Simple Yet Powerful Steps to Financial Stability
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Financial stability and freedom are goals many aspire to, yet achieving them can seem daunting without the right guidance. That’s where a personal finance coach, Steven Payne, comes in! He founded Abundant Life Financial Partners with the intention of helping individuals with their finances. You can read all about his journey in this interview, and you’ll also find out a lot about foundational financial principles. We won’t spoil any more, so jump in and read the insightful interview below!
In this article
Background and inspiration
Joy Wallet: Can you share a bit about your background and what inspired you to become a personal finance coach?
Steven: Growing up, I was keenly aware of our family finances. We weren’t destitute, but money was a big stressor. When I was in middle school, my dad discovered Dave Ramsey and the whole family got on board with the debt pay-off vision. That vision brought a certain kind of hope into our family that hadn’t been there before.
I took note and have worked to stay pretty close to Dave’s principles in my adult life. I worked full-time to make it through college without loans or help from my parents. I’ve never taken out a car loan. I’ve invested in the future, and I live within my means. These simple choices from the beginning have brought countless blessings into my life. Even if cash flow isn’t where we want it to be at times, my wife and I don’t have money fights. We don’t have to worry about the financially unexpected because we have an emergency fund. We’re able to easily pivot our monthly budget as needed because our only debt payment is our mortgage.
I desperately want to share the financial freedom and peace I’ve experienced with as many people as possible. I know it can be difficult, but I know it’s possible. I think we are tragically undereducated in school when it comes to personal finance, and it has led to many societal issues we see today. I work to help people win with their money regardless of where they are in life.
Clearing up misconceptions
Joy Wallet: What are some common misconceptions people have about personal finance?
Steven: I feel the biggest misconception is that personal finance is complicated. At its core, personal finance is very simple — live within your means and save for an emergency. That simplicity, though, can still be difficult. Of course, there needs to be a solid knowledge base behind that simplicity because it is very easy to make it more complicated. That is the value of a financial coach as opposed to just increased financial literacy; a good coach teaches you sound principles and then helps you to put these principles into action and create lifelong habits. A good coach helps you stay on track when those days wherein you want to give up undoubtedly come.
Starting strong
Joy Wallet: What strategies do you recommend for individuals just starting their financial journey?
Steven: If you are just getting started, the best thing you can do is fully recognize where you are right now. Do not avoid looking at accounts because you think you won’t like what you see. Get a clear idea of where you are and where you want to be. From there, stick to time-tested strategies (live within your means, save for emergencies, and save for your future) and expect it will be tough work.
Often, a poor financial situation results from an unwillingness to say “no” to yourself when you want a thing or experience you cannot afford. Strengthening that “no” muscle is a difficult and necessary skill for all of us.
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Budgeting basics
Joy Wallet: How can someone effectively create and stick to a budget?
Steven: Similar to the answer above, live in reality. Don’t think you’ll reign in all of your bad habits immediately, and don’t think you can spend more than you bring in. The truth is somewhere in between, and it is up to you to align your budget with your priorities. A realistic, personalized budget is essential to staying on track.
Creating that budget and staying motivated can be quite difficult, which is why those are the main services we offer through our website, AbundantLifeFinancialPartners.com. We will analyze your historical spending to create a plan just for you, then be your biggest cheerleader and coach to help you execute the plan.
Debt management
Joy Wallet: What are your top tips for paying off debt, especially for those who may feel overwhelmed?
Steven: My first tip is clarity. Knowledge is power! Know exactly where you stand. Second, commit to ferocious intensity for a time. Cutting back expenses to put more towards paying off debt will not be the rest of your life. I have fallen into the trap of that mindset, and it is simply false. Sacrifice now for a better, brighter tomorrow. It will not last forever. Last, I highly recommend the snowball method of paying off debt. This is where you put minimum payments toward all debt except your smallest balance. Put as much as you can towards the smaller balance and roll everything over to the next smallest balance when that is paid off. While it may not be the best method mathematically, humans are emotional creatures. The wins of paying off smaller debts often propel you to finish your path towards being debt-free.
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Building an emergency fund
Joy Wallet: How important is building an emergency fund, and what steps should people take to establish one?
Steven: Nothing will derail your journey to financial freedom more than not having an emergency fund. This is absolutely crucial. An emergency fund is the safety net when (not if) life happens. Living life without an emergency fund IS an emergency.
Start by saving up $1,000 as fast as you can, work up to a month of expenses, then continue to three to six months’ worth of expenses. Then, don’t touch that money unless there is an emergency! Your future self will thank you.
Credit scores 101
Joy Wallet: Can you explain the significance of credit scores and how individuals can improve theirs?
Steven: Credit scores are important if you intend to take on more debt. Often, people will say it is impossible to get a mortgage without a credit score, but I can attest that is not true. My wife and I were able to get a mortgage with a competitive interest rate without any credit histories whatsoever. Certainly, it took more work as we had to show consistent payment histories for things like tuition, bills, rent, etc., but it was far from impossible.
