The best way to live a healthy financial life is to create a budget. Tracking income and expenses and seeing what’s leftover is key to maintaining a great financial life so you never go broke ever again. When your income far exceeds your expenses, the world opens up to you.
It feels amazing to lead a financially healthy life. Money stress is a leading cause of depression among adults. It feels bad to not know whether your family’s future is secure or not. Let alone your own financial future. Early in my career, I worked for an unprofitable division of the company.
Every year was scary because I didn’t know whether it would be my last day or not. Then in 2018, I saw layoffs of my colleagues for the first time ever. It feels so bad when your financial future is insecure. When you work for a profitable company, you don’t feel as worried.
The company is less likely to conduct layoffs when they are profitable. Even if you do work for a profitable company, it’s more important than ever to pad up your savings and live a healthy financial life. You never know when a virus uproots your entire life and turns it upside down.
In a matter of weeks. It took me years of meticulous saving and investing to feel financially secure. I’m convinced anyone can live a secure financial life, especially if they live in a developed world like the United States. There’s no excuse to complain because the blueprint to be a millionaire is available!
The 9 steps below are steps I personally used to get to where I am.
Healthy Financial Life: 9 Ways to Live One
Below are the 9 best ways to lead a healthy financial life. it’s how I got to a net worth of $400k at the age of only 28 years old! It can only grow from here.
1) Create a Budget
A budget that tracks your income and expenses is key to any financial journey. I personally know exactly how much I’m allowed to spend how much I do spend on a monthly, if not daily basis. It’s become a healthy obsession of mine and I really like it.
I personally only try to spend $2k – $2.5k per month. There’s not a lot of things that I need or want. I bought a brand new laptop in November 2022 and a brand new phone in January 2023. That will probably last me until 2027, at a minimum.
I also haven’t bought clothes in the past 5 years. I just never felt the need to. However, if I wanted to, I know I can buy it without any problems because I already accounted for it in my budget. Budgets are freeing in that it shows exactly how much you can spend monthly.
A healthy financial life starts with a budget and seeing how your cash moves in and out of your wallet.
2) Healthy Financial Life? Live Below Your Means
Spending money is not cool. Savers are ridiculed in America because people think saving means being “cheap”. Saving money has nothing to do with being cheap but everything to do with prudent financial decisions. It’s a requirement to live below your means for a healthy financial life.
It’s mathematically impossible to lead a financially healthy life when you spend more than the money you bring in. I personally can afford a $50k lifestyle right now. However, I only spend a $25k lifestyle right now because I want to sacrifice today for a better tomorrow.
Living below your means doesn’t mean living in the cheapest area of town. It means living in an affordable area of town that has a balance between affordability and wants. Spending money does feel good and it makes you feel like you are achieving upward mobility.
However, spending too much money makes you feel like you’re spread too thin. I’ve been there before and it’s not a pretty feeling.
3) Maximize Income
With the invention of the internet, there’s an infinite number of possibilities to raise your income and make more money! There’s no reason why anyone can’t make six figures these days because that’s what weekends are for.
It’s taking me two years to build my side hustles and I estimate it’ll take me one more year to perfect them. However, I’m perfectly content with that because I’m in no hurry. When I do generate cash flow from my side businesses, I know I’ll have made it.
A healthy financial life means doing everything you can to realize your income potential. There’s no reason to sell yourself short. You’ll be surprised what companies are willing to pay for your labor and time. Even with layoff news that dominated the headlines in 2023.
Employees are having an easy time finding opportunities and landing on their feet. Your income is that gets you wealthy. And it has unlimited potential.
4) Minimize Expenses
There are thousands of dollars people waste every year because they buy more stuff as their income increases. They fall victim to lifestyle creep. A healthy financial life means minimizing expenses no matter the income. There are people making $20k/mo yet only spend $1.5k/mo.
I personally even began to lose touch in 2022 and spent more than I needed. But no more. I refuse to spend money on stuff that doesn’t provide me with value. It’s better to ruthlessly cut unnecessary expenses out of the budget and keep spending money on what gives you value and happiness.
Even though I’m making more money than ever before in my life, I’m saving more money than ever before in my life too. I don’t need a lot of things to keep me happy, that’s the good part. A healthy financial life means minimizing expenses to just where you have enough.
There’s no need to buy a new car every two years. The one you have runs just fine. I will drive my car for five more years before I even consider buying another one.
5) Invest Your Money
There’s not a single wealthy person on Earth who doesn’t invest their money. For good reason, too. 9-5 income is great but investment income is even better. A healthy financial life means you should be investing your money. There’s many quality asset classes.
There are even new asset classes popping up so often, as well. Many are utilizing the power of the sharing economy and buying cars and renting them out for additional cash flow. Real assets are dominating and giving returns like we’ve never seen before.
One day, your investment income surpasses your active income and that’s when you reach financial independence. It’s the best feeling in the entire world. In 2023, even putting your money in high yield savings accounts was still a good option.
A risk free 3 – 4% rate? Sign me up! I haven’t seen anything like it, especially when real estate investors try to yield 4.5% on their money.
6) Start Side Hustles
No one thinks they need a side hustle until they get laid off. I’m always using the weekends to scheme. To figure out how to earn more money. Starting businesses are just fun. Not only are they fun and you get to learn a new skill as well, but you diversify your income sources.
