The financial world is an uncertain place. My parents have never been very good with money. This lead me to have an unhealthy relationship and bad habits with money. My parents had decent jobs, but were always struggling to make ends meet because they lived beyond their means. I know whoa is me, everyone has a sob story but not having good financial role models makes it very hard for kids to know what to do when it comes to earning, saving, and investing their money.
I have asked dozens of kids if they have a basic understanding of how to invest and the answer 9 times out of 10 is usually something like you mean stocks and money stuff. This is a major problem. We are not doing a good job teaching young people the basics so they can make good money choices when they are young and ultimately have the highest potential for good financial health.
Put another way, it took me 35 years to figure it out because I didn’t have good financial role models. I knew I wanted to not worry and struggle with money like my parents did but I had no idea how to do it. It is much easier to create good sustainable financial habits when you are young then it is to try and catch up when you are older. The basics of having an emergency savings account, putting money consistently into a retirement account, living within a budget were all foreign concepts to me for the longest time.
Good financial health starts with those basics whether you are making 30k a year or 300k a year if you do not have the basics down you can’t hope to achieve true financial health. I have seen people who make 50K a year acquire great wealth through a consistent process and I have seen people making a million dollars a year go bankrupt. Good financial health is not something that is solely reserved for the wealthy.
There are a few ways you can get there. You can earn it by making a significant amount of money, but that doesn’t guarantee you success especially if you spend more than you make. You can save like crazy, but that doesn’t guarantee your financial health because you may find that constantly depriving yourself causes you to have a negative relationship with money. You can begin early and develop the right habits and exercise these habits over a long enough period and you will be in excellent financial health. This is usually the smartest approach but it is also the hardest to do. Good financial health like good personal health requires a consistent effort to exercise good choices.
When I talk to people who have a hard time saving I offer this one simple habit builder. For 30 days put a $1 bill in a jar. Do it daily and at the end of the month you will have $30 saved. Now I know that does not sound like much. It’s not supposed to be when you start. For the next 30 days put $2 in the jar daily. Now you will have $90 saved. If you do this consistently you will have an emergency fund or the beginning of an investment account. The reason most people fail to reach their goals around finances is because they start with something too high for them to reach instead of focusing on the small goal.
If you consistently do the little things good financial health is attainable.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.