave Ramsey’s Debt Snowball
- Friends on FIRE episode #090 - Why you don’t need a financial plannerMethod, and what to do instead
- Net worth tracking spreadsheet
- Expense tracking spreadsheet
- 2021 Financial Checklist at friends on FIRE etsy store for $3
- 2021 Financial checklist available on friends on FIRE website for free
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Maggie’s Blog: Mostly Minimal Life
Mike’s Book: Your New Relationship with Money