Holistic wealth is about creating the circumstances in your life that allows you to be resilient and resourceful. I love these two words –– because they embody what I want for all women –– the ability to bounce back from life-altering setbacks and the ability to create and leverage resources to be financially independent. In my new book Holistic Wealth: 32 Life Lessons to Help You Find Purpose, Prosperity and Happiness, there's a whole section of the book filled with advice on how to achieve financial freedom.
Financial independence is one of the core concepts of living a holistically wealthy life. There are several strategies to get you to a place where you have enough income to pay your living expenses for the rest of your life without having to work full time. Whether this means retiring by the age of 40, or taking a more traditional route, building your financial portfolio depends on your financial identity. Here's an excerpt from the book:
A well-planned future also starts with developing your own financial identity. One way to do this is through financial literacy. Improving your financial literacy is also the greatest stimulant of wealth. Many of us make our first large purchase with a spouse or significant other. The first house, the first car, the wedding and honeymoon — these are all expenses tied to our expansionary years. We therefore transition into adulthood not having gained a full sense of our own personal financial identity. For instance, what is my investment identity? What are the things I will splurge on versus save on? This can also be tied to our values and mission in life. It is highly individual.
Each of us should have a financial identity — one that is distinct and separate from our spouse's or parents'. If you find yourself always wondering what your friends or parents think about the way you spend or invest, then it's an indication that you haven't fully figured out your financial identity. It's impossible to design a well-planned future without a proper financial identity — we end up living our lives in the footsteps of others—and possibly making the same money mistakes.
Holistic Wealth Book coverPhoto Courtesy of Keisha Blair
There are a few things you should be doing today that can help you rebound from setbacks in your future. Get a life insurance policy, plan for your retirement, and build an emergency fund, for starters. But your well-planned future also depends on developing your own financial identity. Here are five reasons why all women should develop their own financial identity:
It Relieves Worry And Stress
When you have your own financial identity you don't have to second guess every money move you make and you are confident that you are on the right track. Your own savings philosophy and investment philosophy that's tied to your personal values and mission is a key piece of becoming financially independent. It allows you to assess your goals and your money moves to ensure you're on the path to success.
It Leads To: A Life, Well Lived
This is the title to the opening chapter of my book. Its aptly named for the first chapter, because it's hard to have a life well lived, without having your own financial identity. When your money and spending decisions are constantly influenced by someone else –– your family and friends, a business partner you are on slippery turf. Not only does that railroad your dreams it puts your future in a precarious position.
It Fosters Taking Measured Risks
Taking measured risks is key to achieving a life, well-lived. It is important to take measured risks to achieve certain goals. For instance, the decision to buy that first home or investment property, or even starting that business you've always dreamed of, requires taking measured risks. Achieving your goals also rests on the realization that not taking measured risks, or simply not taking action at all, is detrimental to achieving holistic wealth. Yet in taking measured risks, we look for validation from others to do so. When we don't have a financial identity but look to the crowd for approval –– then taking measured risks becomes less likely, and we bow to the pressure of doing what everyone else is doing –– and not charting an individualized path forward.
It Allows For A Well-planned Future
Planning well means ensuring you have life insurance, adequate emergency savings to last for at least six months, and investments that can yield enough to enable financial resilience.
But your well-planned future also depends on developing your own financial identity.
Everyone should have a good hold on their spending. Developing a budget and building an emergency fund is paramount. Make sure you have life insurance in place. Focus on addressing debt. After that develop a savings plan (both short and long term) and stick to it.
It Prevents A Never-Ending Cycle of Money Mistakes
When you haven't developed your own financial identity you risk making the same money mistakes over and over again. In addition, we end up living our lives in the footsteps of others—and possibly making the same money mistakes. We get stuck in two-step cycle: We make our own money mistakes repeatedly – like getting into unnecessary debt, accumulating things we don't need –– and making the money mistakes others make – spending too much on entertainment or too many night out with friends.
Financial independence is one of the core concepts of living a holistically wealthy life.
In summary, having your own financial identity can save you from a lifetime of disappointment and frustration. It can make the difference between having a fulfilling happy life and constantly living in fear and anxiety about money issues. Most important of all, it can enable you to be financially resilient, and better able to weather the inevitable storms and setbacks that life brings.
This article was originally published October 28, 2019.
WRITTEN BYKeisha Blair