I believe one of the primary reasons for cyclical poverty (or even living paycheck-to-paycheck) is an unhealthy relationship with money, usually caused, at least partially, by impactful and formative experiences as a child. I believe the opposite to be just as true: a primary factor of generational wealth is a healthy relationship with money. There are many other contributing factors, some possibly more important than a healthy or unhealthy relationship with money, but in this article I want to focus on how to build a healthy relationship with money and how that can, potentially, help you break the cycle of living paycheck-to-paycheck.

Compare yourself to others as little as possible

It is impossible to win by comparing yourself to others financially. There will always be someone that has more money than you or a nicer house, car, or clothes. My family was not poor growing up but we certainly weren’t wealthy. When I was a kid, I wanted brand-name clothes to signal to others that we were just as well off as they were. I felt ashamed that other kids got the latest video game console for Christmas and we didn’t. I wondered why we used so many coupons at the grocery store when other families got by using none at all.

It wasn’t until I became an adult with a full-time job that I realized I was actually proud of my parents’ financial habits. We didn’t usually get the latest clothes or video games, but we always had food to eat, clean clothes to wear, and a warm bed to sleep in. I had spent my entire life, until about the age of 25, longing to have as much as everyone else. But I discovered that wasn’t nearly as important as I once thought it was. Who cares if I have name-brand clothes if I like what I’m wearing? So what if we use coupons at the grocery store? Many wealthy people love to be frugal and save money.

Resisting the urge to compare yourself to others financially is much easier said than done, but comparison can prevent you from being happy with what you have and keep you on a financial hamster wheel, always racing towards the top that you will never reach.

Teach yourself about money

My parents had no idea what a Roth IRA was or how powerful an HSA can be. I learned from them that it was important to save money (in a savings account), but not much else. I didn’t receive any formal financial education until college. When I started learning more about personal finance, my world was turned upside down. I learned that it was possible for regular people to become wealthy. I previously believed investing was just something rich people did.

Many Americans are financially illiterate, and you may be one of them – and that’s okay! It is easier than ever to educate yourself about money and learn how to actually build wealth. The Money Guy Show is a great place to educate yourself about money. No matter whether you are just trying to get out of debt and stop living paycheck-to-paycheck or are searching for advanced investing strategies beyond your run of the mill Roth IRA and 401(k), we have content to help you. The Financial Order of Operations is an incredible starting point for anyone that isn’t sure exactly what to do next. 

When it comes to educating yourself about personal finance, take a proactive approach rather than a complacent one. Approach it with an open mind. What you learned when you were younger may not be true.

Use budgeting tools to keep yourself on-track

For me, budgeting was an essential part of building a healthy relationship with money. Without a budget, I spent every single dollar I made every month. If for some reason I had money leftover at the end of the month, I would find something to spend it on. Maintaining a budget helped me realize how wasteful some of my spending was. It helped me set financial goals and earmark money for future saving and spending. I used (and still use) the popular app YNAB, which is built around the idea of giving every dollar a job right when you earn it.

This method worked very well for me. Every dollar immediately had a purpose; no more money sitting around in my bank account waiting to be spent frivolously. I reached a point where I would budget months in advance, and the money I earned in January would be assigned to budget categories for May. Rent, Roth IRA contributions, dining out, groceries, electric bills, and more would all be covered well in advance. I felt like I didn’t have much extra spending money because every dollar had a purpose. In reality, I had a substantial amount of potential spending money, but since all that money was earmarked, to me it didn’t exist.

Once budgeting and spending become second nature, you may graduate to a cash management plan, where you have the ability to save what you need to save every month without sticking to a strict budget. Personally, I still use a budget and don’t plan on stopping anytime soon. I know that I naturally spend less and save more when I am planning where every dollar goes in advance.

Give yourself permission to spend a healthy amount

When I started budgeting, I quickly learned that I would go crazy if I didn’t have some money set aside for unplanned, frivolous spending. A big part of having a healthy relationship with money is being able to spend money that you know you can afford to spend without feeling guilt or shame. People of all levels of wealth and income struggle with this.

