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A Wiser Retirement®
260. 10 Financial Habits That Lead to Long-Term Success
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In this episode of A Wiser Retirement® Podcast, we discuss 10 financial habits to help you take control of your finances, from setting a clear vision and building a budget to avoiding debt and maximizing employer benefits. Learn practical strategies to automate your savings, build an emergency fund, and align your spending with your long-term goals. Whether you're just starting out or looking to fine-tune your financial habits, this episode has actionable advice to help you stay on track.
Related Podcast Episodes:
- Ep 238: Is Instant Gratification Ruining Your Financial Goals?
- Ep 221: How to Prioritize Financial Goals
- Ep 200: Setting and Achieving Financial Goals in the New Year
Related YouTube Videos:
- Tips for Sticking to Your Financial Goals
- 6 Habits of Financially Successful People
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Establishing Financial Habits for Long-Term Success
Speaker 1If your employer match is 6%, then try and contribute 6% of your paycheck to that to at least get that full benefit. And then if you can exceed that and get to the max each year, then of course to do that. But for the most part prioritize definitely getting that match from the employer.
Speaker 3Welcome to Wise Retirement Podcast. Have you struggled to create financial habits that lead to long-term success? I'm Casey Smith. Today I'm joined with Michaela Dowdy superstar Michaela Dowdy. Each week, we bring you practical advice on retirement, investing and planning for your financial future. Let's get started.
Speaker 1Hello.
Speaker 3How are you today?
Speaker 1I'm great.
Speaker 3Over the Christmas spirit now Are we into New Year's spirit now.
Speaker 1I think we're into New Year's spirit, but you know I feel like getting off the holidays is always like a little bit of like a holiday hangover, you know, just like all the emotions and all the family time and everything.
Speaker 3Right, very true. So, but this is the time of year that when people go I'm tired of whatever Usually it has to do with our weight and figure and all that stuff and they start setting goals, and so each year, we like doing little podcasts on how do you set goals. So there's lots of history of those. So I thought we'd start this new year podcast not quite the new year, but close enough with talking about 10 financial habits that can lead us to long-term success. And I'll say that, um, it does take habits to lead to success, for sure, but I will also say that success is very hard to measure when you're looking for at someone from the outside definitely because just because you can make the payments doesn't mean that you're necessarily successful yes, yes exactly.
Speaker 3I've told my kids about that all the time. There's, there's rich people, and then there's wealthy people. The wealthy people you won't know it. And the rich people. If they lost a paycheck for six months or whatever, they'd be in a lot of trouble. Yes, yes, so you have to kind of take it all with a grain of salt.
Speaker 3So definitely you have done the research for this and I'll let you get started. So once you give us uh, I guess we should have done it 10 to one, but I don't know if they're in any particular order necessarily. Uh, so we'll just start with with a line item one.
Speaker 1So, first things first, and this kind of leads into our discussion of, you know, vision casting, goal based, you know, in that new year is establishing your vision for the future and I'm, you know, one of those people that I host a vision boarding party every um January. So, vision, boarding party. Yes, I was literally getting texts this year because I was delayed and sending out my invitation to everyone, like hey was literally getting texts this year because I was delayed and sending out my invitation to everyone like hey, are you doing it this year?
Speaker 3So what was on your vision boarding party last year? Thanks, for the invite, by the way.
Speaker 1Sorry, um, it's a girls, it's a girls only. Oh, nevermind, it's only for the girls, um, but yeah, so last year it was, I did a bigger board than I normally do just because of what I had, so it was a lot.
Speaker 3But you had a bigger board or he had more goals at a bigger board.
Speaker 1Um, but uh, essentially I love to do it because I feel like the boards are kind of magical, because every time I've done one I've accomplished like everything on it.
Speaker 3Magical boards.
Speaker 1They're magical, in my opinion. Do these come?
Speaker 3from Hobby Lobby, walmart Target.
Speaker 1I've had them from Hobby Lobby, I don't know where my current one actually came from?
Speaker 3Are these whiteboards or are these? They're like cork boards. Oh, okay, so I have friends though.
Speaker 1So it's like a crafting. It's a crafting, it's like era kind of moment. No, no, boys there, they don't want to, they don't want the girly like yeah, no, they, they don't, they don't want to be there for that. They. They politely go to like a female, female, uh uh. Goal setting only is basically what this is Okay, yes, is what is what the party is?
Speaker 3I'm kind of picturing like you know, interior designer comes to our house and it's going to remodel everything, and she has this board and then little pictures of this. It's not your actual, what it's actually going to look like for you, but this is the, this is the vision. Is that kind of what you're doing?
