Before I joined Wallet Squirrel, money was a major stress point in my life. The term “financial responsibility” was something I was not familiar with. I didn’t know how to properly manage my own finances. I didn’t know how to budget. I came from a wealthy family where I saw my parents act the way they wanted, they bought it. I learned later in life that wasn’t true, I just didn’t see them quietly saving money for two so they could buy that Lexus.
Anyway, my lack of financial responsibility and knowledge was not a good situation to be in. We were burning out our savings and slowly building up some credit card debt.
At this point I was tense. I was nervous. I was nervous. These emotions prevented me from being a good husband or friend. I didn’t know what to do from here.
Enter Wallet Squirrel and the financial freedom community.
Over the past six to seven years, I’ve learned that being disciplined with money is very liberating. I no longer have those negative emotions that revolve around money. While we’re not where I want us to be yet, I’m actually really happy with where we stand financially. We’re going in the right direction. It’s a long game.
If you feel the same negative emotions as I do, it’s your turn to take on the financial responsibility for self-care. Although it is a challenge, it is worth every penny!
1. Set goals by budgeting
The biggest self-care item to help your wallet is setting a budget. Some people think that budgets are restrictive, but I think they are a tool for freedom. They tell me exactly how much I can spend and that is a relief. As long as I know I’m spending within the budget amounts I’ve set for myself, I know I’m spending within my means.
Since I track my spending to stay within a target, I don’t have to worry about my spending. This is very liberating.
There are many tools to keep track of your expenses. I used to use a simple spreadsheet, but that takes a lot of time to maintain. Now I prefer to use Intuit’s Mint app, which allows me to track my expenses automatically. There is still some manual work, but it is so much easier now.
2. Treat yourself while earning money back
There are too many apps that allow you to earn rewards to go into more detail today. The idea here is that we should enjoy life, so you need to make sure you get money back for things you love.
Some ideas to earn money back.
Credit Cards – My wife and I live in Colorado. We love the outdoors. Good outdoor gear is expensive! That’s why we use the REI credit card for our daily purchases. Each year we usually get a $400 gift card to REI, which we can use to buy our gear for the coming year. We are planning to switch to a travel card.
Let me know in the comment box if you have a favorite travel credit card.
Rewards Programs – Join a rewards program to earn a free cup of coffee or sandwich. While not as sexy, we enjoy Kroger’s rewards program for our groceries. It helps tremendously with our gas bill. Subscriptions – There are some household items that we buy monthly, so we subscribed to them through Amazon. Amazon will reward you with a slightly lower price. Annual sale – Wait to buy until an annual sale occurs. Many companies have them. We take advantage of REIs every year with our rewards. Planning to travel? Be sure to plan ahead to buy so you can wait for an airline to have a big sale.
How do you earn money back for things you love?
3. Find items in your budget that you can cut back on
In the past year, my wife and I found about ten areas in our budget where we could save money on a monthly basis.
Some of those items were:
Refinancing – We refinanced in mid-2021. Our home had increased in value by over $100k, so we decided to take advantage of this unique time. By refinancing, we were able to cancel private mortgage insurance and pay off my student loans. Here are some more details about the refinancing process. Internet Modem – Stupid of me, but I didn’t realize you had to pay the cable company $15 a month to use their cable modem so you can access the product you’re paying them for. What a rip off! I learned that you can use your cable modem and send the cable company back to drop that $15 a month. Good cable modems are inexpensive and easy to set up. Here’s the one I bought. Cut Subscriptions – My wife and I were talking about subscriptions that we didn’t use much. While they were nice to have, they weren’t worth it because we didn’t use them often. The costs of subscriptions add up very quickly. Ask yourself, am I really using this subscription? Phone Bill – We decided to switch to Google Fi from the very expensive Verizon. There are now many inexpensive cell service options, such as Google Fi or Ryan Reynold’s Mint Mobile. So far, the move has been worth it, reducing our bill by nearly $70 a month.
Overall, we’re saving just under $700 a month with all the cuts we’ve made. This works out to over $8,000 a year! That’s enough to take our kids to Disney World next year! Who am I kidding, that trip is for my wife and me.
4. Save an emergency fund
Emergency funds are so great! I didn’t know about it until Andrew wrote about it in his My Emergency Fund article.
My wife and I have a house with a lot of things that can break. That’s why we keep a fund the size of our largest item. What is that article? There are too many of them, but we are currently concentrating on our heating and air conditioning. Both are about 20 years old so if one breaks, the other will need to be replaced to be most efficient. I’ve been getting estimates that this replacement would be $10k to $13k, so we’re keeping $15k in our emergency fund to give some more wiggle room.
When I put this money away, I feel like a weight will be lifted off my chest. I know this release will come sometime in the near future. Instead of worrying about how we’re going to pay for it, we already have know-how.
Meanwhile, we are saving to replace the units on our own schedule without diving into our emergency fund.
Emergency funds are so important for financial security in case you get fired. The $15,000 we saved would get us through six months, with some budget adjustments, if my wife or I were fired from our job.
5. Invest in your future
The stock market can make many people nervous. That’s very understandable, especially with how volatile it has been over the past two years. Buying long-term investments is not for yourself today, but for your future self. If you invest wisely, your future self will thank you immensely!
There are many ways you can reduce this risk.
ETFs – These tend to perform as the market does. I really enjoy every ETF offered by VanGuard. Large Caps with Dividends – Andrew likes to buy large cap stocks that pay dividends. Owning a diverse group of large caps is usually a very conservative approach. In addition, they pay out dividends that can be reinvested. Once you’ve bought enough, the snowball effect really starts to accelerate. Enhancement – Enhancement is a kind of digital broker. You create an account with them, tell them how aggressive/conservative you want to be and then invest some money with them. From there they will arrange everything for you. I really enjoy their process.
6. Set up term life insurance for your family
Until recently, this financial self-care item did not click. In recent years I have had two children, so my financial responsibility has increased enormously. Sadly, too many people close to my heart have passed away. Those who left us included two cousins who were younger than me and my mother’s father and best friend who were both under 60. Three out of four of these deaths were highly unexpected. The other was of a very aggressive cancer that had been diagnosed in her just 12 months earlier.
The moral of that sad story is that we never know when we’ll pass. We have plans to stay here until we are 100, but those plans are very fragile.
I didn’t want to leave my wife without a financial security blanket. With all the extra financial responsibility my wife and I have taken on, I had to leave her with something. That is why I decided to take out an extra life insurance policy on top of what my work yields.
There are many philosophies about how much life insurance you should get. My wife and I decided to provide the other with enough life insurance to get us through three years of expenses (use your budget from above to calculate this amount).
Only you know your situation, so I can’t recommend how much life insurance you should buy. Using the above tools, you should find the amount that you think is best for you and your family.
Financial responsibility is self-care
Let’s face it, financial responsibility isn’t the most fun and glamorous thing out there. The fact is, unless we have millions of dollars in the bank, we have to take care of our finances. If we don’t, the stress of poor financial health will negatively impact our actual health. From my own experience I can tell you that it is 100% worth it.
What financial responsibility have you taken on as self-care?
Are you not satisfied with your current income and do you want to earn some extra money? Over the years, Andrew and I have compiled a huge list of ways to make money. I highly recommend checking out this list to see if anything catches your eye!
Wallet Squirrel is a personal finance blog by best friends Andrew & Adam about how money works, building sideline businesses and the benefits of investing the profits smartly. Featured on MSN Money, AOL Finance and more!
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This post Financial responsibility is self-care. 6 ways to relieve your financial stress.
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