#242 - Celebrating Financial Independence

Welcome to the Money boss parent podcast. I am Anna Sergunina your host, and today I have a special episode in honor of Fourth of July. As we celebrate our nation's independence, we'll be exploring the concept of financial independence. What it really means how can you achieve it? And why is it essential for you and your family? I want to go down memory lane a little bit here with you. Just like our forefathers broke free from constraints of British rule to forge a path to freedom and prosperity, we too can break free from financial constraints and build a secure and prosperous future. In this episode, we draw parallels between historical milestones and personal finance, offering practical advice to help you celebrate your own financial independence day. I want to cover historical context of this financial independence, the key steps for you to achieve it tips on teaching your kids about money, which you know, I'm very passionate about, and ways we can celebrate our financial wins. So let's dive in and start this journey toward our own financial freedom. Happy Fourth of July, my friends, and welcome to the Money Boss, Parent podcast. Hey, money boss, parents. So let's dive in. I wanted to do something different for you today. And really just connect the dots of us achieving our own financial independence with the celebration that we all are excited every year to get together with our families and have fun, and that is the fourth of July. So I want to celebrate our financial independence as we are still working and saving and building our own life. So let's kind of go down a little bit, the historical memory lane to try to draw parallels between how I sort of see this idea of looking at what has happened in our country? And how that could be viewed as a parallel of what is happening in our personal finances? And what lessons can we learn from that? So as these are my own interpretations, by the way, so I welcome your comments and thoughts on all of this too. As we look at Fourth of July, as a mark for Americans, America's so like the country independence from British rule. And we parallel that with achieving our own personal independence. And this is really should be thought a little more about how do we define that for us? What personal milestones can we put on our financial plan to help us kind of get to that big, big day? So I look at this holiday as celebrations for self resilence of our nation of our country. But but then when we think about our personal finances? How does that? How does that help us become more self resilient, so that we can start to recognize the progress and celebrate what we've actually achieved? If you think back about the colonies that were formed, initially, right, the 13th couple colonies, and their idea of personal liberation and how they wanted to achieve freedom, right to make their own decisions, their the to be free to move around and do all of these things. How did when you think about your own personal finances, and as we're are now living in a completely different time, right? The Declaration of Independence was adopted on July 4 1776. That is a long time ago. So I just I was just really genuinely interested to kind of see like, how does that help us kind of see this path of what where are we today and how we can learn from the steps and achievements of our forefathers. So I want to emphasize the empowerment that comes from this financial freedom that we're achieving. And also, I want to talk about like, how do we find the financial independence that help us get to this resilence so that we can make decisions about our finances in any way we want, reach our goals, and move forward. So let's look at a couple interesting economical air air marks right or maybe like markers on the on the timeline where some of these financial developments slash economical help us kind of put the world we know today in finances, and so I wanted to think about that. back to early 1900s. One of the things that we highlight for our clients in discussion of personal finances is making sure if they have savings account, make sure that you have your accounts in the safe banks, right, or banks that belong to a Federal Reserve or provide FDIC insurance. So interesting fact. So Federal Reserve was established by Federal Reserve Act in 1913. And it was set up to create a central banking system so that it could provide a safer, more flexible and stable monetary in financial system. So as you are you and I are enjoying the fruits of that establishment. We now have FDIC insurance on our deposits or savings accounts, CDs, to make sure that if something happens to the actual banking institution, that our monies is safe, so like, the purpose of it was to provide this, the system and structure. So I kind of want to relate this back to how having our own wealth structure financial plan, much like the one the role that the Federal Reserve was trying to set up right in 1913. It can, the plan itself can provide the stability, in times of like a crisis or a situation or life changing life events. This is one of the interesting things that I've observed in my career as a financial planner is a lot of our lives are not static, a lot of things are happening moving, good or bad, right? Like it's not even the point here. But like having a mechanism in place or a plan or at roadmap I really love calling them financial roadmaps, helps to see what you can do, how you can make decisions, how do you go through an emergency? What, how do you use your money as a tool to help you weather those downturns. So that's kind of like my connection of a federal creation of a Federal Reserve System, and creation of our personal finances. Now, going down further, the Great Depression, error and nine, the early 1930s. So if you all remember the economic collapse, and the Great Depression began, when the stock market crashed in 1929, which led to a really widespread unemployment, poverty, economic stagnation, businesses closed. So it really shook us economy, it created a lot of a lot of a lot of it's like a catastrophic event, per se, in our economic financial system. So I want you to think about how do we today, right, and I know a lot has came out of that. But how do we today, weather, similar situations in our personal finances, and the one thing that comes to mind is your emergency fund. So like if we can compare what happened when our country went through through depression, right. And when President Frank Franklin Roosevelt created a new deal, which introduced a series of programs, and like different projects, to help and reforms to help get back the country on its feet, like the Social Security Act, this is when Social Security started. And like regardless of whether there was an economical crash, you could get a pension. This is also the time when SEC or what's called Securities and Exchange Commission was started and also that FDIC insurance was created the Federal Deposit Insurance Corporation. So how those historical moments help us think of our personal finances. So emergency fund, I mentioned this already, but emergency fund provides like that personal safety to ensure that we can weather any kind of situation. So if anything, I want to remind you like where are you with your emergency fund?

