What Financial Health Means

What Financial Health Means

Back in 2013, my employer from back home had a job opening in the USA, and so I decided to move. I started earning so much more than what I was making back home, but once I got here I found that everything was so expensive. I didn’t know how I could survive with the $500 I had at the time. I had a job, but I didn’t know when I was going to get paid to buy things that I needed. It was a terrible feeling.

That Sense of Entitlement

If you are working and expecting a steady paycheck, it is easy to take things for granted. There are so many things you can spend on: hobbies, dreams to fulfill, stuff. You start working harder, getting paid more, treating yourself more by saying you deserve to enjoy the best things in life!

If you don’t know where you stand financially, you won’t know if or when you can retire, and maybe even end up in debt. You might overspend and won’t even notice because you’re only paying the minimum on your credit card. You could have an emergency and not have anything to use and fall back on. Feeling as if you’re in a hole you can’t get out of, you resign yourself to your fate. Instead of turning your life around for the better, you just don’t do anything, and you end up saying money is impossible.

In less than four years since I first moved to the US, I have managed to save more of my salary and began to invest in low cost index funds, high yield interest earning accounts, even real estate. I learned that I could retire early if I choose to and let my money work for me within the next 10 years!

The things I mentioned are not financial secrets. It’s knowledge available to everyone. We don’t get taught personal finance in school, so we have to learn things through personal experience or by learning from other people’s experiences. But the only person who could help you become more aware of your personal finances is… you.




Getting to Know You

You have to learn what you spend your money on. You have to be more aware of what comes out of that bank account or what goes in that credit card statement. Much like your own health, you have to look at your financial health too. Does it have symptoms of a chronic (overspending) disease? Does it have a chance to turn around and become better with time? Or do you need to revive it before it becomes dead on arrival?

Please don’t believe what people say that you shouldn’t talk, maybe even think, about money. Knowing more about your money and how you control it may give you more purpose: like a good solid number that you may need for retirement, for basic expenses, or for the house you want to buy. Your financial health will be more certain once you get to know your financial habits. Get to know your financial self.

Take it from someone starting from almost nothing just 4 short years ago. I still get surprised with my financial self sometimes, but I think I got to know that side of me pretty well like we’re old friends.

We have conversations in my head about when to retire based on the investment returns we have, if we can afford an indulgence this month, if we earned more through side hustles, and various financial ideas. It feels as if there’s a completely different person inside of me, but it’s still me.

That’s what financial health means to me – knowing a side of me where I can have an honest conversation with money. Knowing that it also opened up doors where my husband and I openly talk about money and where we are right now. We’re comfortable with our financial selves knowing where we are now, where we are going, and how we’re going to get there.

 


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Comments

    1. Post
      Author
      Ruby Escalona

      Yes – by changing your financial habits. No more eating out and self-catering instead, finding cheaper hobbies, paying yourself first (ie when you get a pay raise, you automatically put the extra money you are earning in an interest bearing deposit for emergency funds or investing in Vanguard funds.)

      It’s hard and it kind of sucks sometimes when you want to be disciplined enough to save and find ways to earn more because there are days when you feel like depriving yourself but it’s all part of that journey.

  1. MWM @MyWealthManifesto

    I so very much, wish they would teach basic personal finance in all high schools.
    We learn so much in classes, but somehow the most basic of things are missed. Way too many people get into the world without even a basic grasp of credit or saving. It’s really on us to have to learn it ourselves.

    Sadly a lot of people never do.

    1. Post
      Author
      Ruby Escalona

      That’s so true. We only learned about personal finance after we were working! In my own experience, it was because I got in a bit of credit card debt and I got sick and tired of paying interest to these banks who make millions on fees and interest and only paying us so little! Ugh. Anyway, we learned our lesson but we’re still learning from our mistake along the way (will post about a BoA debacle I had because Chase posted my payment twice on two accounts! Ugh)

  2. Chris

    Thanks for sharing your perspective Ruby & Peter. I think understanding your financial health is very important to start mastering your finances. My biggest issue was not knowing the potential of my money and what I wanted to accomplish with it.

    Due to this, I ended up having $5,500 in credit card + 20k in student loans and car payments. In my younger days, I’d spend my money all on clothes, and items that lost their value. The moment I learned about financial independence my life changed and I managed to pay off all of my credit card debt.

    However, during the process, I was miserable since I would spend 90% or more of my money on making credit card payments with nothing left over for me to enjoy. I’m currently learning more about myself and what items make me feel satisfied. I’m investing my money in assets, working to pay off my debt, and spending it on items that I simply want.

    I wonder if you guys felt the same?

    1. Ruby @ A Journey We Love

      This feeling comes and goes for us. Sometimes we feel sad that we’re not spending on ‘fun’ stuff, but then we sometimes hole up at home and enjoy playing our video games and just hanging out with each other.

      We try to mix it up by doing ‘fun’ stuff like travel and staying put.

      I was like that once upon a time. During pay days (I got paid twice a month), I would buy myself a ‘treat’. If it was traffic and I was wasting time at the mall waiting for it to subside, I would buy food or other things to keep me occupied.

      Man that was a bad idea, but the good news is, we’re both on the right path now.

      Hang in there – I would advise alternating between non-spending weeks and spending weeks. Then you won’t feel as miserable. Frugality is not about being a miser, but spending on things that matter to you and make you happy 🙂

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