Financial Self-Care: Be Your Own Hero

I’m the type of person who listens to three financial podcasts in a row. I’m also a little obsessed with the FIRE (Financial Independence Retire Early) movement; and I live for a good story about a couple who is a little frugal, a lot fabulous, and used their financial prowess to “beat the system” by becoming debt free, moving to Peru, and spending their days creating whatever they want as they live off of their investments.

Although basic personal finance blogs and literature represent one of my happy places, I wouldn’t necessarily call myself fiscally savvy.  While I can create and work a budget in my sleep with both hands tied behind my back, individual stocks versus ETFs, bonds, and certificates of deposit make my brain hurt a little.  However, I do realize that if I ever want to be one of those people creating my next work of art while sipping tea in Lisbon, I had better understand how to protect my assets and make money in my sleep.

To that end, I’ve declared 2019 the year of getting my financial mind right!  Armed with inspiring stories from Paula Pant’s Afford Anything Podcast, posts from the Reluctant Frugalist’s blog, and the Our Rich Journey couple’s Youtube videos I’ve lurched myself into the murky world of investing. So far, I’ve made two discoveries:

1. It’s actually not so mysterious (again, I’m talking about the basics here), and
2. Learning about ROI (return on investment) and the volatility of the market brings me joy! (because now I see a sliver of light as the door to my new life, where I do what I want from wherever I want, starts to open!!!).

One of the most important lessons I’ve learned is that this financial quest I’ve started is pretty meaningless if I stagnate at the information gathering stage.  So, while I’ve deepened my learning, I’ve also taken significant action steps.  A few of which are:
~Starting in January, 2019, I’ve saved 40% of my net income each month
~I’ve located all of my disparate retirement accounts and consolidated where it makes sense.
~Consulted with a financial advisor and developed a plan (investment and savings) to reach long-term goals.

The purpose of this post is not to try to breakdown the principles of compound interest or offer investment tips (I’d be well out of my depth for that).  Instead, I want to offer a few gems I’ve found that simplify these concepts and have kept me enthused and empowered throughout the process.  I’ve already highlighted three resources above, which I’ll provide links to at the end of this post.

Another great resource I’ve been pondering of late is a book called The Latte Factor by financial expert and New York Times best selling author David Bach.

Bach is best known for making the principles of wealth building accessible to the types of people who wouldn’t typically read a dense, financial text (i.e. 98% of Americans).  My husband and I read Smart Couples Finish Rich together last year, which spurred us to make some important foundational changes to our financial routines.  I must admit that I have yet to read The Latte Factor, but have listened to no fewer than four interviews with Bach on the book’s purpose and his intentions for writing it.   The premise is that you don’t have to be rich to get rich and that small amounts of money can change the trajectory of your life.

 In the book Bach contends that there are three main steps to becoming financially independent; and the earlier in life you get on board with them the better.

1.Pay Yourself First – Bach uses the term “financially selfish”, I prefer to think of it as “financial self-care.”  The point is that too many of us make the fiscally fatal mistake of waiting until we’ve paid all of our bills and if there’s anything left we save it.   Instead, we should be saving the earnings from our first hour of work each day (this comes out to about 12% of our salary) towards our dreams and retirement.  Of course, you need to take care of the necessities – rent, utilities, groceries, etc. ; however, don’t wait until the end of the month after four happy hours, two brunches and a pedicure to proclaim that you have no money left over to put towards your exceptional life.

​2.Make it Automatic – This step is based on Bach’s belief that budgets don’t work. As a person who gleefully balances my checking account every two weeks, I like to interpret this as budgets don’t work for everyone.   However, I totally agree that regularly making that 12% contribution automatically is simpler and more likely to result in consistency than if you were to write that check and send it off each month.  For example, I automatically have funds debited into a separate travel account each week and it has become a game changer for my quality of life. I’m able to take an international vacation each year if I choose, paid for up front and in full!

3. Live Rich Now – I live for this step! It’s one of the foundations on which I created this blog.  Bach believes that one’s quality of life is paramount, and that many of the experiences that make life delicious are completely free – taking a walk in nature, laughing with your favorite people, and having a dance party with your family (or with yourself) on a random Tuesday night.

​Something shifted in me when I started to think of saving my first hour’s earnings as a means of self-care.  I believe that Bach is a master of demystifying saving for retirement and investing.  Another of Bach’s concepts that blew my mind is the idea of not being defined by your past.  He says that “the key is to have your future be bigger than your past.”   In other words, don’t get stuck by allowing your past actions to be your guide for how you move forward in life.  Have VISION! Yes, embrace the present moment and express gratitude for it, but also know that great things and your best days lie ahead.  Saving for this amazing future is an essential part of actualizing it.

“If your soul is stirring you to do something, come up with a plan to help your soul get free.” ~David Bach

https://affordanything.com/ – Afford Anything Podcast and Blog
https://reluctantfrugalist.com/ – The Reluctant Frugalist Blog
https://www.ourrichjourney.com/ – Our Rich Journey

            Janine Rudder is a coach and Co-Owner at Manifestara LLC – https://manifestara.com/​