Financial Independence Made Simple

Jess Quindlen: [00:00:00] Welcome back to the Sound Cents podcast. I'm Jessica Quindlen. Today we're discussing financial independence made simple. I have our Director of Financial Wellbeing, Bree Shellito. Hi Bree.

Bree Shellito: Hey, Jess.

Jess Quindlen: And our Community Educator Lead, Laura Straub. Hello, Laura.

Laura Straub: Hey. Hey.

Jess Quindlen: All right, Bree, let's start with you. What does financial independence mean and why is it such a powerful goal for so many people?

Bree Shellito: Jess, it really is a powerful goal because financial independence means having the freedom and flexibility to make choices that align with your goals without having to constantly worry about money. We want folks to feel secure and confident in their day-to-day lives, and for many people it's not about being wealthy, it's about reducing stress, building options, and not having to depend on others in ways that kind of feel limiting.

Jess Quindlen: I love that. That was a perfect answer. Laura, what are the first steps someone should take if they want to work towards this financial independence and financial freedom?

Laura Straub: Well first, just take a moment. It's okay. Reflect on where you're at right now. Take a deep breath. Unfortunately, with [00:01:00] finances, it can be a slow move. So just knowing as you work toward it, it's okay. It can take a little bit.

But first things first, just start small and know where you're at. Know your numbers. Track your income and expenses, especially the expenses y'all. If you spend cash more freely, then that's something to be mindful of too. Keep those receipts so you can reflect on what those purchases were, if you can't just look at your bank statement, that sort of thing, if you're using cash versus debit cards or credit cards.

And then the other thing is to create a simple budget. So just a plan for our money, right? Give every dollar a job. So, if you're putting it in savings, what are you saving for? What is your goal for it? That way you can really keep account to what you're trying to save up for, and what you're doing with your money.

And then set a short-term goal. Whether you have a credit card you're wanting to pay off or a savings goal that you want to accomplish, set a small short-term goal that you can work toward, get that confidence up and start working your way [00:02:00] toward momentum. Keep it going. It’s going to be a lifelong thing that we're always checking our finances.

Jess Quindlen: Yes. I love that. I love that with financial independence you don't have to just focus on that far away goal. You can set the small ones, accomplish those, and it feels much more attainable.

So, budgeting. One of our favorite conversations. How can building a budget help someone feel more in control? And how does it tie in specifically to financial independence?

Bree Shellito: Yeah, it definitely ties into independence. We often joke that budgets are kind of like a GPS for your money. It's not supposed to limit you. It's supposed to guide you. So, understanding where you're coming from, where you're going, it all makes a big difference, and helps you avoid those detours, like overspending or indulging a little too much. But when you know what's coming in, what's going out and where you want it to go, that's really where you can build that confidence. And confidence is a game changer on the path to financial independence.

Jess Quindlen: That was fantastic. Alright, so switching gears to another favorite topic but isn't exactly as we'll say, [00:03:00] “positive” necessarily —debt.

What role does debt play in someone's financial journey and how can paying it down really help to unlock that freedom and independence?

Laura Straub: Debt can be a tool too, but debt can also just feel like a really big weight on us if we're not managing it appropriately or using it in a way that's helping us.

So, making sure we're paying it down, because then it gives you that freedom of that income. If you're not making that payment anymore, you can use that payment for something else. You can put it toward a vacation down the line or retirement instead of paying off a credit card debt. When it comes to debt, just taking a moment, reflecting, seeing what you can do and accomplish how much you can spend on each kind of debt.

And then the biggest thing too, celebrate the small wins. Not with monetary ways, but ways that we can be like, “Yes, I did it. I accomplished a small goal.” It keeps that momentum going. That's the biggest thing.

And then the other [00:04:00] piece I would like to mention too about debt is don't be shameful about it. It's okay. Just know what you have and what you don't have in terms of your debt and how it's working for you.

Bree Shellito: There's so many plans that go alongside that as well. Just making a plan for the future. Not just to get out of it (debt), but to stay out of it.

Jess Quindlen: Absolutely. I love that. Removing the shame. For better or for worse, you are actually probably in the majority, a lot of people have debt, big and small. And it's okay. But just trying to figure it out.

Bree Shellito: And primarily what we're talking about is that high interest debt. Of course debt can be a tool. It absolutely can. There are some great different products that you can use to your advantage, but especially that high interest debt, we want to try our best to get out of that and avoid that.

But you're exactly right, we are not alone in that. Even in Colorado, it's an average of about $7,000, give or take, so you're definitely not alone.

Jess Quindlen: I think that that number is very helpful too. Alright, so now moving on to saving. Saving, as we know is essential. Emergency funds, all of those things are very important. I think it can be very hard to stay motivated towards [00:05:00] saving, especially when sometimes you save, and you feel like you're going somewhere and then something happens and you need to use it to get yourself out of debt, an emergency, flat tire, et cetera.

Do you have tips on setting savings goals that stick and also tips to help give yourself grace and be kind in that savings is this back and forth journey?

Bree Shellito: Absolutely. So financial wellbeing is one of the pillars of several well-being categories. So, thinking in terms of all ways of wellbeing, we joke about money and saving kind of being like eating kale — it's good for you but, meh.

So, you need to find ways to make it fun and also ways to make it visual, especially for our crafty friends. Crafts are not just for children. It's great to make yourself charts where you can color along and follow along with what you're doing. It’s really helpful just putting something aside to track your progress, whether that's a paper chain or a sticker chart. Ways to make it visual are great.