Speaker 1Yes, exactly. So I'm the one that, like, I start scouring Pinterest like a month in advance of like going ahead and like brainstorming what my goals are and then trying to find pictures that articulate that goal. So, like this year, it was like passing and exams were on there. So there's like a little fortune cookie that said you'll pass a hard test or something on it. And then there was you know, for, like racing, I had different races that I wanted to go to. So like the Indy 500 was on there and like oh, that's right, that's right.
Speaker 3Formula One.
Speaker 1Formula One was on there, so Texas was on there, guys she's taken right now, but for the right price.
Speaker 3Formula One Formula One junkie here.
Speaker 1Yeah, formula One, indycar, the whole thing. Indycar you can find me at like half the races most of the season, so I'm always there, okay, but anyways, yes, so that was like my vision board this year and it hangs up in my kitchen so it's really funny. When everyone comes over, whoever it is, they'll be like what is this?
Speaker 3and I'm like it's my vision board for the year and they're like no way, that's pretty cool because it's sort of like art, but at the same time, if you had a complete stranger over, they probably wouldn't say anything yes, and they would just they would just see that there and that's your goals, but they don't know what your goals yes so, like I was thinking, you guys were like taking, taking poster board, like we used in elementary school, and like writing goal one, goal two, that's. That's that's my brain.
Speaker 1Yeah, so yes I mean, you can use a poster board if you want. We I have friends that they'll just come over with a poster board, but they'll still like deck it out with all pictures.
Speaker 3Yeah, I would say they're still cutting stuff out.
Speaker 1Yes, exactly Got it.
Speaker 1But that, all to say, establishing your vision's huge and having it tangible in a way that you can see it really regularly is huge.
Speaker 1And you don't have to have a vision board necessarily if you're not crafty of that sort, but just having your goals, like regularly there and present, and figuring out what your vision is. So it's like every year, it's great for us as a girl group to sit down and just think what is my goal for the year and what do I want to do, and what is my vision for the next 365 days, if not longer. You know, having your five-year plan, your 10-year plan. How do I get towards that five-year goal this year? How do I work towards that five or 10-year goal this year? Like, what are my next steps that I need to do? And so that's really great for us and that's something that, going into your financial picture, you need to know what you want, and I think that's something that we talk about in meetings, too, with our clients as they come in, you know, wanting to know their vision or their mission statement, which I think is something that throws off all of our clients, cause they're like what, what?
Speaker 1why, do you want to know that?
Speaker 3It's just, statements are so, so boring. But if you do it like the Donald Miller way, uh, they, they're, they're, they're really good, I mean. I would say if, for most of our young clients, you know their mission is to give their kids better opportunities than what they had, or create the best opportunities for their children while creating legacy experiences, while traveling experiences, while traveling, that's like 60% of the people that come through, and so what that does is it frames the conversations going forward.
Speaker 3So, hey, we want to move. Okay, great, you want to move. But do you want to move to a house so expensive that you can't hit your mission?
Speaker 1Right.
Speaker 2So, that.
Speaker 3that's how it comes back into play. I think it's very different from the firms that just want to manage your assets and move on Right. It's somehow getting to know a client and but also taking that mission and putting on the one page plan, which is a summary. So at the end of the planning you say this is what our goal is and something we revisit once a year.
Speaker 3It's not, it doesn't sound as hokey as we're making it out to be, but it's not a cork board and pictures, but it's a verbal, written version of that Right.
Speaker 1Well, and I think even our one page plan kind of is our vision board for our clients in a way like that is their little snapshot vision board that they can look back on throughout the year and see what their action items were, where they were a year ago.
Speaker 1For some of them it's really wild to look and, you know, have them come in, especially after the returns we've had in the market this year, and see where their account values were last year on that one page plan compared to where they are this year and just to see how they've grown, whether that is from investing more into those accounts or just natural market growth.
Speaker 1It's been really great to just have those kinds of conversations as well, because they are really able to see that snapshot in time each year, um, relatively close. So it is great to have that just tangible for you and to have it going into having your vision as you try and establish what you should have moving forward. And that kind of leads us into our next point of building a budget. And so if you know your vision, then you can know where to take inventory, like on your own life, of like figuring out exactly where you're spending your money, where your dollar's going, so that then you really do want to kind of analyze all of your expenses, you know, to make sure you are on track, because I know I fall into the trap of the subscription junkie Like I'll start a free trial and anybody with an iPhone anybody with an iPhone.
Speaker 1Literally, I wish there was just like an easy button. Then it was like hey, we're charging you tomorrow as like a notification cancel now.
Managing Subscriptions and Spending Wisely
Speaker 3And of course not but um well, some do, I feel like some do some do in an email but, yeah. I know what you mean. Yes, what's really bad is when you have a family account and your kids are signing up for stuff. I can't imagine, I don't know how they do it, because I'm supposed to be able to approve it first. So in-app purchases always have to approve, but yet they sign up for apps that have subscription fees all the time.
