Financial wellness is a vital part of adulthood, with the potential to make or break a person’s quality of life. With growing conversations around finances and bettering them, one might wonder: what does financial wellness look like, particularly when I’ve never seen it?  Our friend and financial planning expert, Nidhi Mathson shared her expertise around developing a financial growth mindest. Her earlier experiences were shaped by parents who were fiscally responsible, maintaining bills and saving for emergencies. But she, like many women, didn’t get to see much wealth-building, which is what most financial discussions focus on today.

    Having made her own vicarious jump from PR and marketing to life insurance financial planning, Nidhi gained new insights with this career pivot. As she navigated the transition between careers, Nidhi met with a financial advisor who supported her ability to stay afloat with a young, growing family.  The hope and peace of mind that her advisor instilled in her encouraged Nidhi to pursue a similar path. With Nidhi’s expertise, we’ve created a guide to help you develop stronger money management skills.

Financial Planning 101

    Financial wellness is a vital part of adulthood, with the potential to make or break a person’s quality of life. With growing conversations around finances and bettering them, one might wonder: what does financial wellness look like, particularly when I’ve never seen it?

    Financial planning begins with your first paycheck. The first thing that’s taken out of your paycheck is state and federal taxes, social security, and Medicare. With whatever is left over, you may pay bills, such as groceries, utilities, or rent/mortgage. Anything that is left over is for you to spend or save – consider paying yourself first – make a paycheck deduction for yourself that goes to an investment account and/or a savings account — this can be done by setting up an automatic deposit from your paycheck to these specific accounts. Any additional money left over is money you can spend guilt-free.

    When it comes to investing for the first time, one thing to remember about the stock market is that although it fluctuates, in the long term (10+ years), it’s historically trended upwards. Understanding your timeline and tolerance for risk will give you a better idea of how aggressive or conservative an investor you need to be.

    When the stock market is volatile, panicking and pulling money out can work against you – when the market is down, stocks are cheaper, so it may be a better time to buy. When the market is up, that’s when you will likely see the most gain. So, being patient when the market is down is important. Find investments that closely match your risk tolerance, so you don’t have to worry about losing money if that is your biggest fear about investing. 

    With generational behaviors having a direct impact on future output, it’s no surprise that most adults today are still struggling to make ends meet, falling short of many of the milestones that define the American Dream. While many young people are making immense strides, financially, it is still very challenging to “keep up” with the same socioeconomic trajectory as previous generations, leaving many of us confused and overwhelmed by what the future holds.

    From home and car ownership to having a successful work/life balance, there is a lot to juggle for the modern adult, whether they are coupled or not. For young women in particular, financial stability determines their options and freedom. With the age-old dichotomy between motherhood and shameless self-exploration, young women are being prompted now more than ever to have

a solid financial foundation, regardless of the path they choose.

    It is also important to note that a good career doesn’t necessarily guarantee healthy finances, which is where learning how to properly manage and invest one’s money comes to light.

“But I’m Just a Teenager, Why Do I Need to Be Thinking About My Finances?”

    Nidhi shared that “time is actually on your side” when it comes to financial wellness. The more time you have to build and enact a financial portfolio, the greater your financial history, which opens doors to a brighter future, sooner. Things like lower interest rates on credit cards, loans, and mortgages, and the ability to successfully lease a car, home, or apartment, are directly tied to one’s financial standing.

    “Financial wellness means putting your future-self first, while also taking care of your present-self.” Nidhi Mathson, a life insurance agent and financial advisor, shares her wisdom from first-hand experience. After making a major pivot into a field she never considered before, financial planning opened her mind, and wallet, to life-changing information about money.

    If there is one thing for you to remember, it’s that “budgeting, saving, and investing” are the cornerstones of financial wellness.

• Budgeting teaches you to live within your means, i.e., spending what you earn and nothing more.
• Saving teaches you how to prepare and protect yourself in case of emergencies (such as unexpected car and home repairs, credit card bills, or medical bills)
• Investing teaches you how to make your money work for you.

    Now that we understand the fundamentals of financial health, we can consider what that looks like in action. Proper budgeting, saving, and investing make it possible to successfully manage debt.

“But isn’t Debt Bad?”

    Debt, in the dictionary sense, isn’t the most ideal position to be in. However, our current financial system functions by rewarding debt (ever heard of tax breaks?). In other words, all debt is good debt, which is why learning how to manage it is so important. This is where credit comes in. 

    While it is a notoriously tricky option, one of the easiest ways to start building credit is with a credit card. With proper planning, it is possible to have a credit card without accumulating massive debt.  So, how is it done? To start,  making timely payments helps avoid or decrease high-interest rates. Nidhi shared that, “if you have a high interest rate (~7-10%), try to pay it off sooner rather than later. With a lower interest rate (~2-4%), you might be better off paying that off on time (vs. early) and putting some of the money into an investment that can earn you 7-10% back (more than the amount you're paying in interest).”

   Debt management is learning how to leverage it so that it ultimately starts working for you by generating more income that you can then budget, save, and/or invest for greater wealth.

“What if I Don’t Have A Credit Card or a Stable Job?”

    No matter what age you are or where you are in your financial journey, there is always something that can be done to improve your finances. If you haven’t been in the workforce long or if you face any other income challenges, start by budgeting and saving your money. A cool way to see these concepts unfold is through the “envelope method” Nidhi shared with us:

The Envelope System

    “This system involves having three or four envelopes, one for saving your money (maybe for a large purchase in the future, or just for a rainy day). The next envelope would be for budgeting, setting aside exactly the amount you need to spend on bills or regular costs such as gas or bus fare. Whatever is left can be divided into two additional envelopes: one for investing and one for spending. With the investing envelope, talk to your parents about how they can help you grow that money. The spending envelope can be used for anything - that is, money you can spend guilt-free.”

    Seeing money as a tool rather than something to fear or hoard, we can also realize that managing our finances isn’t so bad after all. When we are fully aware of our financial landscape, we are better able to prepare for and actualize our dreams and goals. So now, that dream house, car, or outfit you've wanted for years? That business you wanted to start or that degree you wanted to finish are now within reach once you make money management a priority. Budgeting, saving, and investing open doors and create stability that your future self will thank you for. The sooner you start taking intentional action toward financial wellness, the better; and it’s never too late to start. From our team at Thinkubator Media, thank you, Nidhi, for sharing your story and your expertise!