I was blessed to be a guest on two different podcasts in the last couple of weeks. When I have the opportunity to do this I really take the time to think about what to talk about in hopes of helping others.
Maintaining a Long-Lasting Healthy Relationship with Money
In my humble opinion there are five main ingredients to having a healthy relationship with money:
- Value-based spending
- Savings goals
Before I go into these five main ingredients, I want to disclose my initial mindset shift. During my recovery, I changed my mind about money. I saw it as God’s money and that I was entrusted with some of it. When I looked at it that way, I realized I wanted to manage it well. I started tithing in response to this mindset shift. Additionally, this is where the conviction to pay off my debt came in. Furthermore, it drove me to want to learn to be an investor.
Maintaining debt freedom is first and foremost. Once you are out of debt, don’t ever carry credit card debt again. Pay those babies off in full and on time each and every month. If you have a 6-month emergency fund, you’ll never need to carry a balance on credit cards again.
Home mortgages, in my opinion, are fine if taken out with the following principles: put 20% down, have as short as a mortgage as possible, and keep your monthly payment at no more than 25% of your take-home pay (hopefully less).
When I was paying off my debt, I made all kinds of sacrifices. Interestingly enough, I discovered I was no less happy. I intentionally thought about what I valued most in life which is relationships. Then I found ways to foster these relationships that didn’t center around spending money. I suggest identifying what you value and then separating it out from spending money. I mean, sure spend money on the things you value (I certainly do!). However, when you identify what you truly value you might be able to enjoy it without spending boatloads of money.
Automation with bill pay is not only going to make your life easier but also assist you in being disciplined. This can be done in a couple of different ways. Firstly, with your bank bill pay system. And secondly, by setting up all credit cards to be paid off in full each and every month. This can be done via your personal login to your credit card companies’ web portal. My BIG advice to using credit cards in a healthy manner is to only charge what you can afford to & pay off in full every month.
My disclaimer here is that I personally stopped using credit cards for a period of my life. I needed to change my habits, pay off debt, and gain a new mindset surrounding credit cards. By going the long, slow slog of paying down my debt, I realized I never again wanted to pay for things of the past.
Don’t sacrifice your savings goals in favor of spending money!! I advise having pre-tax contributions taken out of your gross earnings automatically. This can be set up via your payroll through your employer.
Next, set up any other tax-advantaged savings, like IRAs or Roth IRAs, to automatically come out of your checking account and go into your investment accounts. Finally, set up automation for post-tax savings and investing. Both of these can be done by linking your investment accounts to your bank and choosing your investments ahead of time. Keep in mind when choosing your investments that mutual funds can be purchased through automation but Exchange-Traded Funds (ETFs), cannot. The latter requires a transaction on your behalf.
I’m becoming more of a fan of hitting my savings goals first and budgeting the rest. If you do better with building the budget first and then saving that is fine too. The key here is to be strategic with whichever works best for you. I found that when I was paying off my debt, I budgeted first. I needed to learn discipline through a budget. Now that I’m out of debt, I prefer to set my savings goals first. I’ve narrowed in on what is a realistic savings goal for me through years of budgeting.
Lastly, I cannot say enough about accountability. Join a mastermind, investor forum, or form a group where you can share your goals and strategies. You don’t have to start a blog or do a podcast but it certainly is one way to get accountability.
2 Frugal Dudes Podcast
Maintaining a healthy relationship with money is exactly the theme I spoke on with Kevin and Sean of the 2 Frugal Dudes podcast. When a person recovers from something they gain a certain level of credibility to speak on it. That’s exactly the blessing that’s been bestowed on my life through overcoming addiction and poor money habits.
Today I find great joy in walking alongside and helping others who are gaining freedom from similar things as I.
My interview on the 2 Frugal Dudes podcast, where we unpack what it means to live debt-free and maintain a healthy relationship with money, can be listened to HERE.
The FI Show Podcast
Secondly, I was interviewed by Cody and Justin of the FI Show Podcast. In this podcast episode, we unpacked my story to give hope to many. One can always bounce back and learn to live a life of generosity.
God has saved me from a great many things and now uses my transformative story to bless others. Here is a little snippet of the episode:
If you want to listen to the entire episode you can go HERE.
Money affects everything we do. If we don’t learn to control it, it’s going to control us. For me, I needed to overcome addiction and work on my recovery first and foremost. However, once I reconciled with my past I knew I wanted to gain financial peace. With the same grit it took to overcome addiction, I was able to overcome debt and you can too!!
Once you clear out the debt, you pave the way to begin a long-lasting, healthy relationship with money. Best of all you get to be generous with what you learn and grow ♥.