One major reason I’ve noticed people struggle to spend money on unnecessary expenses is uncertainty about their financial habits. They don’t truly know whether they are saving enough for the future, so out of an abundance of caution, they severely restrict their spending to save even more. It is difficult to find a perfect balance, and you can quickly go from not spending enough (as crazy as that sounds) to overspending.

The key to finding a perfect balance is identifying all of your financial goals, determining what you need to do to achieve those goals, and implementing a plan that aims to account for as many “unknowns” as possible (such as investing returns, changes in income, big life events, and inflation, just to name a few). Our Know Your Number course is a good place to start thinking about those goals and what they will take to accomplish. Meeting with a fee-only financial advisor is a great next-step for those who would benefit from a second set of eyes or financial co-pilot.

A healthy relationship with money doesn’t develop overnight. If you currently believe you have an unhealthy relationship with money, it is possible to overcome prior habits and beliefs, but it takes time. As someone whose relationship with money has changed drastically over the years, and become healthier over time, I can say without a doubt that starting the work today is very much worth it and can lead you to feeling happier, more secure, and confident in your finances.

Wealth creation is surprisingly simple. You need discipline, money, and time. So why do so many Americans miss the mark when it comes to personal finance? The 10 stats in this episode are simple, real world reminders of how powerful a few small financial decisions can be. Keep these powerful stats top of mind to help you stay grounded, motivated, and on track to build wealth.

In this episode, you’ll learn:

• What decisions are actually derailing your finances (Hint: It’s not Starbucks.)
• Crucial, yet simple wealth building steps that most Americans miss
• How your career and education can impact your financial life
• How powerful your dollars are in yours 20s and 30s
• Common misconceptions about modern millionaires

Research and resources from this episode:

• The Money Guy Show Resource Page
• Survey: Fewer than 4 in 10 Americans could pay a surprise $1,000 bill from savings (Bankrate)
• New Report: How Credit Card Debt Impacts the Average American (Clever)
• Credit Card Debt in 2020: Balances Drop for the First Time in Eight Years (Experian)
• State of the Auto Finance Market Q4 2020 (Experian)
• Car Depreciation Rates (Direct Express Auto Transport)
•  Personal Saving Rate (FRED)
• A Look at the Shocking Student Loan Debt Statistics for 2021 (Student Loan Hero)
• Current Student Loan Interest Rates and How They Work (Nerd Wallet)
• Panicked universities in search of students are adding thousands of new majors (The Hechinger Report)
• Agglomeration and Job Matching among College Graduates (Federal Bank of New York)
• 70% of Rich Families Lose Their Wealth by the Second Generation (Money)
• What’s the Median Retirement Savings by Age? (Synchrony)
• Social Security Fact Sheet (SSA)

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There are specific actions that must be taken to become a millionaire; depending on your age and expected rate of return, you can determine the dollar amount you need to save each month to become a millionaire by a certain age. If you’re older or have a substantial amount already saved, you may already be a millionaire or on track to become one without saving a penny more. The actions required to become a millionaire are simple, but maintaining the discipline and mindset needed to build wealth isn’t easy. Here’s a few things to focus on throughout your wealth-building journey.

Build knowledge and discipline

No matter how much any of us know about money now, we aren’t born knowing about Roth IRAs and 401(k)s. If you are early in your financial journey, there’s no shame in spending time learning the basics. There’s a plethora of financial knowledge available for free; online there are podcasts, YouTube videos, blog posts, and forums. Your local library will have books and magazines about money available for check-out. If you have friends or family members who are good with money, they can help guide you through the early stages of building wealth. 

Once you are armed with the knowledge of how to build wealth (remember, it may seem simple, but it isn’t easy), the next step is to put that knowledge into action and start building good financial habits. Follow the Financial Order of Operations; work towards making sure your risks are appropriately covered and you are saving what you should be saving for retirement. Don’t subject something as important as saving for retirement to human error; automate your retirement account contributions. After a while, it will become second nature.

