Financial Wellness

Financial wellness. You've probably heard that term a lot! It's one of the hottest buzzwords. Network Marketers use it to get you to join their programs. Financial consultants use it while offering you their services. Coaches and gurus use it. Even some health professionals use it. EVERYONE wants you to have financial wellness.

But what exactly is "Financial Wellness"? And how do you know when you've got it?
According the Consumer Financial Protection Bureau, you are financially healthy when you have financial security and financial freedom of choice, both in the present and in the future. 

In other words, financial wellness is your ability to manage your money...to be able to afford necessities (food, clothing, shelter, etc), to be able to save (for emergencies or other future expenditures), to invest and grow your money (so you can increase your net worth), and to protect your wealth (from market fluctuations, loss of employment, etc). 
Your financial wellness includes things like your budget, your savings, your credit, and much more.

If any of things aren't where you want them, now is the time to fix them. So your overall financial wellness is a healthy as possible. 

Here's some tips:

1. Stick to your budget. Ah...you thought I was going to say make a budget, didn't you. But the truth is that while plenty of folks have made budgets of some sort, most don't actually stick to them. So once you've created your budget, figure out a plan, some system of accountability, to help you actually stick to it!

2. Build that emergency fund. What do we talk about all the time at Smart About Stuff? Being prepared for emergencies. And one way you make sure you are financially prepared is to have an emergency fund. So when life's hiccups happen, big or small, you can cover them until you get back on your feet.

3. Save for your future. No one wants to work until they die. So start planning and saving for retirement now. There are many vehicles to get you there. Which brings me to my next tip...

4. Consult a financial advisor: Unless you are already a financial expert, you need someone to help you determine what type of financial plan is right for you. It’s best to use an advisor that charges a flat fee for a financial plan, not one that earns commissions by selling the products that you need.

5. If you're credit is good, keep it that way. If it's not, fix it!: You're credit score can do more than get you better interest rates. Many employers now run a credit check before making a job offer. Apartment managers run credit checks when you try to rent a place to live. Insurance companies my run them. In fact, you would be surprised at how many times your credit score has an impact on something other than getting a loan or a credit card. So if it's good, keep it that way. Don't go into unnecessary debt. And if you do borrow money, play it back promptly! 

If you're credit isn't so good, fix it. Usually this means you either have too much debt compared to income, or you are delinquent on paying your bills. Or both. Whichever it is, the best way to fix it is to pay what you owe. There are no magic ways to fix your credit. So get your credit report and review it for errors. If it's accurate and your credit still sucks, contact your creditors and work out payment plans with them. Trust me...most of them will be willing to work with you. 

6. Create multiple income streams: If 2020 proved anything, it was the need for multiple streams of income. So many people lost their jobs. Some did go on to find alternate ways to earn a living. But many were totally reliant on unemployment and the government. What a mess that was! Yes, your emergency fund is there to help cover expenses if you lose your job. But wouldn't it be better and a lot less stressful if you had other sources of income so you always had cash flow coming in?

Anyone can become for "financially fit." It just means learning some basic money management skills. And then putting what you learn into practice. So what are you waiting for? Let's get started. When the next crisis comes along, and it will, you will be much better prepared. I promise, the peace of mind you'll have is worth it!

Want to Save More Money? Make Your Savings Hard To Get At

The first step to financial fitness is savings. Everyone should have a savings account. The problem is that even though many do have one, there never seems to be much money in them. And that's because our savings account is usually the first place we look when we're a little strapped for cash.

If you want to reach your savings goal, you have to keep that money out of easy reach...and no I don't mean a cookie jar on the top shelf. It's for your goals...the things you decided you needed to be prepared for life's foibles. It is  not for those moments when you're temporarily a little short on cash. 

So how do you keep from dipping into the piggy bank?  Here are some ways to make your savings VERY hard to get at:

1. Keep your savings account at a different bank than your primary bank. Having both your primary checking account and your savings account at the same bank makes it too easy to just transfer money from savings if you're a little short on cash. If your debit card is linked to your savings account, that's even worse. Now you can access your savings from almost anywhere! 

