This piece is part of my 2016–2026 archive migration. Some original formatting, content, and external links may be missing, changed, or not be optimized.
4 categories to consistently monitor
What’s Your Financial Health Status?
Investments
The sooner you can start investing, the better. I recently wrote the article, “If You’re Not Investing And You’re Past 25, WTF Are You Doing?,” which provides a close look into what happens when you start investing consistently at 25 all the way into your 60s. The sooner you start investing, the less money you will need to save, which means you will be less financially burdened throughout your life because you have to play catch up to reach your retirement goals.
Speaking of retirement…
Retirement
At some point, you’re going to want to retire; this word is implemented uniquely depending on the person. For some people, this may mean engaging in entrepreneurial work full-time and leaving their traditional full-time job or career once and for all. For others, this might mean relying on passive income streams they’ve built over the years and spending their time giving back through volunteering, charity, and non-profit work.
What does retirement look like for you? The most important thing to decide is how much money you plan to require to successfully maintain the lifestyle you desire most; always account for inflation when you think of what number will make you feel comfortable down the line.
Lastly, at what age do you want to consider yourself retired? For some, this number is 35, 55, 45, 85, 95, 105, or something else. There is no one-fits-all retirement age.
And the best part of retirement is that you can still earn income, but the goal is to earn income in the way you desire to most.
Savings
The emergency fund is the liquid savings that cover you in case you lose your income or have a legitimate emergency. Don’t make non-emergency circumstances emergencies; you’re only hurting yourself.
The recommended emergency fund should house about 6–12 months of expenses. If you own a home, live on your own, or are a full-time entrepreneur, it’s encouraged that you have a 24-month / 2-year emergency fund since you have more on the line.
The goal of the emergency fund is to create a sense of peace about your money situation. The more stocked your emergency fund, the better. Since your emergency fund will consist of a solid amount of liquid cash, invest it might make more sense to put it in a low-risk investment, so your money can be working for you 24/7.
Debt
What’s your debt load? How much negative financial weight are you carrying on your back every day that could be instead invested, saved, or put away for retirement?
Here’s another question for you…How much of your debt was not for a necessity? Examples of non-essential items include car purchases outside of your budget, mortgages and rental payments that don’t fit your budget, shopping, travel, or dining out sprees that landed on your credit card, or educational costs that could be lower.
Not all debt is bad debt, but most of the debt that Americans carry is, and even worse is that most of the debt Americans hold is optional. We choose to go into debt more often than not because we desire to live a certain lifestyle, and every lifestyle comes with a cost attached.
Can you afford your lifestyle, or do you need to downgrade it (temporarily)? It’s okay to downgrade your life temporarily, so you can create a healthier financial position for yourself.
This content is for informational purposes only — not professional advice. Consult a qualified professional before making any major decisions.