Avoid distractions

It is never easy to save a substantial portion of your income for retirement. There are always other, seemingly more pressing expenditures in your financial life. In your 20s, it’s easy to avoid saving for retirement since you’re probably saving for a car, college, or once-in-a-lifetime trips. Once you reach your 30s, your monthly budget will be dominated by kids, a family, and perhaps a house. The point is there’s never an easy time to start saving; our wants are unlimited but our resources are limited. You must prioritize saving for retirement and work towards reaching that target 20% to 25% savings rate as soon as you can. No matter your income, sacrifices must be made to save money for retirement, but your future self will thank you for every dollar you are able to save now.

Stay the course

In addition to ordinary life events that can distract you from saving, there are certain financial events that could derail your financial journey. A solid financial plan should be able to withstand almost anything that is thrown at it: job loss, recession, or unexpected financial loss. Uncertainty is scary, especially when uncertainty exists around your financial future, but staying the course will be rewarding in the long-term. 

When you experience the first sharp decline in your investment portfolio (you may have experienced this earlier this year), you’ll likely be tempted to take action and do something about it. Standing by and doing nothing while your portfolio declines 20% or 30% can make you feel helpless, but it may be the best thing to do long-term. Divesting from the stock market when it reaches a bottom is about the worst thing you can do. When you get back into the market, you’ll likely be buying in at a higher price and have missed out on the recovery.

Don’t forget what you’re saving for

Becoming a millionaire just to say you are a millionaire will not be fulfilling or satisfying. Always keep in mind what you’re saving for; it will be a powerful motivating tool as you’re building wealth. Early retirees always know what they are retiring from, but don’t as often know what they are retiring to. Don’t be afraid to dream big when planning out your future financial goals and milestones, and know what you are saving for.

Who wouldn’t want to be a millionaire? Everyone strives for financial success, but achieving long-term, fulfilling wealth is often elusive. Learn exactly how much you need to save to become a millionaire, by age, and the behaviors and habits you need to build along the way. Watch our latest show on YouTube below.

Hardship is, unfortunately, a part of life. Whether it’s an economic downturn, losing a job, or the loss of a loved one, how we handle these situations can change our lives forever.

We know the gravity of what it’s like to be hit with adversity. Even though we tackle some serious subjects in this episode, Brian wanted to title it “Victory from the Jaws of Defeat!” Let’s talk through personal stories and tried-and-true strategies for persevering through a negative situation and coming out stronger on the other side.

Research and resources from this episode:

• 5 Steps to Becoming a Millionaire (The Money Guy Show)
• Frequently Asked Questions About Small Business 2018 (SBA)

Enjoy the Show?

• Get FREE downloads full of financial advice from our Resource Page!
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If you have any questions (or just want to say hi!), join the conversation on Facebook, Twitter, or Instagram!

Everyone has financial dreams and goals they would like to achieve. Every year, without fail, the topic of personal finance shows up in the Top 5 most popular New Year’s Resolutions list. So how can you make your financial dreams a reality?

In this episode, we’re going to walk you through 4 vital financial areas to add to your goals and then, teach you how to make them stick!

In this episode, you’ll learn:

• 3 estate planning mistakes to avoid
• How to skyrocket your investments in the new year
• How to pay less taxes (without going to jail ?)
• One simple change that will keep your financial goals on track

Research and resources from today’s episode:

• Intern Daniel’s Blog: “How to Build Good Habits (and Keep Them)”
• 10 Top New Year’s Resolutions for Success and Happiness in 2019 (Inc.com)

Enjoy the Show?

• Get FREE downloads full of financial advice from our Resource Page!
• Subscribe on YouTube or wherever you listen to podcasts.
• Leave us a review on Apple Podcasts.
• Send us your questions or share your story.

If you have any questions (or just want to say hi!), join the conversation on Facebook, Twitter, or Instagram!

Everything you know about money is probably wrong and holding you back from success in your financial life! Well, today that will change. In this episode of the Money Guy Show, we are going to straighten it all out for you.

You have to be very aware of how your thoughts impact your behavior with money. How you think and feel often drives action. We truly are living in the age where we have 24/7 access to information. However, is having the ease of access to so much information helpful when it comes to making sound financial decisions? We’re not always convinced it is.