Speaker 3It's like mostly video editing, you know cause they're all these kids are trying to be TikTok Instagram stars, so I love it to watch that stuff.
Speaker 1They're on CapCut doing all the things. That's hilarious, yeah, but definitely like, like my thing this year that I really want to do and I haven't done it yet but is canceling all my subscriptions for the new year and then seeing which ones I go back to.
Speaker 2Yeah.
Speaker 1And so I just got a new phone, like in November, and I had to start completely from scratch. So I didn't transfer anything cause I went down in storage so I couldn't transfer over my phone data, so like had to start over with all the apps and everything, and I've been like this is so refreshing.
Speaker 3See, that's what I do when my wife is shopping and I'm just waiting in the most stores have gentlemen waiting areas, the one's odd chair in the corner. Uh, I sit there and I just start like a page one of my phone. I don't need that app. I'll delete it. I'll delete that. I'll delete that. I never quite finished, so it always gives me something to do while I'm I'm waiting.
Speaker 1Oh, definitely. Well, I saw your LinkedIn post the other day that made me laugh, that you were like. I've added X to my first page of my phone. And I was like I never have used the first page of my phone. I'm like this is so different way of like understanding your phone.
Speaker 3Yeah, no, all the important stuff's on the first page and then I have a unique filing system, right, but? But yes, if you're on X, I don't have any friends. Are you calling friends or connections? I don't know what they are.
Speaker 1But yeah, followers on.
Speaker 3X. Yeah, it's a great place to get get news. But yeah, it's. I chose the name bullish pilot, so it's B? U L L instead of an eye, it's a one. Oh.
Speaker 1So it's B-U-L-L instead of an I. It's a one. Oh, because she's the number one bullish pilot.
Speaker 3Yeah, bullish because that's the market side, and pilot because I'm a pilot, so that kind of goes together. So, yeah, if you're listening, you're on Twitter, look me up. You probably won't see anything interesting and nobody. I get six views. It's really pathetic. Not you looking at the insights. But I can post something to Facebook and get you know a hundred comments and likes or whatever. But yeah, I just don't have my people on X yet.
Speaker 1Yeah, you just share the link on.
Speaker 3Facebook. I might be too old for X.
Speaker 1No, that's funny. But all that to say, evaluate your subscriptions and see, you know where you're spending money that doesn't need to be spent necessarily, and like reducing just your overall unnecessary expenses that aren't working you towards your overall goal, because there is so much money that can just be wasted on the different platforms that we have all in our lives now, especially with streaming services and everything like that.
Speaker 3Yeah, for our business owners to go through your credit card statements and look for those unnecessary charges because you might have be signed up for something that you don't even know that you're signed up for. And then going through the bank statements going do we really need to have this subscription? There's so many things out there AI especially that can support, support businesses, and you try it. You think I'm going to use this and you don't really use it. You can probably find a thousand dollars a month if your business is large enough and just stuff that creeps up. And then your next point here I like this one think before you spend. So it's so easy, especially for successful families. They don't really have to think about a hundred dollars or $20 purchases.
Speaker 3I've always told there's different levels of wealth. There's. I think the first level is you can go to the grocery store and you just buy whatever you want, don't really care. And then the second level is going and eating out and you don't really care what it costs. It just is what it is Right. And then I think the third level is when you travel, you don't even care, you just buy the first class ticket. You get to stay at the nice hotel. It is what it is.
Building Sustainable Financial Habits
Speaker 3I'm not quite there yet I don't feel like cause I do the first two, but I get to the third one and I'm like, oh, I don't know, nope, we're right in the back.
Speaker 1Well, you have a lot. You have a lot of people, though, Like you know, like that's true.
Speaker 3We take five people across the country.
Speaker 1And then sometimes you're like the nice dad that like brings the friends no well, it's not being nice.
Speaker 3It's about survival, because if you bring a friend, everyone behaves better because you have a stranger in the house.
Speaker 1Right, you gotta keep up.
Speaker 3You have a stranger in the airbnb, you gotta you gotta keep up the the look that we're a happy family you know you can't let the travel stress get to you. Too bad it's when it's when the same people keep coming and they feel like family, and then your kids start arguing with each other. That's when I okay, we gotta get new friend Right. That one can't come anymore. Exactly.
Speaker 1That's funny, no, but definitely thinking before you spend and like just going back to that, is it on track for your goals? Like thinking before you're doing that and you know, even I mean definitely falling into that trap of just swiping the card and knowing that it'll go through is like such a blessing in so many ways.
