I think our mindsets are transient.
For most, we begin our adult lives prioritizing our careers and our income. It’s a very growth-oriented mindset. How do I make more? How do I get ahead? How do invest my money to get the greatest return?
And then, at a certain point, which varies for everyone, other things come into focus. We get married. A loved-one passes. We have a health scare. These types of events hit us like a load of bricks sometimes, and it shocks us. We realize there are more important things in life, and we shift gears to make sure we support those new priorities as best as possible.
These priorities typically fall into two categories: Health and Relationships
Much of the dialogue surrounding personal finances is very growth-oriented in nature, so I wanted to take some time to talk about how we can utilize our finances as a tool to support and better our health and relationships.
Health:
1. HSAs:
If you’re eligible to contribute, a Health Savings Account (HSA) can really be a great way to save on health-related expenses. Essentially, it helps you save on medical expenses because the funds you put into the account aren’t subject to tax. This can greatly help reduce the burden and stress related with medical bills.
2. Investing in diet and exercise:
Whether it’s a gym membership, a meal plan to help ensure you’re not eating out as much, or something as simple as a new pair of running shoes to help motivate you to exercise, I’m a big proponent of allocating part of your budget towards purchases that help improve your health. Often times, the benefits are greater than you realize. When your healthy and feel better, your performance in the office may improve too.
Relationships:
1. Gifting:
This is how many of us show our care for those around us. Whether it’s tangible gifts we buy during the holidays or monetary gifts we provide to our children or grandchildren, they all communicate the same thing: that we care. For educational gifting, 529s can be a good, tax-efficient option, and for tangible gifts, consider setting aside funds in ahigh-yield savings account (HYSA) at least a few months in advance. This will help you avoid overspending and help you be proactive in thinking about thoughtful gifts to buy for your intended recipient.
2. Charity:
We also care about our churches, charities, and non-profit organizations. Creating a tax-efficient charitable gifting plan, considering a donor advised fund (DAF), and documenting your charitable giving wishes in your estate planning documents are all steps that can help ensure you’re able to make an impact during and potentially after your lifetime.
3. Experiences:
One of the biggest regrets some people have is not spending enough time with family and/or not traveling when they had the chance. A trip with family or friends is time well spent and can help you strengthen your relationships with those you care about the most. Travel can be expensive, so planning trips and their associated costs out ahead of time, will help you prepare and not go into a hole when you decide to book. Consider, traveling off season or using credit card points to help offset the price tag.
4. Insurance:
Nobody wants their loved ones to experience any sort of financial hardship should something happen to themselves. This is why life insurance and disability insurance are so important. If your situation calls for it, having these coverages can help protect your loved ones in the instance that you pass away or are unable to work.
Final Remarks:
Using the financial tools available to us in the right way can really help us improve our health and relationships. My advice: Investing in these areas may not provide the highest monetary return on investment (ROI), but they’re well worth the dollars you put into them.
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