A couple of interesting facts here too, like what happened after World War Two? How the rise of middle class this is when it's like this. This was a period where we saw a really big growth of strong middle class this is when people started to be interested in homeownership, right. And this idea of an American dream was born and living higher standards, right? They the neighborhoods were starting to be built. Also for my military folks, this is where the GI Bill was created, which provided benefits for all the veterans who are returning from the war, to be able to provide for their families and send them to college and so played a really significant role in this growth. also, like, during that time, like the investment in savings started to gain more stability as consumers understood how you know how these pieces were coming together, right? They had the opportunity to spend money, save and also invest. So people were buying homes right there, what could buy cars, they, they, they there were experiencing freedom and economic surplus to be able to live their lives and expense. So paralleling that to personal finances would be like, how is our personal financial health right now? They cow where whatever it is that you're going through? Maybe it's a situation that you're recovering from maybe that that emergency fund that I mentioned, kind of go ghosts in hand and help to help you. But how do you how are you weathering that storm? And you coming out with the right mindset, right? Having having proper savings goals? Looking at where are you actually spending money? How are you spending? So it's like, looking at where are you right now, for your personal financial health. A different era is like when we start to talk about the stock market. And I know this is like a topic that we can spend a whole lot of discussion on, but I just want to kind of highlight that, like that time in our history helped us, you know, kind of develop a place, right where we can start to be real investors, right? So interesting fact, New York Stock Exchange, and yc was formed in knight in 1792. So if Declaration of Independence was adopted in 1776, that's like, almost 18 years or so later. And so just to kind of given the context of what happened there, lots of different things happens, right? The creation of the stock exchange, and you know, all the different ups and downs and the most recent, you remember the COVID years, right? But that's that platform provided for businesses, to be able to raise money to grow and also provide you the investors the opportunity to grow your finances, invest, and diversify your money. And also, like, provide all kinds of opportunities for people to have jobs, careers and so forth. As we have into 2000s. This is where like, the technology and financial things happen, right? So how like, remember, the 2000, the y k, where we were thinking that was the end of the world, but then as internet grew, and we had more access to mobile technology, and all of the all of the financial system started to be changed. Rivershore alized, right. Online Banking, mobile apps, fintech. So like, all kinds of things, if you look at your phone, what do you not have on your phone, it's like a computer that you carry with you, you can do anything on it. Investing, right saving, moving money around paying bills, you name it, it exists, right there also, like the big part that I'm really excited about is the financial education. I remember even 20 years ago, when I started in this space, like what existed was not what we have today. So all the educational tools, the apps that we have ways that we manage our finances, nobody balance his checkbook anymore, because we have this at the tips of our fingers. So how this technology and the you know, what we went through as a country as a nation helped us be more streamlined, users be more practical, and how we manage our finances? And so what is it going to look like in the next decade or two? Right How as as we're now entering the next era, I heard this actually interesting. analogy on the podcast today, a recording for another podcast. But a speaker was kind of emphasizing that we had this Internet growth and development right and late 90s, early 2000s We're kind of going through the same phase right now with all the AI and how it's changing how we how we work, how businesses are structured, how our jobs are done, and so forth. So I want you to think about that, because I feel like it's a really exciting era that we're in. I found a few interesting quotes for your inspiration just to compare like the history and, and a little bit of personal finances here. A Benjamin Franklin said that an investment in knowledge pays the best interest. So Just a reminder, keep on reading, keep on learning, keep on listening, anything that you can pick up and get yourself educated and personal finances is going to pay best interest for you in the future. Thomas Jefferson said, Never spend your money before you earn it. So that's, for some of you, that's a rule that you may live by others are more open to have debt, be able to manage that. operate with debt, grow your net worth with debt, grow businesses and use it wisely. But for others, that may be a rule that they need to, to stick to. And Martha loader, Luther King Jr. said that time is always right, to do what is right. So if there's anything that you sitting on right now, there's an action that you need to take, whether it's saved, starting to save more for your financial goals, or looking at your budget, paying more towards your debt, just kind of think about that, and use that as an encouragement for you to take those next steps, I thought you would