I recommend keeping your savings in a totally separate online account. This will definitely cut down on the speed with which you can access your money, which means you might be more likely to look for ways to stretch your dollars until your next payday, instead of pilfering your savings. Plus online banks often pay a higher interest rate on savings than your neighborhood bank. 

If you would prefer to use a brick-and-mortar bank, then open a separate savings account at a bank you don't normally use. Preferably on the other side of town. Do whatever it takes to make taking money out of your account as inconvenient as possible. 

2. Do not link your debit card to your savings account. Again, this just makes it too easy to access your savings. Many banks will give you a card automatically when you open your savings account. They might advertise this as a benefit of setting up an account with them, but it's not. So if you have the option, tell your bank you don't want it. If you already have one, cut it up. If you simply can't imagine not having one, then at least keep it locked up at home and not in your wallet.

3. Reduce the amount of your contributions if necessary. Let's be real. If you are putting a substantial sum into your savings account each month, only to take some of it out again each month, something isn't working. 

It's much better to put a smaller amount in your savings each month and LEAVE IT THERE.

One of the easiest ways to grow your savings is to put money in an interest-bearing savings account and don't touch it.

Have you found yourself dipping into your savings more than you should? How have you stopped? Share your tips in the comments. 

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Know How Much You Need To Save

The first step to making sure you won't be running out of money in an emergency is to know how much you'll actually need. Yes, I know...the typical advice is 3 - 6 months of expenses. But do you know exactly how much you REALLY need?

Don't use guesswork. "I make $4000 a month so that's how much I need." Maybe. It depends on how that $4000 is spent each month. If it all goes to cover essentials, you are correct. If not, you could possibly manage for a bit with less.

You can get started by determining where your money goes each month. This is somewhat like making a budget. Add up all of your income for a month. If you're a dual income family, both paychecks count. Then add alimony, child support, any income from side hustles, investment income...if money comes in to your bank account, add it to your income.

Next take a look at your expenses. Which are absolutely essential? Rent or mortgage payments, food, utilities, obviously. But what else do you absolutely have to pay each month? Car payment? Probably. Insurance and vehicle maintenance costs (this includes fuel in my book). Is anyone in your family on regular medications? They'll need to keep taking them. Childcare? That could depend on the type of emergency. I would always err on the side of caution. Better to have more than you need than not enough.

Anything that does not have to be paid each month...meaning it's something you don't need for survival...is non-essential and can be cut if need be. You can live without cable TV, or your morning Starbucks run. You won't die if you miss a spa day. 

Add up your total monthly ESSENTIAL expenses. Multiply by six. That's how much you need to have saved for emergencies. 

Now...how to do that.

Many experts recommend saving 20% of your monthly income. That's great. If you can do it. But if you are already stretched thin, taking out 20% could be difficult. Start where you can. Something is better than nothing. The important thing is to get started saving now! The sooner you start, the sooner you will have your financial cushion ready for emergencies. If you can only save $5 a week, do it. But do it consistently! Once you figure out how much you can save each month, do it EVERY MONTH! No excuses. A little self-sacrificing now may make all the difference in an actual emergency.

Check out these posts for some additional information on saving money:

Why Did I Buy Those Shoes?!

Set A Savings Goal

The First Step to Saving Money - Spend Less Than You Earn

An Abundance of Money

I used to think that all I need to be financially secure was to make more money. With an abundance of money anything is possible. Unfortunately, this isn't true. How do I know? When you make $97,000 a year and still don't really have any savings, your credit cards are maxed, and you are still living paycheck to paycheck...something is not working.

Obviously I had the "making money" part down. So why was I still struggling? The answer...I still had a poverty mindset. So today's smart money advice isn't going to be about how to make more or save more or invest better. It's about improving your money mindset. Because if you continue to go through life with an attitude of lack, it won't matter how much money you make. You won't be able to keep it.

And you do want to have more money...right? Who wouldn't like to be rich? I'm sure we all want to create wealth and abundance in our lives. If you don't believe me, just ask Google how to make more money and see how many hits you get! There are more than enough website out there wanting you to spend your money so they can show you how to make more. Literally trillions! But none of them teach you how to keep it once you have it. If you learned how to do that you might not purchase their next big thing guaranteed to make you more money!