Speaker 1but it's also understanding that you do have a greater picture that you're working for and working towards, and so you do still want to be on track for that, and you know it is just Thinking in line with that and making sure you're always working towards, like those stepping stones, and also, of course, splurging in the ways that you can and that are working like within your budgeting overall.
Speaker 3Your stat here is very concerning 82% of. Americans have budgets, but 84% of the 82 say that they overspend regularly from their budget. So I feel like having a good budget. Everyone wants to be physically responsible, but no one has the willpower to actually follow the budget Exactly.
Speaker 1Exactly.
Speaker 1Well, and I think the thing is is that you have to be practical when you're building the budget.
Speaker 1And I think a lot of times you have this aspiration and it's like it's kind of like weight loss you have this aspiration I'm going to lose 20 pounds in the first month, which one is not healthy, but two you're like it's also just not sustainable and it's like that's why so many people lose the weight loss regimen because it's not sustainable.
Speaker 1And so it's something where, when you are building that budget, you want to make sure it's practical and sustainable and it's analyzing your current expenses. So if that's looking at your credit card statement or your debit card statement, whatever you use, and saying, okay, practically I spend $400 on groceries a month, I practically need to budget that because likelihood I'm not going to change that that drastically or whatever it may be, um, and so it's just kind of planning for that and also knowing where you can make those cutbacks and be intentional about that um in your budgeting. But for sure, like I think that's where people fall into that trap of they sit down new year, new quarter, whatever it may be and set these great aspirational goals, but they're just a little too far fetched for what they personally will be able to obtain in a poll.
Speaker 3That's kind of how we do financial planning. I mean, we could really stress the person out by saying you gotta be doing, you gotta be maxing out your 401k. You gotta be uh, putting in $700 per child for uh college savings in five, 29. You've got three children? Um, right, you need to be paying extra in your home to get it paid down by by uh age 65. There's a million things we're all supposed to be doing. You have to break them up and prioritize and this is, uh, this is one of those things where you, you, you have to create a realistic situation. We always want to give realistic advice, um, but do you want to make sure you're you're giving yourself realistic advice or setting realistic expectations? It's kind of like me, right, I'm cutting out all sugar. You know how hard it is to cut out all sugar.
Speaker 1I did not know you were doing that.
Speaker 3Well, I did it, I did it for a a while because because I had really bad blood pressure at one of my doctor visits followed. It scared me and then I dropped some weight really fast because I just cut out the sugar, yeah, but then over time you're like I'll just get one I'll just get. I love pecan pie this this time of year, so it's like, oh, someone made it, my mom made pecan pie, or?
Speaker 2whoever made it?
Speaker 3pecan pie right you get that one taste and you're right, you're right back and the weight comes right back, Uh, so it's kind of like I'm not going to eat out. Well, that's probably not realistic this day and age. As fast as we move, uh, as families and all the things that our kids are doing, it's like, okay, you just, you just get it. You just know that you're going to have to do that. I go back to pay yourself first, If you know how much you need to be either a, depending on who. We're talking to eliminating debt. Then you say I'm going to apply X amount of debt, I'm not going to any more debt and therefore I have to live on the remainder.
Speaker 3And then you can force yourself to do that Typically 18 months to get a bad situations usually and then if you're just need to be saving more for your future self, that's real easy yeah because now you have excess money, but the money's going to be taken out first your 401k, or then maybe an opportunity fund it disappears and then the rest of it. You just force yourself to live within those means, as if that's all you've got definitely um.
Speaker 1So that certainly helps with with um thinking before you're spending because you're saving before you're even thinking yes, exactly, and that kind of goes into one of our next bullet points, which is automating your savings.
Speaker 1Yep and you know, setting that up on an auto deposit. So, like that's personally how I have my account set up is that after the paycheck hits it automatically saves into my brokerage account or whatever my emergency savings account is, those kinds of things, just to make sure that I'm already funding those right as soon as I've paid the rent and everything else. So then whatever's left over after like the second of the month is what I have for the month, right, exactly, and that way it's already. Just if you don't have the money and you haven't seen the money, then you can't spend it.
Speaker 3Right.