enjoy this part is like finding a little bit of history and making the parallel to your personal finances. I want to cover two other sections here where I kind of wanted to emphasize where I feel like we as consumers today can start to take steps toward that financial independence. And I know these are big words, but I want to kind of just come down to our everyday life and think of like, what can we do today, that if we haven't gone to review our finances, maybe it's looking at your spending and like how and where things are, I know this is like the topic that many of you like to avoid. But why why continue putting your head in the sand when you can be when you can put systems this is like the the beauty of where the times that we live in where you can have systems in place apps and and tools that help you actually stay on top of it. So I just a reminder, I didn't want to spoil your Fourth of July celebration that maybe you can do this later. But take a look at where you stand as far as your expenses and your income saving. We talked about our emergency fund already. But how do we make sure that we stay on top of of that if we need to grow it to a certain amount three to six months is the most typical place to aim for also, high yield savings accounts, I cannot stop talking about those because interest rates are still high where we are today. And so even as as boring is like three months worth of expenses emergency fund, you could be making money on that money. So my friends, I just want to remind you make sure that you are not for going simple steps like that, I will include in the show notes, a link for you to download my top five paying high yield savings accounts that you can open up today free of cost and you can start earning close to 5% interest. So don't let that emergency fund just sit around and do nothing for you. Also, we don't talk about this a lot on this podcast. And we should actually I'm just getting more ideas as I kind of go through my outline of thoughts for today. But investing so when was the last time you actually looked at your portfolio? Is your portfolio still on target with all of the structures that you set up? How is your allocation? If you're set target allocation, stocks versus bonds to for example, be 70%? Stocks, 30% bonds?

Where is it today? The market has done wonders for us in the last couple of years. So things might have gotten out of whack. Where do you stand today? The question I'm asking you today is to just take a look, maybe you need more help and assistance in evaluating that. But I want you to benefit from this from this growth and the compound effect of how this could help us get closer to that financial independence. And also last point here is if you're working toward paying debts, and you know have put together plans, for example, like you pay an extra every month to eliminate that debt, whether it's like the snowball method or avalanche where maybe you're paying the debts that are higher in interest first versus higher and balance. Keep on doing that. Avoid adding more right to to kind of help you stay the course. So I feel like these basic things that we always need to be reminded off and revisited. help you stay the course because at the end of the day, the best way that you're going to measure your financial independence. Your success is whether you've lived a life that you're proud of and whether or not you've achieved your financial goal. In these things as boring as they might be for some of you, those are the things that help you stay the course. Now, excuse me. Now one other area that I am really passionate about is making sure that we teach our kids about money. This is like one of the topics that I'm growing more and more interested in is because I guess my son is growing. But also just really, as a parent, this is our job to raise money smart individuals. So what kind of system do you have for your kids? Are you guys teaching them basic money skills, just like what we talked about for us? But do you have an allowance system in place? I am starting to use Save spend jar with my son. So what are you implementing basic budgeting skills for kids to they need to understand how money moves where it comes from, maybe it's time to start charging them a little bit of, you know, expenses, rent, groceries, costs and things like that. Also making fun money games, right? There's games like kids monopoly that start to stimulate this money management idea. We started actually to play kids monopoly this year with Liam. And it's been a really interesting experience. And he loves it. He's still at the beginning, he was like, getting very upset and even cried when he started to get low on cash. And he was like, Well, I spent all my cash buying these properties. And so in his little mind, he was like, I am winning, when I have more more money, right? Or more cat, my cat, my cash pile was bigger versus no, you need to think structured strategically here and like invest in all of these properties, because then it starts to generate more money for you. So it took a few games, for us to kind of go through this idea. You're not losing, but you really are, you know, winning in the long run. So interesting how it all kind of evolves. But I love that a lot. So like these hands on practical experiences, books, I was reading, just recently, like I have a pile of kids books that I keep coming back. One is, Larry, the bunny saves the money. Like it's a really simple concept of like using carrots as measuring sticks to pay the taxes to save the money, and so forth. So whatever it is that you're doing, like keep coming back giving specific targeted goals to kids like this. One is, I