You want enough information to inoculate yourself against financial missteps, but not so much that it actually leads to behaviors that undermine your success with money. It is imperative for you to understand what is actionable – the good news versus what is minutiae and noise that can sidetrack you into making horrible decisions. Fasten your seat belts as we jump into this week’s episode of The Money Guy Show!

Here’s What You’ll Find Out in this Episode:

• The influencers that shape your inner voice
• Biases and blind spots that can affect your decision making
• How you can prepare a path to move forward in your life
• The origins of The Money Guy Show
• How to become an optimist
• What the correlation is between losing weight and building wealth
• The importance of writing down your goals
• How to understand what drives you in your life
• Why it is important to have a good support structure with accountability
• What does the concepts of Limiting Beliefs vs Liberating Truths mean
• Why Nike’s slogan is applicable to all of our lives
• What tools are available to you to “just do it” in your financial life
• The crazy risks to avoid when taking the leap of “just do it”

Resources Mentioned in this Episode & Related Episodes

• If It Bleeds, It Leads: Understanding Fear-Based Media
• How I Became The Fresh Prince of Bel-Air
• Episode #1 of The Money Guy Show
• David and Goliath: Underdogs, Misfits, and the Art of Battling Giants
• Outliers: The Story of Success

Enjoy the Show?

• Make sure you subscribe so you get updates, announcements, and exclusive post-show deliverables!
• Leave us a review on iTunes
• Send us your questions or share your story!
• You can also use #AskTheMoneyGuy on social media!
• Get your FREE copy of The 30-Minute(ish) Financial Plan

Tune In and Go Beyond Common Sense with the Money Guys

This show would not be what it is today without the support of our wonderful listeners. We strive to continue making the show better and your feedback is an important part of that process.

If you have any questions/suggestions/comments/concerns (or just want to say hi!), feel free to reach out to us: brian@moneyguy.com and bo@moneyguy.com. You can also join the conversation on Facebook or connect on Twitter @MoneyGuyPodcast.

If you enjoyed this episode, be sure to join our community! You’ll never miss special announcements and offers, plus you’ll get future podcasts and blog posts delivered straight to your inbox so you can get in on the action right away.

Are you on the road to reaching your full wealth potential? If you’re listening to this financial show, chances are you’re way ahead of the curve when it comes to building wealth. But it never hurts to double-check your progress every once in awhile to make sure you’re continuing to take the right steps to achieve financial independence.

In this week’s episode of The Money Guy Show, we share the wealth-building habits by age that can put you on the path to Millionaire status. Tune in to find out how to dial-in your money mindset in each decade of your life, and what financial matters you should be most focused on as you progress through the years.

Tune in to this week’s installment of The Money Guy Show and find out:

• Where you should be financially in your age group to reach Millionaire status by retirement
• The minimum amount of money you should be saving in each decade of your life
• The wealth-building potential of your money when you save at certain levels in the different stages of life
• The most valuable wealth-building habits when you’re in your 20s, 30s, 40s, and 50s
• What can hinder your financial success in each decade
• How to avoid the midlife crisis
• How much money you could accumulate with your savings at the different decades of your life
• What it looks like to be a Prodigious Accumulator of Wealth (PAW)
• What can impact your ability to reach your financial goals that have nothing to do with finance
• The importance of saying, “Thank you” and being generous

Resources and References Mentioned in this Episode

• The Average Salary By Age (SmartAsset according to Bureau of Labor Statistics)
• Why Millionaires Don’t Feel Rich (Study by Spectrem Group, cited by Investopedia)
• The Zombie Effect: How to Avoid the Walking Debt
• The Definition of Wealth: Things to Think About at Every Age & Stage of Life
• The Truth About Keeping Up With The Joneses

Tune In and Go Beyond Common Sense with the Money Guys

This show would not be what it is today without the support of our wonderful listeners. We strive to continue making the show better and your feedback is an important part of that process.

If you have any questions/suggestions/comments/concerns (or just want to say hi!), feel free to reach out to us: brian@moneyguy.com and bo@moneyguy.com. You can also join the conversation on Facebook or connect on Twitter @MoneyGuyPodcast.