If you're not into crafting, that's fine too. Even putting a name on your savings accounts, like “My Paris Trip” or “Future Me Fund.” When we're [00:06:00] talking about wellbeing, we're talking a lot about future you. What does future you need you to do today?

Not just financially, but so many other pillars of wellbeing. Really thinking about your future self and making sure to track your progress as you go can also add great automation to anything you're doing with your financial picture. So, setting aside a $5 transfer every week will really add up by the end of the year. Even if it's just $1 getting started with something, building up that momentum, it'll definitely help you stay on track.

Laura Straub: Yeah, it's all about that balance too and that trade off of do I want this instant gratification thing, or do I want something in the future? And really balancing that for yourself and what works for your budget too.

Jess Quindlen: Yes. And I think one thing, Emma, who we've had on the show several times said once that really stuck with me is wait 24 hours. Then, see if you still want it or still need it. I know I've done that on several occasions and sometimes I do. And then other times, I actually forget.

There's something I was just thinking of that I almost bought the other day and I was going to wait 24 hours and I just thought of it now. And that was like three days ago.

Bree Shellito: Well, [00:07:00] for online shoppers kind of a shifty tip sometimes is to put it in the cart and sometimes they'll send you a coupon.

So if you just wait and delay, it can actually really pay off, not just in your thought process, but by actually costing you less money.

Jess Quindlen: That's very true. All right, so I touched on this a bit, but building a bit more on savings we have, of course, emergency funds. How important is it to have one and where does that fit into the bigger picture of both saving and then, financial independence and security?

Laura Straub: Yeah, so an emergency fund is your financial safety net. It can turn a crisis into just a crummy day rather than this catastrophic event for yourself. It can really help you, even with some of those anxieties too, if you lost your job or layoffs or something and you had this safety net saved up, it may alleviate some of that stress and anxiety around some financial things going on.

The other big thing is just starting small if you don't have an emergency account. So, gearing up for $100 and then working your way toward $500 [00:08:00] and then $1,000, and beyond that. It is nice to have that emergency fund because it helps you stay financially independent when life throws you those curve balls, such as like a flat tire or literally anything else that you just weren't planning for.

Jess Quindlen: I love that. What advice would you give to someone who feels that they've started late? Can financial independence still be within reach?

I know this is something I personally will admit that I “started late.” I was not in my twenties killing it in the financial game. So, you know, help us who might feel like, “Oh, I'm too late, so I'm just not going to start,” or “It's too overwhelming,” or anything like that.

Bree Shellito: You are not alone, Jess. Not at all. And there are plenty of folks out there that are thinking that same thing, so yes. A thousand times. It's never too late to start. I always like this proverb that says, the best time to plant a tree was 20 years ago. The second-best time is now. [00:09:00]

And the more that we think about it and just keep putting it off, you're going to wish you'd started yesterday or a year ago or whatever else. So, start today. Today's a great day. You're listening to this podcast. That's a great start. So just start now because it's absolutely within reach. You can start with what you can control today.

Small steps like cutting expenses, boosting savings, getting help with your debt. Those all add up. And again, your future self doesn't care when you started, they care that you did.

Jess Quindlen: Oh that. That's great. I love that. And it's so true. Hindsight is 2020. I think there's plenty of things, finances are not, that we're like, “Oh boy, I wish I had done that differently.”

But oh, well it happened. Nothing you can do about it. Might as well move forward and learn from it like that. That is only going to help. So I love that.

Alright, so if a listener walks away with just one takeaway today, what should it be when it comes to creating a life of financial independence?

Laura Straub: I think Bree had a few good little nuggets there.

Jess Quindlen: She absolutely did.

Laura Straub: But just know you are more capable than you think you are, and progress is more powerful than perfection. So just starting and doing anything that you can. Start where you're at right now, take one step and then just keep going. Financial independence isn't about having all the answers, it's just taking that first step and continuing to build the life you want.

Jess Quindlen: I love that. And I will say, isn't it, “comparison is the thief of joy.” And I feel like that's something I struggle with in finance a lot because I feel this, “oh my gosh, I started so late” and I haven't been working in a credit union my entire professional career.

And so sometimes I feel myself comparing where I'm like, “Oh, what if I had been smarter and done this and done that. What could I have now?” And that's not helpful because you know what? I got to do these other things and live my own life. So yeah, I think there's a lot of gems you can pull away.

Bree Shellito: Have your [00:11:00] own adventures.

Jess Quindlen: Yes, exactly. anything else to add?

Laura Straub: To your point too, Jess, with that, when we were in school, it was so easy to compare where we're at with our peers. But as soon as we're in adult world, we're all in such different trajectory. Don't compare yourself to others. Just look at what you want and what you want to accomplish.

Bree Shellito: The methods we have of comparing today to are things like social media. That is somebody's curated life, so keeping that in mind can be so helpful and freeing.

Jess Quindlen: Exactly. It's so true. you never know. That brings us to the end of our show. Bree, Laura, thanks so much for being here. It was great having you.

Bree Shellito & Laura Straub: Thanks for having us.

Jess Quindlen:  And now for our new segment brought to you by Dave Logan, the iconic voice of the Denver Broncos.

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Jessica Quindlen: Thank you for listening to Sound Cents from Ent Credit Union. Be sure to follow our podcast as well as rate and review us. I'm Jessica Quindlen. I will see you next month. Same time, same place. [00:12:00]