Most of us get our attitude towards money from our parents. If you read my blog post What My Parents Taught Me About Money, you will understand why I struggled. I was basically taught how to be poor. And it was a lesson I learned very well.

The good news is that you can overcome the lessons you learned. You can basically reprogram your entire belief system around money. It takes time. It takes effort. But it can happen. 

So what do we do to combat our negative programming? Here's some tips:


1. Be aware. That's the first step. Acknowledge that you do it and make a note, mental or otherwise, every time you catch yourself.


2. Identify where the thoughts are coming from. For example, the "people like us weren't meant to be rich" comes straight from my mother and has no basis in fact. There are people in my family that have done quite well. Why can't I?


3. Turn it around. Whenever you catch yourself thinking a negative thought, replace it with the opposite. "Money doesn't grow on trees" becomes "I am prosperous and have more than enough to meet my needs." "People like us weren't meant to be rich" becomes "I am a 6-figure earner." When I catch myself about to make a poor spending decision (like another pair of shoes or a dog!), I remind myself that I am not my mother and I now make smart money decisions.


Our past lessons don't have to become part of who we are. Keep the good stuff. Replace the negative. Positive self talk and affirmations can help you reframe your thinking.


Ready? Repeat after me.


"I am prosperous and have more than enough to meet my needs.
"I am a 6-figure earner."
"I will make more money this month than last."
"I effortlessly attract abundance."
"I am finding new income streams."
"I use money to create a better life."
"I release my money worries."
"I am financially empowered."
"I enjoy making money."
"I will have zero debt."
"I look at my finances without fear."
"I make money while I sleep."
"I am going to make a crap-ton of money today!"
"I am smart when it comes to making important financial decisions."
"I have money making ideas all the time."
"I have wealth in all areas of my life."
"I am worth the money I charge."
"I have multiple streams of passive income."
"I am a rich, powerful woman" (Or man)

The First Step to Saving Money - Spend Less Than You Earn

Preparing for any emergency - whether it be loss of a job, unexpected expenses, illness, or whatever may come your way will require some money. It's just a fact. If you have a financial cushion built up, you will be able to be unemployed longer without worry. You will be able to cover emergency repairs or medical expenses without going into debt. You will be able to purchase the things your family needs to survive and thrive without stress.

The first step to building that cushion sounds easy but often is more difficult than it seems. Spend less than you earn. 

Well that's not hard, you say. But how many of you are actually doing it? Very few, if the truth were known. I make really good money and I still have problems with it sometimes. We all want nice things. And nice things cost money. (And yes...I got a really good deal on the brand new Jeep Gladiator you saw on Facebook so I am still within my budget).

My daughter reminded me the other day that I used to have quite the spending problem. Growing up poor meant I did not have many of the things other kids had. And I vowed my kids would never go without the things they wanted. And what was wrong with buying a few nice things for my husband or my parents? My problem was never buying for myself. But I would spend on others with no thought at all about the expense or if this was a necessary purchase. It wasn't until I discovered a Christmas present from the previous year sitting in my grandson's closet, still unopened, that I realized I was overdoing it. And all that spending soon created huge credit card debt to the point that I found myself unable to pay my bills on time. When I broke my glasses and couldn't afford a new pair because I had maxed out my cards and had no savings, I knew I had to make a change.

Here's how I did it:

1. I am naturally competitive so my first step was to set a goal of how much I would save each week. The challenge of reaching that goal was often enough to keep me from reaching into my wallet. Once I discovered how much fun challenging myself could be, I used it in other ways. How much could I reduce my grocery bill? Could I get a great bargain on any new purchase? Could I find cheaper, better ways to live my life? It became a game. And the prize was an ever increasing amount of money in my bank account.

2. I enlisted my family. The rule was I could not spend anything above a certain dollar amount without discussing it with my family first. Household purchases were discussed with my husband. Purchases for the grandkids were discussed with their parents. For my kids, I talked to their spouses. The discussions were designed to help me understand whether this was a worthwhile purchase. It wasn't based on price. Heck, we bought the grandson his first car. But it was based on NEED and VALUE. Needs were always approved. WANTS were approved if it fit within our budget and provided value. And on the rare occasion I did want to purchase something for myself, I soon developed the habit of walking around the store with the desired item in my cart while I questioned myself as to whether I really needed it. Most times, I would talk myself out of whatever item had caught my eye before I headed to the checkout.