My side hustles pay peanuts currently. However, I don’t mind. All I care about is the long term potential. I see a path to profitability for my side hustles. There’s no immediate need to maximize profit right now, and that’s the best part.
A healthy financial life means a diversified income source in case one of them doesn’t pan out. The 2022 – 2023 recession taught us that our employers can let go of us at any second. Without notice and without any severance either.
It’s a necessity to start a side hustle. Especially even more so when you’re single. There’s no excuses. 10 hours a week can potentially change your life.
7) Have an Emergency Fund
People didn’t take emergency funds seriously in the 2020 – 2021 bull run. Then everyone took it seriously in the crash of 2022. A healthy financial life means having a well padded up emergency fund. I personally have a 1-year emergency fund.
And it’s growing! 2022 scared me silly in that I neglected the basics. Credit cards are NOT an emergency fund. Relying on unemployment insurance is also not the way to go. An emergency fund frees you from money stress worries.
Even though it pains me that it’s not earning any returns, having excess cash in case I need it feels great. It felt great even during the bull market of 2016 – 2022 because it gave me the confidence. Even though I wasn’t maximizing my returns.
A healthy financial life means having an emergency fund to pay for medical expenses, job losses, and anything in between.
8) Be Debt Free for a Healthy Financial Life
It was January 2023. My $15k of debt was due in February 2023. I was stressing out from all the way back in December 2022. Almost 3 months of stressing out whether I can meet the debt maturity payment didn’t feel so good. Especially when I had more important things to think about.
My job, my side hustle, and everything else should have taken priority. Nope. My debt repayment was on my mind 24/7. Especially during paycheck days. Paycheck days should be all about you. All of that money should be under your control.
Not if you have debt. When you have debt, the bank owns your paychecks. The bank owns your money. A healthy financial life means being debt free. No one can fully describe how great it feels to never owe anyone else anything.
February 2023 is when I felt happiness because I had no debt on the books. Nothing was holding me back.
9) Never Chase the Hottest Investments
Crypto, NFTs, housing, and the like all came crashing down eventually. Many jumped on the AirBnB trend in 2021/2022 only to see reality by 2023. Travel demand plummeted and people didn’t want to book short term rentals anymore.
There are many AirBnB YouTubers who had their AirBnbs booked out for months only to have demand fall to 0 on some months. The AirBnB game is easy until it isn’t with regulators passing laws banning short term rentals across their city.
The hottest investments become great for a short while. Then they eventually crater. A 100% return in one year is not normal. When returns like that exist, there has to be skepticism. A solid 8 – 10% yearly returns are phenomenal and all anyone needs to be a millionaire.
There’s no need to try for a 50% yearly return rate for a healthy financial life. Many lost everything by chasing the hottest investments.
Healthy Financial Life: the Benefits
The benefits of a healthy financial life is phenomenal. When I was feeling money stress, my life wasn’t the best. I was stressed that I could be let go of at any second and my company wouldn’t give me any severance payments to boot.
Now, I don’t have such worries anymore. If my company lays me off? Then so be it. Either I can take up to 2 years to find another job or I can continue building my side hustles I’ve been building for the past years. The benefits of a healthy financial life is incomparable.
A paycheck day is just another day. There’s no dwelling on price tags because you already accounted for it in the budget. There’s no such thing as, “it’s too expensive” but rather, “I don’t want it”. In 2023, I secured my financial life for the better.
Now, I do not mind of the ups and down of the stock market. I know that I’ll still put food on the table and that my life will be just fine. If I get laid off, I could get another job AND I can afford to take my time finding the right opportunity.
A healthy financial life gives you standing and power. No one can take that away from you. If you don’t like someone? You can just walk away and never talk to them ever again. You are in complete control of your life and that’s what feels amazing about it.
As a result, you can take more risks that bring you more money. It’s how the rich get richer.
Healthy Financial Life is Achievable by Many
It’s certainly not easy. I’m on my *seventh* year of the personal finance journey and it’s been tough work to get here. No matter how great compound interest is, the results don’t start until the 10th year. Even though a healthy financial life is achievable by many, only a few make it.
And I can see why. It feels like such a slog to put in the work day in and day out. Consistency is great but consistently putting in good work is exhausting. There’s been many years I wanted to give up, particularly in years 4 – 5.
A healthy emergency fund, good investment portfolio, and doing good work at the 9-5 will ensure your financial success not just for yourself but for your family as well. Even though days will feel like weeks and months will feel like years, it gets easier.
You don’t have to be the millions who voluntarily chooses to give up the healthy financial life. They would much rather be dependent on their employer rather than independently stand on their own two feet. That doesn’t have to be you.
Everyone can win with money. No matter the income. The income doesn’t matter as much as the discipline. If income mattered, there wouldn’t be a millionaire janitor showing everyone how it’s done. It was difficult for me to save 50%+ of my income every year.
However, I’m so thankful to my younger self for putting in the dues. You will be proud of your results eventually.
Healthy Financial Life: 9 Ways to Live One Shortlist
- Create a budget
- Healthy financial life? Live below your means
- Maximize income
- Minimize expenses
- Invest your money
- Start side hustles
- Have an emergency fund
- Be debt free for a healthy financial life
- Never chase the hottest investments
