#FinHealthMatters: Debt Roundup
By: Grayson Bell, Debt Roundup
Did you know 57% of Americans are struggling financially? Isn’t that a crazy number? What if I pull out percentages and go with about 138 million people. Yes that is MILLION! This information is according to Center for Financial Services Innovation’s Consumer Financial Health Study. While I hate to see that number, I used to be a part of that 57% of the American population who struggled with money. Yes, the guy with a personal finance blog KNEW NOTHING ABOUT MONEY!! My financial health sucked big time.
You see, back in 2008, I thought I was riding the wave of awesomeness. I had a good paying job right out of college and then found an even better one that suited my talents. I had new cars, a big starter home, and even a personal watercraft. All of these things which I thought made me extremely happy. Turns out, they were dragging me into the ground. I was drowning in debt. Over $75,000 to be honest. Over $50k of that was just on credit cards. My debt prison was self-imposed. I was so financially stupid.
Why Financial Health is Important
You might be wondering what is financial health? What is it all about? The easiest way to think about it is like your personal health. We workout, eat right, and knew what we put in our bodies is what keeps us going. The healthier we are, the longer we live, less doctor’s visits, less diseases, and the better we feel. It’s not rocket science.
Do you have a lot of debt that you need to consolidate? Have you thought about using a credit card to reduce your rate? This is what I did and saved over $5,000 in interest fees by using balance transfer credit cards. It does work if you plan it right!
The same goes for your money. As with our bodies, we know our money needs to be nurtured. We need to save for emergencies, save for retirement, spend less than we earn, keep our debts low, understand wants and needs, control our credit, get our insurance ducks in a row, etc. All of these aspects make sure we have a well-rounded financial life. Unfortunately, many of us don’t focus on most of these or any.
I knew I needed to save for retirement. Didn’t do it.
I knew I needed to have an emergency fund. Didn’t create one.
I knew I needed to keep my debts low. Definitely didn’t do that.
All of these things I “knew” I should have been doing, yet I only focused on trying to earn more and have fun spending my money. You see, I was focused too much on showing off to my friends, then making sure I was focusing on what truly made me happy. Coincidentally, what really makes me happy is having strong financial health, so I can do what I want when I want.
So, why is financial health so important? Well, I can honestly say I wasn’t the best person to ask back in 2008. Luckily for me, I found the answer once I got out of debt in 2012. I’ve been consumer debt free (minus my mortgage) for four years and they’ve been the best years of my life. When you have all-around solid financial health, you get to make decisions based on your goals, not what’s left in your bank account. That is powerful.
What This Means to Me
My vision for good financial health has changed over the years. This is especially true since I paid off that last credit card in 2012. For the longest time, I thought how much money you had in your bank account was a sign of strong financial health. I’ve realized that was a skewed vision and I’m glad I figured it out.
It’s not about how much money you have sitting in your bank account, it’s how you use it.
It’s how money is not the goal, but a tool to help you get to where you want to go.
It’s how opportunity follows those have a grasp around their finances.
It’s how you can take more risks when you know you’re protected from catastrophe.
The biggest example of strong financial health and what it means to me was when I was able to quit my full-time job back in November of 2015. I worked at that company for 8.5 years. I enjoyed it, but I hit the growth ceiling for my skill set. It was time to do something else.
Luckily for me, I started a blog, grew and audience, connected with some awesome people, and ended up starting a business helping other bloggers with technical issues. I’ve always loved it and still to this day. If I was in poor financial health, I wouldn’t have been able to leave my full-time job to pursue my business. I would’ve had to stay there to make ends meet.
Not anymore! Once I turned my life around, I focused on getting my money life in place. I started funneling money away for retirement, created and fully funded an emergency fund, got all of my insurance ducks in a row, wiped out my debts, and focused on what my money can do for me, not what I had to do for it.
This change in my thinking busted me out of my self-imposed financial shell. It gave me the freedom to take a risk by leaving my job. It allowed me to create a better future for my wife and kids. It allowed me to dream big and work toward those dreams. Best of all, it allowed me to focus on enjoying my hard-earned success and not having to wonder where my next dollar is coming from.
This is what financial health means to me…
PS. I created a little video below to talk a little more about financial health and why I think it’s important (and awesome)!
What does financial health mean to you?
Sound off on social media with the hashtag: #FinHealthMatters
This blog post originally appeared June 29, 2016 on Debt Roundup. It was one of 10 winners of a national #FinHealthMatters Day essay contest created by CFSI. MetLife Foundation is a major sponsor of CFSI’s ongoing consumer financial health work. To learn more about FinHealthMatters from CFSI, sign up here.