Speaker 1Like, and it's there if you need it. And it's a crutch to fall back on. If you have a crazy expense, that you know you need new tires for your car, whatever it may be, um, that you can pull that money from. But, overall, like, you've set up those auto deposits, so you've established what you need and you've paid yourself first so that then you can stress-free, in a more stress-free manner, you know, go out and spend, go out to eat once or twice, however many times that you've allotted in your budget, and, you know, do those things that you enjoy, without having to have the stress of oh, I really still need to save into my brokerage account this month, or I really need to save into my emergency savings this month, and I've just dwindled that down. So if you're doing that first, right off the bat, then you definitely have a great opportunity for greater success, and that just going into for those expected expenses like cars and college. And if you're saving for a house, like a lot of young people are, then that's something that you can go ahead and set up those auto deposits and start doing that early instead of, you know, waiting till it's. You know, right there at the time and you're like, oh dang, we're having to pay for private school. Or oh dang, we need a new car. And it's like, oh well, we could have saved for this five years ago. Or as soon as we got the new car, saved for um the next car. And so that does definitely come with your feasibility on how much you have at the end of each month. But there is just opportunities there to make sure that you're starting early and automating those savings from the get go.
Wealth and Debt Management
Speaker 1Are you curious why annuities keep coming up as a potential investment option? People are often told that annuities can effectively mitigate investment risks and help secure their financial future. However, annuities often benefit the salesperson and might not be the best choice for you as a consumer. To learn more about the various types of annuities, the negatives of owning them and better investment alternatives, we have a free ebook on our website just for you To download our ebook. Buyer, beware, why Do they Keep Trying to Sell you that Annuity? Simply click the link in the episode notes or visit wiserinvestorcom slash guides. Now let's get back to the episode.
Speaker 3Which is a great segue into having an emergency fund. So you know everybody talks about how much did you have? Six months to a year of expenses is what you want to carry. I think that equates to 50 to 100 000 for most families yes you want to have about 50 grand as a, as a reserve. Um, your stat here 27 of adults have no emergency savings.
Speaker 1Uh, that's bad's bad, I know it's May 2024. That's when that came out, um.
Speaker 3So having an emergency fund is is one. We missed one point, um, which I'll go back to, uh, which is wealth is quiet. Don't try to keep up with the Joneses. I think this is really important. Is it stay? Just stay in your lane. It looks like someone else is doing great. I've had so many young people over the years ask me. They say you know, I see these people and they have these big houses and they have these fancy cars. I was like I just don't think I'm doing that great, I'm doing something wrong. And they might be making $200,000 a year, and it's not that you're doing anything wrong, it's just that they're just fully extended. So don wrong, it's just that they're just fully extended yes, so don't don't try to chase somebody and then you end up going off a cliff with them.
Speaker 3Yes, stay, just stay in your lane, do your thing, focus on your, your long-term uh success. Dave ramsey has a saying you know, uh, what is it? Uh, uh, act like no one else today so you can be like no one else tomorrow. And that's so true because you think, you just think of all these situations, but you don't know what's happening. Or it could have been something that they were blessed with a large inheritance early, or you know they had help, or there's a trust fund, or you don't know exactly what's happening behind the scenes. Bottom line you do. You.
Speaker 1Yes, exactly, and like you just never know what's going on behind the scenes. Like there's so many people and overall that just come in, whether it's here or you just hear stories and talk to them personally, of they're going on these lavish trips, buying the you know best designer handbag or watches, all that, and then in reality they're, you know, stifled by credit card debt and are like really broken on the inside for you know, trying to figure out and, like you know, just really feel hopeless in their debt and so it's something that you wouldn't trade your safety net and all of that to feel you know the burden of that. So you just never know what someone's walking through in that Um, and everyone can put on a face. I mean, if anything we've just seen social media has so shown us, you know how easy it is to have the fake allure of you know right.
Speaker 1Indulgence and all of the just.
Speaker 3I don't know too many people on social media that say you know, man didn't get my bonus this year, or man it's a highlight reel and that's the thing, and I think that's where I always get concerned about people that say look at my new car. I'm like, hmm, what are we doing here?
Speaker 1Yeah, exactly, and that's the thing is. It's like that's the highlight reel and that's where everyone's like just posting their greatest success, and but I think it's also in the same token. It's because it's everyone, everyone's highlight reel, you have to take it with a grain of salt, right and um, anyone can put out the image that they want on online and to not get bogged down by that and to feel like you're behind um, everyone's in different boats overall.
Speaker 1So definitely, like wealth is more quiet and it's kind of like what you were saying and maybe you said this yesterday and we were talking about this, but you're going to see, the wealthier people are driving the Toyotas that they've had for 10 years. Um, they're not driving the newest Mercedes necessarily.
Speaker 3Um, there's actually studies about that, that most millionaires, even multimillionaires, um, the number one car was like Toyota, next one's like Honda Um, now could have been the Toyota Land Rover, who knows? But um, but still, um, it's not as flashy as you would, as you would think. Uh, actually, bmw was pretty high up on the list. I saw that, but that that you know, bmw has many different price points too. So, but, yeah, yeah, no, it's, it's not the, it's not the. Mercedes was even up there. Yes, it wasn't on the list.
