For example, many people hope to only work for pleasure, retire early, not have any debt, and be able to travel whenever they want.
What Financial Independence Means to Me
For me to consider myself financially independent, I want to be completely debt free of my student loans. I also want to be able to travel when I want within reason and pay for my children’s college education. I hate that I had to take out student loans, and I don’t want my children to have the same burden.
Working Towards Financial Independence
With these goals in mind, my husband and I are working diligently to be able to achieve them as soon as possible. Here are few things we are doing to help us get there quickly:
- Budget – My family creates a monthly budget to help us project and stay on track with our spending. At the end of each month, we are easily able to see what categories need to be adjusted in the future.
- Track Spending – Having a budget in mind does not mean anything if you don’t actually track your spending. By tracking spending, you can easily predict bills that change every month, like utilities. For example, to decide how much to budget for each month’s energy bill, we can look back on the previous year to help us decide so we’re not caught off guard by the high costs of energy in the winter.
- Live Frugally – We try to live as frugally as possible. We shop sales and use discount codes or coupons as often as possible. I don’t like to pay full price for anything, and it actually creates a fun challenge to see how much I can save off of original prices whenever I go shopping (which isn’t very often). We also use cloth diapers for our twins and ultimately have a very minimalist parenting style with very few toys.
- Minimize Student Loan Debt – With my husband still in medical school, we are actively acquiring new debt, which is the total opposite of our goals. But, we like to think of this debt as an investment into his education and our future as a family. We know it’s still debt and will still have to be paid off, so we try to minimize how much student aid we use each semester. By sending back as much of it as possible, we’ve probably saved ourselves $20,000-$30,000 worth of additional debt over the course of his medical school career.
Ultimately, the key to achieving financial independence is figuring out what it means to you and which goals you are most passionate about reaching. Keeping these goals in mind and setting specific steps to get there will help you achieve them much sooner. I know I can’t wait to be financially independent. It might be a long way off, but it’s an amazing goal to have.
What does financial independence mean to you?- Catherine Alford