If you enjoyed this episode,

If you’re a faithful listener of The Money Guy Show, you’re probably all about setting goals. We love the process behind creating a plan to achieve your goals, as it forces you to think about the future. It also fosters being more intentional with your time and money.

However, it’s possible to get a little too ambitious when it comes to achieving your goals. It’s important to remember that life is a marathon and not a sprint. While it might seem like you’re not making much progress in the present, you’re probably much further ahead of where you were a year ago.

The key to success with any goal in life is consistency, not speed. If you think you’re at risk of burning out on your financial goals, here are a few ways you can scale back.

Take Your Progress Into Account

If you’re a perfectionist, or hold yourself up to impossibly high standards, take stock of your overall situation. How have things improved since you got serious about your goals in life? Where were you two years ago? A year ago? Six months ago?

We’re often guilty of getting too caught up in the present, or too involved with thinking about where we hope to go and where we want to be. That’s not good. It’s important to be happy with the progress you’ve made — you deserve some credit for making improvements!

This is definitely a balancing act. You don’t want to be content to the point you become complacent. If you’re an overachiever, this likely won’t apply to you, but keep it in mind when trying to scale back.

Put One Foot in Front of the Other

Again, achieving your goals is like running a marathon You’re not trying to exert all your energy in one shot only to die off after crossing the finish line.

The journey matters. To enjoy it, put one foot in front of the other carefully so as to avoid tripping!

Being intentional with the path you want to take is key. Of course, things can change over time, and you need to learn to adapt. Getting off track temporarily, or having a “slow season” is perfectly okay (and normal). However, you shouldn’t find yourself so overwhelmed that you stop and freeze in panic.

Mapping out your goals and the things you need to do to reach them will help you develop a guideline to follow so you don’t try to get ahead of yourself.

Stop Comparing Yourself to Others

We know you’re guilty of it. Everyone is! If you’re working on the same goal as your friend or coworker, you might find it all too easy to compare your progress against theirs.

But everyone needs to work at their own pace. Just because they’re “doing better” than you are doesn’t make you a failure.

Comparison can be a difficult hurdle to get over, especially if you and your friend or coworker are competitive. Try letting it go and settle for friendly competition. Turn that jealousy into motivation, and support each other’s efforts. If your buddy isn’t cooperative, take the high road. You don’t need the negativity.

There’s no reason to beat yourself up about being the tortoise rather than the hare. Remember who wins in the end!

Shift Your Focus to the Big Picture

We often get caught up in the little details of our goals and lose sight of the entire reason we set them to begin with. The good news? All it takes is a little bit of reflection on your part to get that reason back front and center.

Say your goal is to make enough money on the side, so you’ll eventually be able to leave your job and run your own business. You’ve been working hard, increasing your income month after month. However, you’re now realizing just how much you can make by working your job and your side job, and your focus changes. You’re only looking at what you could earn — and not what you could build in your life by .

Unless your goal is to get out of debt or accelerate your savings, stick with your original goal of being able to quit your day job so you can achieve your goal of building a business. How much money do you need to earn to get there? Are you already there, or will you be there in a few months? Evaluate your progress thus far against what you originally set out to accomplish.

Do yourself a favor — whenever you make a new goal from here on out, always attach a reason “why” to it. You can go back to this reason when you’re feeling overwhelmed, lost, or distracted by things along the way.

Avoid Burning Out by Taking it Slow

You might be wondering what’s so bad about being gung-ho about your goals. In theory, being super motivated is great. But no one can sustain that level of enthusiasm – at least not healthily. Working toward goals can be emotionally, physically, and mentally draining.

Getting to the point of burning out is dangerous for a number of reasons. If you’re putting yourself under so much stress you’re losing sleep, not able to focus on anything else, or are neglecting your personal relationships, you’re going to have a problem sooner or later.

Besides, burning out could cause all your motivation to vanish at some point. If you’re passionate about something, that’s great — and you don’t want to lose that passion because of impatience. Don’t be afraid to progress slowly and steadily.

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