Speaker 1Exactly and it's. It's just they're making those decisions to make sure that they're financially, you know, stable and that they have the longevity of the car and not to say that Mercedes wouldn't have a longevity of it in a car, but you know like they're making to make sure that they're making decisions that are reliable for them and there is like the longstanding that.
Speaker 3It's also putting your money. It's putting your money in assets that grow.
Speaker 1Exactly.
Speaker 3So it could be that they have a really large home, but most likely that home is going to increase in value not decrease as long as you can take care of it.
Speaker 3Right, or multiple properties or storage units seem really popular these days. Things like that I like. Number seven avoid debt. I think that this should be something that we just ingrain into our young people. Right now is you've got to avoid payments. People are still slaves. Millions. We have more now than ever in trillions of dollars in credit card debt that's not getting paid off.
Speaker 3People are spending 17 or more interest on right yes and one of the things back in 2020 was like people need access to loans and in, uh, loans and just banking type services more, and maybe that's a real thing. I didn't see any study that said you couldn't get access to that necessarily, but I would say a cash system is way better than having to get to get loans. Um, so I, I just, you know, especially predatory lending. Uh, I see that the, the, the. It used to be pawn shops, but now there's just like cash now which is basically, which is predatory lending?
Speaker 3Um, um, there are government controls on that, but that's like the dark side, I think, of all this. We don't really end up talking to clients that are in any of that. Honestly, you don't come to a wealth management firm typically if you have those kind of loans, or debt Fair, fair.
Speaker 3But the point is, if you can help give someone a leg up, do it. But if by maybe crafting a business deal or something like that to help them, that's one thing. But you know you have to stay away from debt. It just is. I just hate it with cars.
Speaker 3Cars are so expensive now but, I really hate it with cars because that's a losing asset. If you could drive a smaller or a cheaper car but you could put more money into your house, that's a better investment, quite honestly no, and I remember there was this trend on tiktok.
Speaker 1I'm showing my younger generation here but, um, there's a trend on tiktok, like six or so months ago, maybe a little bit longer than that, where it was people like talking about their cars. They're like I'm paying a thousand dollars a month for a car because I I had to have, you know, this feature, I had to have these heated, cooled seats and I felt like I needed this kind of color of a car, all this stuff, and it was like they were saying it funny. But then they were also like, no, actually don't do what I did. And it was just such a fascinating trend because some people were taking it in stride and they're like, yeah, paying, you know, $800 a month Cause I wanted pink lights in my car, you know, and they would laugh about it. But then there was also the other turn of it, where there are other people being like no, this is like don't do it.
Speaker 3And um, and I think that's something that it like can seem like we're saying you know, having wealth you got, you know keep fixing it, keep fixing that car, so you can buy something else, yes, and just making it affordable.
Speaker 1Cause even if you are going to have to have a payment on some things you can't pay cash because you are younger, then it's something where it makes sure that's a reasonable payment. You know it. No car payment should be a thousand dollars plus a month, like that's just even in today's market. I don't think it. If that's not something you can afford, yeah.
Speaker 3We have, we have someone, we have a new employee here at the office looking for a car for budgets $21,000. And I was looking last night actually for her and I was thinking, wow, you can actually find some really decent cars for $21,000. There's a lot. There's a lot to choose from. There's some Volkswagens, uh. There are a lot of Hondas, uh. Not too many Toyotas, unless you would go with the Corolla, but I'm an expert in this now, all of a sudden.
Speaker 3Uh, but yeah, there's a lot of reasonable cars that you would not be embarrassed to drive in that in that price range no there definitely is, and so there's.
Speaker 1There's a price point for everyone there. And I think the big thing, for young people too, is just not getting caught up in the credit card hype and I say that to myself as well that there is so much talk about, you know, getting the credit card points, doing that, but when we're talking about paying yourself first, you have to know how much is left in your bank account at the end of the month, like after you've spent on that day. You know, day two of the month, whenever it is that you've put all your expenses out, you need to know how much you have, because the credit card bill is going to come due. And it's like and I think that's where a lot of people get trapped is that they somehow, you know, just spent over $200 more than they should have one month. And it's like, oh, now I'm pulling from my savings because I wait what?
Speaker 1And it's like having that where it's like that quick of a slope and it's that quick to just somehow get off target that quickly. And then you're like, oh well, I need to pull out of this, and now I've had this unexpected expense. And then you're all of a sudden you're thrown off your course. And so it's just being smart with that and understanding how much you actually should be charging on the card, because, as a young person, most of us don't have, you know, the leeway to just run up the tab on the credit card and know we can pay it off, you know. So just be careful with that. And I feel like that's where I found a lot of like the younger generation struggle, because you you want all the credit card points and you hear all the benefits of credit card points. And don't get me wrong, I went to Austin fully paid for because I had credit card points.
