Managing Money Defining Financial Wellness in Your 20s and 30s

by Julie Anne Russell | October 01, 2018

When was the last time that thinking about finances gave you joy?

If the answer is when you slipped a dollar bill into your childhood piggy bank and felt flush, then it's time to consider your financial wellness.

Let's start by defining what financial wellness doesn’t mean for adults in their twenties and thirties: it’s not endless spreadsheets and intensive budgeting plans that you secretly know you’re going to fail at (again).

Instead, think of financial wellness as two essential parts: first, the security that you can take care of yourself and your loved ones in any situation and, second, the financial freedom of knowing your money will provide you with the things in life that give you joy — you know, the fun part!

Financial wellness is the payoff for all your financial planning — an outlook as much as the tangible state of your finances. And perhaps best of all, it's entirely personal, because it’s all about what you want from your money.

“Financial wellness has to mean different things at different ages,” says Robert Pagliarini, president of Pacifica Wealth Advisors in Irvine, CA, and author of Get Money Smart: Simple Lessons to Kickstart Your Financial Confidence & Grow Your Wealth.

“I look at financial wellness as a path and plan for the future. Are you actively taking steps to reach it? That’s what wellness is about,” he says. “The aim and action in reaching that destination.” But first, you need to figure out how to balance living in the moment with planning for the future.

I look at financial wellness as a path and plan for the future.
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Get organized

The first step, says Douglas Boneparth, president of Bone Fide Wealth in New York, NY, and co-author of The Millennial Money Fix, is becoming empowered about the fundamentals of personal finance, and then learning exactly where your money is going by mastering your cash flow.

“Shooting from the hip is reactive,” says Boneparth. “You always want to be proactive. That’s why organization is so important.” Take, for example, student loan debt. “If you’re organized, you may find opportunities to refinance your loans, or be able to restructure your payment plan,” says Boneparth. “Then you’ll spend less time worrying about debt, and maybe you’ll have more time to think about increasing your income.”

Invest your time

Young adulthood is a critical time to be investing in ways that don’t immediately add to the bottom line, says Pagliarini. “Most twenty-somethings feel they’re totally broke because they’re financially broke,” he says, “but I view wealth in a different way. Wealth isn’t just stocks and bonds. What they have going for them is time. And time is probably the most valuable asset any of us will ever have."

Use that time to improve yourself — to become more confident, to network, to get more skills, to build what he calls “human capital” — and your investment will pay off financially down the line, says Pagliarini.

As an entrepreneur, Ben Brown certainly agrees that time is his most valuable asset. The 29-year old Brooklyn, NY, resident started his own enterprise, an organization called the Association for Young Americans, two years ago, while he was working full-time at a consulting firm. “I was working in a demanding job, traveling quite a bit, and then was trying to start and build a company at night in my hotel and on the weekends back home,” says Brown.

Brown made a host of financial sacrifices, such as taking a pay cut and funding the first year of the business with his own earnings, but he views them positively, as investments in his own future. “My financial goals are similar to other young entrepreneurs,” says Brown. “I want to be comfortable, but I’m willing to forego some of that now to get it in the future.”

man working in woodshop

Have vision

What Brown has in spades is vision, and experts agree that it's the critical element in attaining financial wellness. “If you don’t envision a future, you don’t know what you should be saving for,” says Pagliarini.

For Carl Lukach, who works in corporate finance in New York, NY, setting big goals through his twenties and early thirties meant developing serious savings strategies and a budget to get there. “My goals were to have an apartment, have a car, have a wedding — major financial goals — and to send my kids through college someday, so we tackle each one at a time,” Lukach says.

He and his husband, Jeff Mihalakis, each handles different aspects of their finances, from investing to daily expenses. “It’s understanding what’s going to make you happy,” Lukach adds. “What are your aims? The sooner you realize your goals, the quicker you’re going to achieve them.”

By picturing what will make you happy, you can take the overwhelming thought of all the things you need to save to pay for (like the “R” word) and make them more tangible. “If I tell someone they need $2 million to retire, and they have $100,000 in student loan debt, that can be truly counterproductive,” says Pagliarini. “That just makes the target so unattainable. Focusing on aspects other than a number makes a whole lot more sense.”

If you don’t envision a future, you don’t know what you should be saving for.
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Even if you don’t have a perfectly clear picture of what you want from the rest of your life, start saving for your future, says Pagliarini. The simple act of saving can be transformative psychologically, he points out. “If you go from someone who doesn’t save to someone who saves a dollar a day, you’ve changed your identity,” he says. “It’s not about the amount, it’s changing who you think you are. That’s much more significant.”

Once you identify a vision for your future, then determine how much money you expect you’ll need for each goal and when you want to complete them. “I have good news: It’s not hard!” Boneparth says. “But, it is time-consuming, and it does take time to become disciplined.”

With a vision and a plan in place, a crucial shift takes place: Suddenly you’ll find that saving money doesn’t become a game of depriving yourself of what you want, but rather one of allocating money to where you want it to go. Or, as Lukach puts it simply: “It’s about enjoying the spending that you are able to do, and finding peace in the spending you're not able to do.”

Julie Anne Russell

enjoys empowering others (and herself) to dive into personal finance without fear. The Brooklyn-based writer's online work includes automotive, travel and finance writing, as well as profiles for Marie Claire.