3. Speaking of NEEDS vs WANTS, I learned to differentiate between the two. When my husband saw what I was doing and decided to join me, we took a good look at where "our" money went. And discovered many things we were paying for that we could live without. Cable TV? Gone! Weekly dinners out? Gone! Subscriptions and memberships we didn't use regularly? Gone! Gourmet coffee and "artisan" foods? Gone! And the great thing is - we don't even miss any of this stuff!

4. I learned my triggers. I don't have many vices. But I do have a couple. Books. Music. Jewelry. Shoes. My husband took a pictures of the stacks (yes, plural) of books that hadn't been read, the mountain of CDs that had not yet been opened, and the tangled mess of jewelry I had never worn and presented them to me one day. And how many pairs of shoes does one woman need? So I set rules in place to help me compensate. I can't buy a book until I finish the one I just purchased. I can't buy a CD until I listen to the one I just bought. When I am shopping, I no longer use a cart. It's amazing how fast you will talk yourself out of something once you get tired of carrying it around the store while you shop! If shopping online, once I load everything into my online cart, I leave the website until the next day. Often by then, I will discover I didn't want the items nearly as badly as I thought I did.

5. Here's the big one. I cut up most of my credit cards. I do have a couple that I use for travel or if I just don't have the cash I need on me at the time. I think this was the hardest for me, but it was so beneficial. You can't spend what you don't have! Well, actually with credit, you can. And that's a bad thing. So the rule is if I can't pay cash now or know that I can pay off the credit card debt in 90 days or less, I don't make the purchase.

Spending less than you make is physically quite easy. It's mentally and emotionally hard! Buying things makes us feel good. One of the rules of marketing I learned was that people buy based on emotion and then use logic to justify their purchase. The trick is to find other ways of creating that emotional rush without spending money. Reaching my next savings goal feels gives me warm fuzzies. Knowing I negotiated major savings on a large purchase feels GREAT! Knowing that when we truly need or want something, we can just write the check is priceless.

Try these ideas for yourself. Start saving for the things that are truly important in life and stop wasting money on things that provide no lasting benefit.

If you have some tips on how to spend less than you make, share them here! We can always use some new ideas!

  

Set A Savings Goal

Having trouble saving money? You're not alone. Saving money is often easier said than done. But just like any other area of your life, having a clear goal can help make it a bit easier. And just like any goal you set, it helps to do it right.

How do you set a clear savings goal? Isn't it just like a weight loss goal? You want to lose 50 pounds in 6 months. Goal set! You want to save $500 in 6 months. Done! Right? Maybe...

When setting savings goals, it helps to know what you want the money for. If you merely decide to save $500 in the next 6 months, and then in month 7 you see a great sale on TV's and purchase it, have you accomplished your goal? Theoretically. But now you're right back where you started...unless buying a new TV was your ultimate goal.

Ready to set some SMART savings goals? Here are some tips to help

1. Determine what you are saving for. This will depend on how prepared you are already. Do you have an emergency fund already established? Do you have money saved for retirement? If not, I recommend you start with these. First, 6 months of living expenses as an emergency fund. Then start putting some money aside to invest for your future.

2. Assess your situation. Unlike weight loss or many other goals, savings goals are often dependent on outside factors. If you decide to lose 50 pounds in 6 months, you can most likely achieve that goal if you are willing to do what it takes. But if you decide to save $500 in 6 months while every dollar of your paycheck is being used just to meet basic expenses, that may not be a realistic goal.

This is where you need to take a good look at your spending habits. First, determine your monthly income and include EVERYTHING! Salary, alimony or child support if you receive it, income from a side hustle if it's reliable. You aren't sharing this with the IRS so every penny of income must be included, even if it's "off the books."

Now do the same thing with your expenses. Where does your money go each month? Rent or mortgage payments, food, clothing, car payment, gas, utilities...everything gets included. If you have trouble remembering, check your bank statement. That will give you a pretty good idea of what you spend your money on.

