Beyond Budgeting: Aligning Your Money With the Life You Want

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Shannon Stevens
Managing Director, Downers Grove

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When we first created A Time to Talk, the goal was to create a level of support surrounding the most significant events and decisions our clients face in their lifetimes, and encourage the crucial conversations needed to navigate these life events. 

I have carefully brought into my own life many of these tools, but there’s one that is perhaps the hardest yet….  Watching my two sons graduate college and formally enter the adult world.

It went so fast.  One minute we opened 529 accounts for our baby boys, and the next we watched both walk across the stage and begin adult life.  There is a huge amount of pride making it to this significant milestone.  But I find myself thinking, “Have I told them everything they need to know?  Will they find fulfilling careers?  Will they be able to make it financially?”

I have always stressed basic financial fundamentals with my kids.  Items such as building emergency savings, understanding credit, creating a budget, and living within your means have been talked about early and often.  But, as I now see my boys as men entering adulthood and responsible for their own financial lives, there is so much more to say about living a life that is financially sound and personally fulfilling. 

So, to them, and all the other young graduates, I offer you the following tips on building a life that you want and being financially secure to do so.

• Take care of yourself – Your physical health is one of the most significant drivers of long-term financial outcomes.  Your health can dramatically impact your earnings, your ability to work, and your quality of work.  Add in soaring health care costs and your budget can also be devastated in short order.  Eating and sleeping well, maintaining insurance, staying on top of preventive care (including mental health), and exercising and remaining active will all contribute to your physical and financial health.  

• Spend on yourself and improve your trajectory – Your starting wages may be low (or even non-existent) but focus on growing your income trajectory in the first five to ten years of your career.  Spend strategically on skills, certifications, additional education, or even job relocation to increase your income.  This growth in income will outpace someone saving aggressively on a flat salary.

• Negotiate (within reason)  –   Do not be afraid to ask for an increase in salary, signing bonus, education reimbursement, or titles.  But do your homework and be sure your requests are realistic.  It is easy to think we are worth more than perhaps we are.  Support your requests with facts and show your value.  It’s always ok to advocate for yourself. 

• Watch out for “lifestyle inflation,” but don’t avoid it – As your salary increases, it is easy to want a bigger apartment, fancier clothes, or expensive car.  Keep your fixed costs (rent, car) as low as possible for as long as you can.  But increasing your spending in areas that will improve your career or health can help you both financially and mentally.  A raise is always a good time to increase your 401(k) contributions, too. 

• Don’t be afraid to start a side gig, especially if it is something you enjoy – Even a little side money can build over time.  And who knows?  Your side gig may become bigger than you imagined. 

• Invest in relationships – Relationships are the backbone of our well-being.  And they can also be the backbone of our financial well-being.  Treat your network as a financial asset.  Work to build relationships with people slightly ahead of you, entrepreneurs, and industry switchers.  Building these relationships can create opportunities for change and continue to challenge you.

• Be adaptable and expect some bumps in the road – We all wish life was a smooth ride, but it isn’t.  There will be setbacks, and some may be very difficult and costly (job loss, divorce, illness).  But by facing challenges and learning from mistakes, we build resilience.  Keep moving forward.  The road will eventually clear.

• Ask for help – We can all use some help every once in a while.  Don’t be afraid to ask for help.  And when it comes to your financial life, yes there are apps and social media tips, but being DIY is not always the best solution.  Seek out a wealth advisor and financial planner early.  And should you fall into tough times, all the more important to be open, honest, and ask for help.

• Maintain your estate plan – Everyone 18 and older should have an estate plan.  And once you do, you need to maintain it as life changes and you increase your assets.  Work with a wealth advisor and attorney to ensure that your estate plan is keeping up with all the changes in your life. 

• Remember the basics  – Yes, have the emergency savings, get the employer match in your 401k, be careful with debt, and have a budget.  They are the basics for a reason. 

• Dream big and take some risks (but have a plan) – Life is short.  Do not deny yourself your dreams.  You want to travel the world?  Build a business and be your own boss?  Own a home?  Retire early?  Build a financial plan with a wealth advisor to help you set a path to living your dream.  Seeing your dreams on paper and having a path to get there is rewarding.  And with a plan, chances are improved that you can make your dreams come true.  

Your future financial life goes beyond a budget.  Aligning your financial life with your goals will help you create a deep and meaningful future.