Speaker 2It's amazing.
Speaker 1But it's also, you know, trying to find that balance of you know being smart with that and not overextending yourself, because credit card debt is consistently going up and like we've even seen it go up, as you know, closest like September 2024, the stat was that an average credit card debt was seven thousand two hundred dollars. That was getting rolled over each month, and so that's doesn't seem like a ton in the grand scheme of like trillions of dollars we talk about in debt, but that's a lot for an average person to have that also.
Speaker 3You apply that to the average income of household.
Speaker 2Household income around 60 grand that would be.
Utilizing Employer Benefits for Financial Success
Speaker 3That would be a big chunk to to tackle right, exactly. So let's look at point number eight you have here take advantage of employer benefits. So tell me exactly cause. We know that there's like an order to this. We we want to have eliminate debt. We want to build emergency reserves, which we've talked about. You want to then start saving for retirement. So, I'm assuming 401k benefit would be something you're talking about.
Speaker 1Yes, of course your 401k match is huge. So we want to make sure that we're accommodating that and getting at least the match. Even if it's your first job and you know have a little bit of flexibility to save, then go ahead and try and get to that employer match at least. So if it's, if your employer match is 6%, then try and contribute 6% of your paycheck to that to at least get that full benefit. And then if you can exceed that and get to the max each year, then of course to do that. But for the most part, prioritize definitely getting that match from the employer and then looking into you know a lot of employers offer health savings accounts as well and so making sure you're contributing there or at least having it open so that the employer can contribute.
Speaker 1I know sometimes it kind of depends on your employer if you have to contribute, for them to contribute or what that looks like, but definitely going ahead and having that open because that is a triple taxed savings account and you can.
Speaker 1There's more and more things getting added regularly to what you can use a health savings account on to. We would love for you to grow that as well, but definitely when you're younger, when you do have little expenses here and there on your insurance, because a lot of us will have, you know that, higher deductible just because you're not going to the doctor as much, potentially, and so definitely utilizing your HSA for any unexpected expenses is great, and also trying to get that growth as well and, while it's there, and so definitely prioritizing those two. And then the one thing that a lot of employers also have is a legal benefit. So establishing your estate planning like your will, your power of attorneys, medical directives you can do that sometimes through your employer, especially if they're a bigger corporation. A lot of them, you know, will allow you to opt into a legal benefit, and so we have a lot of clients that they'll use their legal benefit, whether it's like through Home Depot, Cisco, Delta, whoever.
Speaker 3That's creating wills, power of attorney, medical directives yes.
Speaker 1And so.
Speaker 3For free yes, and so For free, exactly. Sort of.
Speaker 1Sort of yeah, I think it's like a little amount out of your paycheck but, not near as much as it would be to actually go out to a local attorney and get that done, and a lot of them do have local attorneys you can partner with to get that. So definitely just taking advantage of those. And then life insurance especially if you have like a preexisting condition, you can get in on those group term policies, sometimes without like having to do a lot of the underwriting and still get it a little more for your coverage compared to even what the basic life insurance would be for an employer. So definitely just looking into those opportunities and making sure you're taking advantage of all of those is huge.
Speaker 3So, thinking about these eight points, you have share your vision, so who are we sharing our vision with?
Speaker 1So this is kind of a personal preference we talked about this earlier where it's really you want to share your vision, to have accountability, and it's something that sometimes you know, if it is something where you're trying to get out of debt, you don't want to share that with everyone and their mother.
Speaker 1It's something where you, you know, if it is something where you're trying to get out of debt, you don't want to share that with everyone and their mother. It's something where you really want to keep that between you and your spouse or you and like a really close friend, and it's just making sure that you're sharing your goals. Because when you get to have your friends come alongside you and root for you or your close family come alongside you, it changes the game genuinely and it makes it so much more encouraging. And when you do hit hiccups, they're there to pick you up and encourage you, and so that's something that you really just want to share your vision, because then you have someone who's you almost have that accountability with them and you're also wanting to make them proud and you're like hey, I've shared with you that I have all these goals for 2025. And like I want you to check in with me and they'll check in with you.
Speaker 1And then it's like you want to be able to say, yeah, I'm on track. You don't want to have to. You know, do the. Well, you know, I decided I wanted that new handbag from Celine. No, like it's, you get to decide and it's really having those friends and family that can come alongside you is massive and to have just that shared vision and then it creates just a great foster of like having those great conversations with one another, uh, goal setting, and then your whole friend group is on track for setting goals and it just makes a whole different dynamic.
Speaker 3So your generation seems to be more willing to do that. I would say that my generation maybe somewhat, um, tend to be still somewhat private about finances. Uh, my parents' generation, absolutely, and my grandparents, yeah, they would just never, never talk about that.
