This is a guest blog from Green Business Network member Longwave Financial.
Now that the seemingly endless summer days are almost behind us, it’s a perfect time to shift attention from beach days, concerts, and (vegan) BBQ’s to a different kind of adventure: your lifelong financial journey. Like many people in their 20’s and 30’s, I find myself having to strike a balance all the time – there’s personal life and goals, career progression and navigating wants versus needs. It can feel like everything everywhere all at once and the struggle is prioritizing without compromising your joy or your principles.
Personally, this was truly a summer to remember – in a span of a few short weeks, I got engaged, moved to a new town, and even got a puppy. My partner and I cherished every moment yet each decision came with a lot of inner debate and what we want, what we can afford and how that impacts the short term and long term. Making big choices means seeing things in context and understanding the whole financial picture. Since so many of us in this age group are facing similar situations, I wanted to share a framework for thinking about your financial life.
With the turn of the season, holiday spending on the horizon and “new year, new me” coming sooner than we think, it’s a great time to revisit our financial pictures. Whether you’re just starting to dip your toes into the stock market or have been investing for a while, a financial checkup can help you stay on track and make good decisions with your money. We’ll dive into some key areas for your financial wellness, such as budgeting, saving, and managing debt, while staying true to your values and making a positive impact on the world.
1. Identify your goals:
The first step of investing is to think about what you’re investing for. After all, you don’t get into your EV without knowing your destination, right? The same goes for investing. Consider your goals across different timeframes: short-term (1-3 years), medium-term (3-5 years), and long-term (5 years+). Start by reflecting on your aspirations, whether it’s buying your first home, having the financial freedom to spend more time volunteering, or starting a non-profit in the future. Write down your goals and create smaller, measurable milestones, such as a savings target each month. Having clear objectives will keep you motivated and focused on your savings journey.
2. Evaluate your financial situation:
Before you build a house, you must set the foundation. The first building block is creating a monthly budget; check to see what comes in each month and what goes out. Ideally, you’ll have some money left over each month to save towards your goals. If you don’t, take a closer look at your expenses to see if there are areas you are willing to adjust. You’ll likely find more flexibility in your variable expenses, things like concert tickets, going out to eat, and travel—those additional savings can go a long way. You may want to align your budget with your values by allocating funds for environmentally friendly products, fair-trade goods, and companies with strong ESG practices (ESG stands for Environmental, Social, and Governance – these are non-financial standards that socially conscious investors use to evaluate investment choices). You may want to consider prioritizing sustainable living choices that fit into your spending plan.
3. Be wary of debt:
It’s no secret that interest rates have risen over the past year. When was the last time you checked the rate on your borrowing? According to Forbes Advisor, the current average credit card interest rate is a staggering 28.01%. Like a snowball rolling down a hill, interest charges on your credit cards could grow and compound if you don’t pay off the balance each month. People in our generation already have enough hurdles to jump in our financial lives – mounting student loan debt and record-high housing costs – credit card debt can become another major setback in our ability to save. If you have multiple credit cards, consider first paying off the balances of the cards with the highest interest rate. When it comes to banking and credit, consider using environmentally friendly and socially responsible banks and credit unions such as Amalgamated Bank or Clean Energy Credit Union. You may want to choose green banking options that support renewable energy projects and contribute to a greener economy. By working with the right bank, you can support companies that are involved with divestment from fossil fuels and benefit community development projects.
4. Set up an emergency fund:
We’ve all experienced a time where an unexpected expense arises. Whether it’s a plumbing issue in your home, a job loss, or an unforeseen medical emergency, having quick access to cash can be critical during uncertain times. Maintaining a rainy-day fund is always a good idea. This way, when the unexpected arises, you won’t find yourself dipping into your savings or taking out unwanted debt. Most financial experts typically recommend keeping aside three to six months’ worth of expenses in an emergency fund. This money should be in a safe and easy-to-access place like a savings account or money market. Check the interest rates on savings accounts at your local community bank to ensure you’re maximizing the interest you earn. Often, you’ll find rates at local banks and credit unions offer higher interest than what you’ll find at the big banks.
5. Supercharge your retirement savings:
Who doesn’t love the idea of ‘free money’? According to the Plan Sponsor Council of America, 98% of 401(k) plans make contributions to employee’s retirement savings. This contribution, or “match,” is money your employer adds to your own contributions. For example, your company might match dollar for dollar up to 4% of your earnings, which means if you contribute 4% of your salary, your employer will add an extra 4% to your account. These additional savings can bolster your retirement funds. For self-employed individuals or business owners, consider setting up a retirement plan such as a SIMPLE IRA, SEP IRA, or Solo 401(k). You may want to consider exploring your employer’s plan to see if they offer ESG investment options. As an investor, every dollar you shift towards ESG-oriented companies is a vote for a sustainable and ethical future.
6. Invest according to your values:
You have the choice of where you invest your money. Companies use your investment dollars to run and grow their businesses. Before you buy a stock or bond, you may want to consider companies that prioritize environmental sustainability, social responsibility, and good corporate governance practices. Try to avoid companies involved in industries that conflict with your principles. The world of values-driven investing is constantly evolving, with more and more companies being held accountable for their actions. Stay informed and educate yourself on emerging trends, new investment opportunities, and evolving ESG standards. You’ve worked hard for your money—you should feel good about the companies you invest in.
The Green Business Network is a program of Green America; our certified members adopt principles, policies and practices that improve the quality of life for their customers, employees, communities, and the planet. Comprised of thousands of businesses that meet or exceed our standards for social and environmental responsibility, the Green Business Network is key for the work Green America does: harnessing economic power—the strength of consumers, investors, businesses, and the marketplace—to create a socially just and environmentally sustainable society.
Brennen Ramos is a financial advisor and CERTIFIED FINANCIAL PLANNER ™ Professional at Longwave Financial. He works with clients in the NY region as well as throughout the country. He lives in Harrison New York with his fiancé Taylor and his puppy Stella. Growing up in the Hudson Valley has made him an outdoors fan for life and when he’s not working, he’s hiking or fly fishing. If you have any questions or would like to know more, you can reach him directly at Brennen@longwavefinancial.com or connect with him on LI.
Investments are subject to risk, including the loss of principal. Environmental, social, and governance (ESG) criteria is based on a set of non-financial principles in addition to financial principles used to evaluate potential investments. The incorporation of non-financial principles (i.e. social, environmental, political) can factor heavily into the security selection process. The investment’s social or environmental focus may limit the investment options available to the investor. Past performance is no guarantee of future results.
Securities and advisory services through Commonwealth Financial Network®, member FINRA/SIPC, a Registered Investment Adviser. Additional advisory services offered through Longwave Financial LLC are separate and unrelated to Commonwealth.
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