Additionally, a decent credit score is the best way to qualify to rent many homes and apartments. While not always a requirement (again, it may be hard to find a rental without a credit score requirement, but I promise it is not impossible), it does make things easier.
If you wish to improve your credit score, first check your credit report for any inaccuracies and report those. From there, the best thing you can do is make your payments on time, every time, and not max out your available credit. Time and consistency are your best friends.
Investing for beginners
Joy Wallet: What investment strategies do you suggest for beginners looking to grow their wealth?
Steven: A lot of people make this more difficult than it needs to be. While I cannot give specific investment advice, I can tell you what has worked for me — a very unsexy, boring Target Retirement Date Index Fund from Charles Schwab, Fidelity, etc. I’m not sponsored by them, but I love Schwab because of their ease of use, low-cost funds, and no-cost trades.
So, choose what year you want to retire, find the target index fund, consistently put in money, and wait.
I think the biggest piece of advice I can give is not to wait. Time is a precious resource you will never get back, and your best friend is investing. No matter the amount, start investing today.
Retirement planning essentials
Joy Wallet: How can individuals plan for retirement effectively, and what common mistakes should they avoid?
Steven: Similar to investing, I cannot give any specific advice here. The general consensus is to safely save for retirement, save 20% of your income, and invest in low-cost index funds. It’s boring, but the get-rich-slowly scheme is the most effective. If you want a specific number to shoot for or feel you are behind and want to know how to catch up, there are several websites out there that can help you find “your number.” Avoid at all costs the newest, flashiest, most exciting investments. Some people will strike pay dirt with these, but chances are it’s not you.
For more personalized advice, seek out a licensed professional.
Needs vs. wants
Joy Wallet: How do you approach teaching clients about the difference between needs and wants?
Steven: When it comes to needs and wants, it is important to consider what is essential. A good map to use is Maslow’s hierarchy of needs. Shelter, food, and security are obviously needed. I think it’s wise to include transportation, exercise, health care, and personal relationships there, too. Entertainment subscriptions, drugs, and even nail appointments are not “needs.” The question you can ask yourself is: “Can you live a healthy life without this?” Of course, there are certain things you can do within those need categories to reduce expenses, too, like eliminating eating out or buying two cheap dumbbells instead of an expensive gym membership.
I want to be abundantly clear: I do not believe everyone should have a scorched earth, needs-only lifestyle. That is only while working towards freedom from debt. Once you’ve unshackled yourself from those chains, I want you to have the margin to spend money on all the wants you can while living fiscally responsible. Again, you are sacrificing now for a brighter tomorrow.
Working With Advisors Can Provide More Security than Going at It Alone.
- SmartAsset's free tool matches you with up to 3 financial advisors that serve your area in 5 minutes.
- Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Client success stories
Joy Wallet: Can you share a success story from one of your clients that illustrates the impact of financial coaching?
Steven: My first thought is our very first client. A thought I had and heard from others was, “If someone is struggling with their money, why should they spend money on your services?”
It’s a fair question. The answer came in this first experience. Our client came to us because they felt they could do better with their money, but they weren’t exactly sure how. On the surface, they didn’t have the extra funds for the meeting, but they made the jump. In our deep dive, we found this person had a greater monthly deficit than they thought. It became clear to them they needed to pursue additional income just to cover their basic needs without overspending.
I realized the gap between what they thought was happening and reality was bigger than our fee. By investing, they were able to correct their path and began seeing a monthly surplus. This surplus enabled our client to pay for travel and other wants without using their credit cards. This journey has given them greater financial confidence, and they are well on their way to an abundant life.
Finding a finance coach
Joy Wallet: How can someone find the right personal finance coach for their needs?
Steven: Find someone who you can connect with and who will tell you the hard truth. Also, try to avoid someone who will try to force you into a cookie-cutter program. For example, I mentioned I don’t care about credit scores and I don’t like debt. That’s me. If your goal is to improve your credit score, I’m happy to help you reach that goal. Our coaches are here to help you with your personalized plan and your personal goals as long as those goals aren’t actively harming your financial future or someone else’s.
Avoid anyone promising quick and easy results. This is a marathon, not a sprint. We want to change your life, not just your month.
Working With Advisors Can Provide More Security than Going at It Alone.
- SmartAsset's free tool matches you with up to 3 financial advisors that serve your area in 5 minutes.
- Each advisor has been vetted by SmartAsset and is held to a fiduciary standard to act in your best interests.
Finding joy
Joy Wallet: What brings you joy in life, both professionally and personally?
Steven: What brings me the most joy in life is my family. I love the time we spend goofing around, exploring the outdoors, and listening to music. Nothing brings me more joy and fulfillment than quality time with my family.
On my own, I enjoy baking and painting while following along with Bob Ross.
Professionally, I deeply enjoy whenever I have the opportunity to serve others and improve someone’s life in some way.
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