#FinHealthMatters: Six Figures Under

Monday, September 26, 2016

By Stephanie Jones

Have you ever avoided going to the doctor about an ache or pain simply because you were afraid of what the diagnosis might be?

That happens with finances too. In fact, that was totally me three years ago.

While my husband was in law school, I knew our debt was mounting, but I purposely avoided ever calculating the total. I figured that since there was nothing I could do about it, there was no sense in stressing over it.

I worried about the number, but when I finally saw what we owed, it was worse than I ever imagined.

We owed over $130,000.

On the outside we may have looked financially healthy. We owned a modest home. We avoided extravagant spending. We drove a normal used car. We looked fine, but inside we felt sick. Like many physical health issues, not all financial health problems are obvious. In fact, 57% of Americans report that they are struggling financially, including many that you might not guess.

Financial health starts with awareness.

I hadn’t realized it, but by actively opening our eyes to the details of our debt, I was taking a big step toward financial health.

We crunched the numbers to see how much interest we would pay on the normal student loan repayment schedule. That eye-opening experience motivated us to make a plan to pay them off much more quickly.

Awareness also involves keeping tabs on your account balances and being conscious of spending.

Financial health is composed of day-to-day decisions and habits.

I once heard that every food choice we make either contributes to good health or works to destroy it.

Similarly, each financial choice we make takes us closer to or further from our financial goals. Day-to-day decisions add up to create habits.

Over the past three years we have dedicated ourselves to paying student debt quickly. Along the way, we have developed healthy habits of budgeting and frugal living. Each time we exercise the willpower to delay gratification, we become stronger.

Financial health means looking toward the future.

My doctor frequently reminds me that to be healthy at 65 requires good diet and exercise choices at 35.

Financially, we also have to look past today and plan for the future. The specifics of planning for future financial health look different for each person or family, but usually include building an emergency fund, saving for retirement or children’s education, paying off debt, and increasing income.

During this time of focused debt payoff, our plans for the future have been limited–we chose to build momentum toward payoff instead of retirement. To cover the basics, we still built an emergency fund and saved until we were living on last month’s income. Partway through, we began making modest monthly payments into a college savings plan for each child, and signed up for matched retirement contributions when available. With our debt soon to be paid off, we’ll begin looking further into the future to work on our long-term financial health.

Financial health is a way of life, not a destination.

Financial health has more to do with the direction you’re headed than where you are. Financial health isn’t a destination, it’s a set of habits and a way of life.

Thankfully our bill of financial health is much cleaner than it was three years ago. Everything isn’t perfect, but we know what we’re doing, we have a solid plan, and we’re heading in the right direction.

And it feels so good!

This blog post originally appeared June 29, 2016 on Six Figures Under. It was one of the winners of a national #FinHealthMatters Day essay contest created by Financial Health Network. MetLife Foundation is a major sponsor of Financial Health Network’s ongoing consumer financial health work. To learn more about FinHealthMatters from Financial Health Network, sign up here.

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