Your Answers to These 6 Questions Say More About Your Financial Stability Than Your Bank Account
The big house with a yard, luxury cars parked out front, six-figure bank accounts, and the ability to get what you want when you want it—together, it paints a picture that is often associated with financial stability, but is this really the case? For former JP Morgan trader Vivian Tu, the true meaning goes far beyond your pocket book and material wealth.
As of January 2023, sixty percent of United States adults, including more than four in 10 high-income consumers, live paycheck to paycheck, according to a report from LendingClub Corporation, a financial services company.
“Financially stable doesn’t mean rich, and I think that’s what people get confused a lot,” says Tu on the latest episode of WorkParty. The 29-year-old content creator, otherwise known as “your favorite finance girly,” launched her Instagram page, Your Rich BFF, in 2021 and has since amassed a dedicated following of over three million who tune in for pared-down advice on everything from investing in 401Ks to budgeting for your wedding.
Instead, she defines the term based on one’s ability to answer yes the following questions:
1. Are you making enough money to cover your budget?
2. Are you making responsible choices?
3. Are you setting money aside for savings?
4. Are you making decisions to invest now or invest in the future when you are able to?
5. Do you have a plan?
6. Are there things you want to do with your money to get you from point A to happily ever after?
“You can be a multimillionaire, but if you’re blowing through the money you’re making faster than you’re making it—and you don’t have a plan of how ‘today me’ is going to take care of ‘future me’—then you’re still not financially stable, even if you are making millions of dollars every year,” says Tu, while pointing to past stories of famed pro athletes and entrepreneurs who ended up going broke.
One of the best ways to ensure the stability of your cash flow is to prioritize financial planning, she says. “Talking about financial stability, talking about your financial future, and making that plan is not something you can do and then set it and forget it,” says Tu. “It’s very much something that needs to happen every single year, every single two years, and at a very minimum, every three to five years because things change so much.”
Change is something she knows intimately, having gone from working as a trader on Wall Street to a strategy sales partner at Buzzfeed, and, ultimately, quitting that job to become a full-time content creator.
Tune into the latest episode of WorkParty with Jaclyn Johnson where Tu gets candid about the financial do’s and don’ts of dating, plus hot tips on going to college and weighing your return on investment.
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