Establishing your financial identity… what does it mean?
“I’d rather strive to be anonymously rich rather than deceptively poor….”
Simply put, it revolves around having a financial plan. It’s just deciding what type of person (or couple) you want to be when it comes to how you spend/save/invest money.
Sure we all want to save & invest, but trying to do so without a financial identity won’t work for long.
For my wife & I, our financial identity is to live well below our means as a financially conservative couple in regard to the everyday stuff.
Meaning, we will probably always drive a car for 7-10 years, eat out a max of 1-2 days a week, max out our 401Ks and Roth IRAs, not exchange big ticket gifts out of obligation, never pay full price for clothes (Marshalls, TJ Max & Nordstrom Rack really has some gems!), coupon, have limited designer brands, have no cable (Sling TV, Netflix, etc), and do a lot of free activities.
Now by no means am I saying don’t live life and enjoy the fruits of your labor. It’s your money, use it how you choose. We just choose to allocate our money differently than most, and still have a good time (and a healthy portfolio) while doing it!
So where do we splurge?
Trips and nice meals when we choose to go out. That’s really it, and that works for us.
Now I know that is not a plan everyone would subscribe too and that’s fine. What you have to do is take a look into the future, decide who you want to be, how you want to live, then start planning and set a budget that works for you.
No one becomes financially secure overnight, but you must start somewhere.
So why not start today?