top of page

Self-Improvement September | 5 Foundations of Financial Health

When you build a home, you begin with the foundation. The same is true when you acquire new knowledge & learn new skills. There’s a wealth of fun and complex financial concepts to explore over the course of your financial wellness journey, but these 5 pillars will be your guide no matter which money goal you’re pursuing!



It turns out, math really is useful in the real world! No, you might not need high school calculus skills anytime soon, but the math you learned in elementary school will be worth gold if you consistently apply it to your fiscal matters! For starters, you’ll want to use your number crunching superpowers to calculate your Net Worth & develop your monthly Spending Plan (budget).

Net Worth

What is it, and do I even have one?

The answer to the latter is YES everyone has a net worth! The answer to the former is a simple mathematical calculation. First, add up the value of all your ASSETS, the things you own (house, vehicles, checking & savings account balances, investment portfolio balances, collectibles, etc.). Next, add up the balances of all your LIABILITIES, the things you owe (mortgage, vehicle loans, student loans, credit cards, medical bills, other loans, etc.). Then, subtract the total of your Liabilities from the total of your Assets and you’ll arrive at either a positive or negative figure. This is your NET WORTH.

For many people just beginning, this number can be shocking, disappointing, or a bit hard to process; AND it’s important to know the truth about where you’re starting from so that you can develop an effective plan to get where you want/need to be. If this is you, take a deep breath, sit with those feelings momentarily, and then breathe them out; accepting that you can’t change your past decisions, but you absolutely can decide today to change your future.

Once you start consistently tracking this number as part of your path towards financial wellness, you’ll be encouraged and motivated as you watch it grow (in a positive direction) over time and see just how far you’ve come! Now it's time to take action! Unleash your inner math nerd, breakout your calculator, and start crunching your numbers!

Spending Plan

“Behind every achieved goal, is a purposefully executed plan.” – Coach Amber, Purpose Collaborative

After you’ve calculated your Net Worth, you’ll spend some time identifying and defining your short-term and long-term goals. Goals are great, but I’ll never take my first trip to Greece if I don’t make a plan for how to get there! Same goes for your money goals. Your financial ambitions are worth accomplishing; developing and executing a SPENDING PLAN is how you’ll get there!

So, call on those math skills once again and start with the basics of budgeting. If you need a budget worksheet, you can find one here. Your budget needs to begin with adding up your monthly INCOME, your total household take home pay. Remember, there may be more sources of income than just your employment salary/wage.

Common sources of income include:

  • Salaries/wages

  • Bonuses

  • Tips

  • Child support

  • Alimony

  • Disability benefits

  • Retirement income

  • Social security

  • Interest/dividends

  • Rents/royalties

Now that you know what’s coming in, it’s time to project your EXPENSES. Always be sure to prioritize your basic survival expenses first (food, housing, utilities, and transportation). When creating your spending plan, you’ll also want to distinguish between fixed expenses, variable expenses, debts, and financial goals, usually planning for them in that order.

Fixed Expenses are those that tend to have predictable due dates, are not easily changed, and whose costs include:

  • Mortgage/Rent

  • Utilities (water, electricity, heat, trash, internet, phone, cable)

  • Insurances (life, health, auto, renters/homeowners)

  • Giving/Tithe

  • Savings

  • Retirement contributions

  • College savings

Variable Expenses are those spending categories whose costs tend to fluctuate and require estimation, due dates are irregular, or their occurrence is sporadic:

  • Transportation costs (gas, maintenance)

  • Food/Groceries

  • Prescriptions/vitamins

  • Home maintenance/supplies

  • Clothing

  • Grooming/beauty

  • Entertainment

  • Gifts

  • Child-care

Debts are those expenses that may be a mix of fixed and variable costs, but should be listed separately so that targeted debt-payoff strategies can be applied easily to eliminate these expenses from our budget and our lives:

  • Student Loans

  • Vehicle Loans

  • Credit Cards

  • Medical Debts

  • Personal Loans

  • Collection accounts

  • Back Taxes/Penalties

When you’ve finished making your projections, subtract your expenses from your income. If there’s a positive balance, allocate that surplus to your money goals. If there’s a negative balance, go back and figure out where to make adjustments until there’s a zero balance. Now that you have a clearly written budget, evaluate your planned spending and determine if it aligns with your FINANCIAL GOALS and values. Find ways to reduce spending in areas that aren't in alignment and increase what you allocate towards the areas that are.

Financial Goals are those budget items that we are purposefully pursuing at the present time, they are likely already listed elsewhere in the above lists, and surplus funds are added as much as possible:

  • Debt Payoff Strategies (debt snowball)

  • Emergency Fund Savings (starter or fully-funded)

  • Other Savings Goals (home purchase, vehicle purchase, vacations, etc.)

  • Retirement Contributions

  • College Savings

  • Mortgage Payoff

  • Outrageous Generosity

To execute your spending plan with purpose, you must be an active participant by regularly TRACKING TRANSACTIONS. You can do this in a variety of ways from keeping a written log, downloading your bank transactions to a spreadsheet, or using a web/app-based budgeting platform. Pick whichever method you like best.

Now that we’ve handled the math, let’s tackle that mindset and COMMIT to your spending plan! At the end of the first month, assess the outcome. Don’t be discouraged if things didn’t go perfectly. Adjust where needed and try again. It typically takes at least three months to really get in your budgeting groove!



"Personal Finance is 80% behavior and only 20% head knowledge." – Dave Ramsey

It's true, you can know all the math there is to know, but knowing what to do is not the same as doing it. And when it comes to Personal Finance, it really is Personal. That's because managing money isn't about math, it's about psychology. The relationship we have with money is a unique and complex one, shaped and impacted by our own personal life experiences, which we often use to drive our financial decisions far more frequently than we use mathematical logic. That means, if you're going to achieve financial wellness, it's time to take charge of your thoughts, beliefs, and behaviors with money!

Avoid Lifestyle Creep

Yay! You worked hard & earned a pay raise! So where did it all go?

For too many people, having more money to spend inevitably means spending more money. Over the typical working lifespan, we can expect our careers to advance & our salaries to increase, giving rise to the often experienced cyclical phenomenon known as LIFESTYLE CREEP; where one’s standard of living improves & expenditures formerly deemed “luxuries” gets relabeled as a “necessities”. The creep usually starts small but snowballs quickly as purchases become habitually more frequent & extravagant.

Examples of Lifestyle Creep