need to start to developing that a little more in my family, but like, just like we have savings goals for ourselves. What about our kids? Why not give them a savings goal? If you have an allowance system? Or if you paying for chores? What are they doing with the money just just because they're putting it in those little jars? If you have that system, right? Or they're putting it in their savings bank, piggy bank, or if they have a savings account? So like, what's the goal, letting them learn how that works? Now, I feel like it's gonna be really, really good. Developing like that, you know, smart mindset around money. Some of you are real business, business and intrapreneurial kind of spirited, folks. So maybe you have ideas of like, things you can do with kids. We've been entertaining the idea of starting a lemonade stand. So like, what can you do with your kids to start to introduce these ideas in their heads, how they can learn money, skills, how they can earn money, too. So those are some of my top of the mind things that I'm sort of swimming in, practicing, working, talking to other parents, but like, this is the topic that we have to constantly revisit. It can't just be us working in and putting all of the money away. I know, I know you're doing that. And that's fantastic. But we need to be focusing on this least but not last, but not least, is I want since this is kind of like the celebratory discussion today, I want to remind you to celebrate your financial wins like this is this has been really helpful for me personally and professionally. It's just like, pause and give some time to reflect. I know we don't do that a lot. But what one of the things that helps you mentally and you know, practically also see your achievements is it if you give yourself time to analyze in say, not what you didn't accomplish. But what you actually did, there's a book that I highly recommend for you to check out. It's called the gap in the game. And so I mean, the concept is simple, but it's like, not what you didn't get, but rather what you actually achieved. So, but we need time, we need space, we need moments where we can look at all of this and that's where like starting with what are your goals? goals, what are you trying to accomplish, whether it's paying off your debts, maybe there's a vacation that you're saving for, or you know, anything else saving for your children's education, your own retirement and so forth, our short term goals, midterm goals and long term goals. So I want you to start having regular celebration moments for that. I know many of you who've been here for a while and listening to this podcast, I talked about my money, date, ideas and how I continue having conversations with my my significant other about kind of like where we are, I feel like this could be a good addition to your, you know, celebration, ideas or tools is to have those discussions it should be, it could be something very simple and innocent. Also, as your kids are growing, and you starting to have starting to introduce all these financial concepts for them, maybe it's time to have family financial meetings, where you are discussing and celebrating your progress with the kids involved. So actually, this is a good reminder for us to, for my family, your and I Liam is to start to kind of have more of those discussions together. I am of a belief that in you know, everybody has different values and beliefs and how they want to raise their kids. But I am of a belief that in the family, there is an of course, there, there shouldn't be any secrets in terms of like, you know, where you know how finances operated, where it works, it doesn't mean that you have to lay out all your financial plan and show everything to your kids. But the more open you are, the more conversations you can have, the more the more opportunities you have to educate your kids. And maybe this is me speaking from personal experience, because I didn't have that growing up. But I feel like that door from me, my mind is very open. So I suggest that you try that as well. Last but not least, here is I personally use a gratitude journal just to kind of help me look at life from a lens of like, what what is my gain versus what what is my gap? So I think the same could be applied for personal finances. So

keeping a gratitude journal that is focused on your financial achievements, if positive money habits because we tend to beat up ourselves about, oh, we spend too much money or we didn't save enough for all of those things. How about you look at this from a positive lens. And then last, give yourself a reward my friends, whatever it is, achieve your goal first, right? Like, no, you know, don't just reward yourself because just because, but tie it to something that you work for hard, right you have progress that you tracking, and and take time to celebrate. So as we're closing on this episode here, hopefully you had fun listening for my parallels and comparisons of like the hill oil history of Fourth of July and how I kind of am excited about that day in terms of our personal finances, but I do want your my friends, for you to feel excited, energized and use these tools to help you achieve your own financial independence. So however you are spending your holiday weekend this year with friends, friends and family remember that it is in your control of how all of these things unfold and I'm here to give you tools ideas and suggestions. So if you found this episode useful shared with a friend or family member, don't forget to leave me a review. If you're new here. I always love to get your comments and feedback and until next time, remember you are the bosses of your own money.