Speaker 3But I would say, at a minimum, you want your spouse taking this journey with you. Uh, occasionally we have people that come in and want to do planning, but it's just me, not, not, not the spouse and you're like, uh, you really want to do this journey together, because if you're gonna do something tough, it's hard to have someone pulling in the opposite direction.
Speaker 1Exactly Right, and it's like you go farther together than you ever will alone, and so it's just knowing that having a good team besides you is massive.
Speaker 3A lot of times finances are a sore spot with married couples, but it doesn't have to be. It's just sometimes having us as as mediators and the conversation helps people understand when we can explain things differently and and we don't. We're not emotionally involved either.
Speaker 1So exactly having that third party, and then it's like you're just able to go through everything and uh, yeah, have that mediator. That's huge for clients and to really just take it away from. Not everything's a mountain and sometimes, just because of the emotions that are attached to it, it gets made a mountain when it's really just like a little molehill that we can work that kind of goes along with our point Number 10 to uh chickens. Yes.
Speaker 3So you can't set this stuff now and then, by the end of March, not have revisit it.
Speaker 1Definitely, definitely, and it's huge to just sit down regularly and even if it's just you sit down annually to really do the vision casting, but try and make sure you're sitting down monthly, if not quarterly, at least, to go through and see where you're on track and make sure you are you know working towards the goals that you have set track and make sure you are you know working towards the goals that you have set, because it's so easy to you know set that goal at the beginning of the year and then not touch it for the rest. You know, have it for what is it that you like when you set a goal? It's like after if you can get through the first 20 days or something, then you're on track for the year, 30 days of working out or something along those lines.
Speaker 1Yes, it's something that, like most goals, end by like the 12th day of January and don't get touched. So it's just something that you really want to make sure that you are standing beside your goals and that you're on track for those and you can make this fun Like I know.
Speaker 1I've had friends that they've had it to where they don't meet monthly necessarily because that was too much for their family right but doing it quarterly, and they make it a fun date night, like they'll go out to dinner, they'll have a couple glasses of wine and they'll talk about it.
Speaker 1And they'll talk about, hey, like you had this goal set, where are you at? Like, if it's a work career goal or hey, where are finances at now? Like, and it's just something that, especially now that you can carry your accounts basically in your back pocket, you can discuss that at a you know dinner and it's just something that, especially now that you can carry your accounts basically in your back pocket, you can discuss that at a you know dinner and it's just making it fun. Or if it's like you don't have a spouse but you have a best friend that you've let in on your financial picture, then having a fun night with them and you get to you know goal cast together and make sure you're both supporting one another in that way. So it doesn't have to be this grudgy thing that just feels awful to do. It can be fun and exciting to sit down and see where you're at.
Speaker 3Thank you, michaela, for putting all this together. We have other podcasts related to goal setting Episode 238,. Instant Gratification is Instant Gratification. Running your Financial Goals Episode 221,. How to Prioritize Financial Goals Episode 200,. Setting and Achieving Financial Goals in the New Year. That was probably our one from last year, if I had to guess. Related YouTube videos we have a YouTube channel, a Wiser Retirement. Tips for sticking to your financial goals and six habits of financially successful people are all things that you can watch there. Thanks for listening to today's episode. If you're interested in learning more about Wiser Wealth Management or want to schedule a consultation, meet with one of our fiduciary financial advisors. You can do so by going to wiserinvestorcom or you can click in the link in the episode notes. Thanks, guys. We'll see you next week.
Speaker 2Thanks for listening to a Wiser Retirement Podcast. We hope you enjoyed today's episode. Make sure to subscribe wherever you're listening. That way you don't miss any new episodes. We'd also appreciate if you could leave a rating and review. If you have any questions about anything that was discussed today, head to wiserinvestorcom and reach out.
Speaker 2This episode was produced by Rachel Dotson. This podcast is strictly for informational purposes only and is not to be considered as investment advice or solicitation to buy or sell any financial products, securities, digital assets or any other investment vehicles, or solicitation to buy or sell any financial products, securities, digital assets or any other investment vehicles, or a basis to make any financial decisions. Wiser Wealth Management Incorporated is a registered investor advisor with the SEC. The host and or guests may personally own securities, digital assets or other investment vehicles mentioned on this podcast. Neither the host nor guests of the show are compensated for their participation and no referral fees are paid to or received by any host or guest for clients, listeners or similar interests. Investments involve risk and, unless otherwise stated, are not guaranteed. Be sure to first consult with a qualified financial advisor, tax professional, insurance professional and or legal professional before implementing any strategy discussed herein. Past performance is not indicative of future performance.
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