Once you know exactly how much you bring in each month and how much you spend, subtract cash out from cash in.  Is there anything left? That's how much you have to play with.

3. Based on the results from step 2, you have choices. If what you have left over each month is enough to enable you to reach your goal, then good. You're done. Decide where you are going to keep your savings until you need it. Emergency funds should be handled differently than retirement savings for example.

If you don't have enough left over, you still have a choice. You can either modify your savings goal or change your spending habits. Personally, I recommend changing your spending. In order to meet my savings goal, I stopped my cable subscription, my daily Starbucks run, the monthly manicure and other non-necessities. You can do the same. Examine your monthly expenditures for things that are not necessities. Wants rather than needs. Can you give some of them up to meet your goals? It turns out I can get Netflix free with my phone plan. That and a $20 HD antenna and I have all the television I need. Saving Starbucks for an occasional treat has not only helped my put more money in my bank account, it has also helped my take off a few extra pounds. And I have discovered doing my own nails as part of my weekend 'me' time is actually very relaxing.

Did you find a few more dollars to add to your savings goal?

4. Track your savings. Check on your progress from time-to-time to make sure you are on track to meet your goal. And don't stress if you slip up one month. Pick yourself up and get back at it the next month.

5. Reward yourself as you reach milestones along the way. This can help you stay motivated and on track to meeting your new savings goal!

Bartering: Get What You Need Without Cash

No matter what the emergency is - lack of funds because the ex cleaned out your bank account, power outage making ATMs inaccessible, or global economic collapse making cash worthless - there is a skill that can help you acquire what you need without money. It's called bartering.

Bartering is simply the exchange of goods or services for other goods or services without the use of money. So a farmer may trade produce or eggs to a mechanic in exchange for repairs to his vehicle. In more modern times, you might see a wide variety of services exchanged by bartering. For example, I was recently able to barter my grandson's senior pictures in exchange for a few hours of social media marketing coaching.

In order for bartering to be successful, both parties must feel that they have received equal value. So it's important that you actually have something worth bartering.

What kinds of things can be bartered? Personal care services like haircuts, manicures, massages, lawn care, housecleaning. Clothing. Children's clothes and maternity wear are especially popular. Toys. Food items. Crafts. Technology. Professional services such as dental and medical care, bookkeeping, tax preparation, photography, web design, marketing and advertising.

How To Barter

1. This is a good way to get rid of any excess or unneeded supplies or other items you may have. I swapped brand new floor mats for my old Jeep in exchange for some pretty nice camping equipment. I didn't need the mats, since they didn't fit in my new Jeep. And the person who took them didn't go camping anymore. So we both had these basically brand new items that had never even been out of the box. We could have sold them online maybe for less than what we paid for them. Or we could exchange them with someone else for something we needed and wanted. Before you throw anything away, determine if you can exchange it for something you need.

Do you can food? Put up a few extra jars to barter. Bake? Make a few extra loaves of bread or some extra cookies to barter. Plant a few extra rows of vegetables. Whenever you make anything, always make a little extra to barter.

2. Learn some skills. Having a needed skill could be very valuable in an emergency. I recommend a variety of skills so you always have something to offer. In time of financial or medical crisis, technical and business skills could prove profitable. During the zombie apocalypse, skills like hunting, woodworking, and medical knowledge will be highly prized. If you don't have a set of skills to offer, now is the time to develop some.

3. Start now to perfect your negotiating skills and build your network. The Covid-19 pandemic has created a surge in bartering recently. The loss of jobs has forced many people to resort to bartering to survive. And many people are turning to bartering to avoid stores and exposure to the virus.

How Do You Find Someone To Barter With

First, tap into your own personal network. If that doesn't work, there are plenty of online sites devoted to bartering. Too many to list here. Just google "bartering websites" and you'll find them.

Remember, bartering is currently taxable, so you will have to report the fair market value of what you received as income. If we are in the midst of the zombie apocalypse, that will probably be less important.

By the way, I'm always willing to discuss exchanging my social media marketing skills, dried herbs from the garden, homemade jams, or some extra yummies (I'm a pretty good cook). And the hubs is really good with mechanical and electrical stuff. What have you got that we might be interested in?