We all want a better life for our children. That’s the true American dream. It’s actually the dream of parents all over the world. That’s what financial health truly means.
When I was deployed to Iraq while serving in the Army, I saw that sentiment play out there as well. Every Iraqi that I talked to simply wanted a better life for their children, and they hoped the United States’ intervention would bring them that goal – more so than Saddam Hussein ever could.
The same was true in my parents’ house when I was growing up. My parents got divorced like so many others when I was young – about 12 years old. I can remember my single mother struggling to pay her bills month in and month out. She vowed that I would have a better life than she had – even if it bankrupted her.What does good financial health mean to you? What's your definition of financial health?Click To Tweet
What Financial Health Means to Me
Spending Less Than You Earn
Having great financial health means spending less than you earn and not having consumer debt hanging over your head.
Spending less than you earn is the staple in financial planning tips and advice. It’s the one thing that sets you up for success with your finances. By spending less than you earn each month, you stay out of debt and have money left over at the end of the month for other financial goals like saving for retirement, your children’s college educations, family vacations, and the list goes on and on.
Spending less than you earn is the founding block of a solid financial future and where everything else starts. If you do nothing else, spending less than you earn each month is how to get and maintain great financial health.
Saving Money For Children’s College
Having great financial health means saving money for your children’s college education so they don’t have to be burdened with large student loans when they graduate.
According to the New York Federal Reserve, Americans have borrowed over $1.23 trillion in student loan debt. And, the average college graduate in 2015 finished school with $28,077 in student loans according to US News and World Report. The average student loan debt is expected to increase by 8-10% for 2016 graduates.
Having great financial health means that you have prepared for the cost of college for your children as best as possible. You have a 529 College Savings Plan or another investment setting investing in preparation for your children’s college education.
Will little Johnny’s 529 College Savings Plan be enough? Probably not, but having great financial health means preparing and planning ahead to help our children graduate from college without a severe noose of student loan debt around their necks.
We can directly link large student loan debt to other financial issues that Millennials and their parents now find themselves facing. Student loan debt can be directly tied to the increase of Millennials leaving at home with their parents, not purchasing a home and perpetually renting, and a host of other financial decisions that impact good financial health.
The American Dream – Owning a Home
Having great financial health means saving money for a down payment and buying your own home.
The American Dream is still alive and well despite the recent market upheaval that we’ve seen throughout the past eight years. And, it should be. Buying a home is still one of the backbones of creating wealth in America.
But, that doesn’t mean that you have to buy a home right away. And, you don’t have to buy your dream home right out of college. Having good financial health also means that you understand these two things.
It’s okay to rent for a few years while saving for a down payment on a home. It’s okay to buy a starter home and work your way up. Young Americans need to get back to modest expectations when purchasing their first home and then work their way up the home ladder. That’s an attribute to what having great financial health means.
A Good Education and Good Job
Having great financial health means getting a good education and finding a good job after college that makes you happy to go to work every day – and especially on Mondays.
Having a college education is still important. It’s one of the founding blocks to good financial health.
A lot of great things stem from having a good college education. It is still possible to find a good paying job, but you need the education to do so. A college education today is like what having a high school diploma was to our parents. Now, you almost need a Master’s Degree to get ahead.
Saving for college for our children will help them have good financial health and get ahead in life. Parents need to start saving in a 529 College Savings Plan or similar investment right after their child is born. This will help keep our children out of debt and not burden by huge student loan bills when they graduate.What does good financial health mean to you? What's your definition of financial health?Click To Tweet
Having great financial health can mean different things to different people. Having great financial health means giving a better life for my children than the great life my mother gave to me. It’s paying it forward and making the world a better place through amazing offspring that are set up for success.
What about you? What does having great financial health mean to you? Is the American Dream still alive and well? Is it the same dream that you see played out across the world too?