Debt | Life Musings

Achieving Financial Independence When You Have Money

Financial Independence

The Less You Have To Worry About The Better You Will Sleep

It’s time to buy your way out of this consumer frenzy and work towards achieving financial independence.

Teaching people that achieving financial independence is doable when they have money is a tough topic.

Not everyone agrees and you will always face backlash from people who fail to read between the lines.

There will always be too many assumptions which is not an easy buy or sell tactic in the financial world.

Each of us lives a life that couldn’t possibly be singled out by someone preaching financial independence.

  • Do you have money?
  • Will you always have money?

The only true answer we do know is whether we have money because the future is well, the future.

Future Financial Flop

Many retirees who were hoping to enjoy the good life are losing thousands of dollars with Covid-19.

They don’t have the investment recoup time that the younger generation does and even then the numbers are unsettling.

Speaking to reporters outside Rideau Cottage on Thursday morning, Canadian Prime Minister Justin Trudeau said his government is concerned with retirees who may have seen their retirement savings evaporated in the recent stock market tumult cause by COVID-19.

We all face obstacles and finding a roadway to debt freedom will be followed by donuts, drifting and mechanical issues.

Not only will the ride to achieving financial independence be bumpy it comes with sacrifices.

This means that even if you had a solid retirement plan you may have to downgrade.

The positive twist is that at least you had a retirement plan because not everyone does.

Drowning Underwater

What gets my blood boiling is the people who feel they live on the financial cusp of poverty and can’t possibly save money.

Yes, you can if you believe in the process.

There’s nothing wrong with desiring wealth but many of us have acquired stuff that you really don’t need.

For example, if your monthly net income leaves you only $50 until your next pay then you turn that into gold.

Make a plan and figure out how you can use that money to make more money.

How much of that $50 can I set aside to start saving cash? $5, $10?

Not every month will go smoothly.

Do you remember the donuts and mechanical issues I discussed above?

Becoming blinded by the numbers is what pushes people underwater and for some they never resurface.

Have you ever noticed that when you have money that life is good but the minute you don’t it’s all that matters?

This is something that most of us can relate to happening at some point in our lives.

You may even be going through this right now and are reading this post looking for ways to surface successfully.

When all that matters is the oxygen you breathe you must find a way to open the airwaves.

Even one dollar a day saved in your savings account is better than drowning.

Most of us who are debt-free started with nothing in the bank so we know what it’s like.

Achieving Financial Independence Through Generations

For the lucky few the tree was planted well before they were born and passed down through the generations.

These people are the lucky ones who were given opportunities in hopes of keeping that tree fruitful.

Not all of them are successful at this simple task because money may not buy happiness but it buys stuff.

In other words, the circle of trees that continue to give year after year eventually die when one bad apple gains control.

Are you really achieving financial independence if it was handed to you?

Not really but the tricky part is making sure you don’t mess up and that success ends with you.

Achieving Financial Independence By Skipping The Small Stuff

Any time you have to stop and ask yourself whether you can afford something the answer should be no.

We’ve been through this and it’s not until now where we are debt-free that things have changed.

If we want to go into the produce section and buy organic food without looking at the prices it won’t break us.

However, if we continue to do this with everything we buy it could take us from ‘life is good’ to struggling for oxygen.

There’s always going to be a fine line between whether something is affordable or sustainably affordable.

What I mean by that is whether you can financially afford something this one time or continue to buy over and over.

For example, if you go to Starbucks and the cost of a specialty coffee is $5 and you need to ask yourself whether you can afford it, you probably can’t.

Not everyone thinks about whether they can afford something especially when it becomes an everyday occurrence.

Want to understand your finances?

You can count on a Sun Life Financial advisor for help.

Achieving Financial Independence Without The Big Stuff

Just as those little expenses add up the big-ticket items can roll you down the hill right into the ocean.

How many of you went on vacation yet came back and couldn’t pay your bills?

You can’t fight debt by pretending you deserve more and more when you haven’t even paid for what you’ve already enjoyed.

Going to concerts, buying new clothes, fancy cars, and even renting or buying a house you can’t afford is not feasible.

You can’t approach achieving financial independence if you continue to have that type of attitude with money.

Consequences Of Not Tracking Your Expenses

All the small stuff adds up whether it’s a coffee, lunch, health and beauty products, tools, magazines, etc.

Likewise, if you took a moment to consider purchasing a can of coffee for $25 then you could make Starbucks at home every day for a month.

Why would you want to go back to Starbucks every day for that $5 specialty coffee?

For many people, it boils down to taking the time to buy that can of coffee and making it at home.

How silly does that sound?

Someone would rather spend $35 a week on specialty coffee rather than $25 plus cream, sugar/sweetener, and fancy syrups.

Don’t get stuck in Latte Land when you can put all of that money to work investing for decades to come.

You Can’t Fight Debt If You’re Angry

This is the mentality that wanders in society yet cries when they don’t have money set aside for an emergency.

Life doesn’t work that way I’m afraid.

Hearing the truth hurts but if you want to come up from underwater alive, listen and make a financial plan.

Also, when someone is trying to guide you it’s never about to ‘look at what I have’ it’s about motivating you.

I’ll admit, I’ve tried with so many people but the negativity is hard to break through sometimes.

Anger seems to get the best of people when they discuss money especially if they don’t want to take responsibility.

No matter what has happened in your life you choose to sit in the hole or swim to the surface.

If you’re waiting for a miracle, it will never come.

Never.

Steps To Achieving Financial Independence When You Have Money

If you are a regular reader of this blog you may feel as if you’ve read this before and you’re probably right.

For those of you who are new get ready for me to keep telling you that debt-freedom is possible.

Sometimes we have to do things over and over to gain experience and knowledge and the same goes for finance.

Every month budgeting may be the same boring task but the more you do it the better you get at it.

The same goes for investing in your retirement and know that you’ve stashed something away.

So, for some of you, this information may be new and for others, it’s a refresher to keep you motivated.

Financial Plan

What does achieving financial independence mean to you?

It doesn’t have to mean that you have a mortgage-free home and zero debt.

Financial independence could mean that you’ve moved on from your parent’s house and found a job you enjoy.

It could also mean that you have stashed enough money away for emergencies, paid off debt, and have no car loan.

The idea here is to understand what fuels you and what you want from achieving financial independence.

This is not about boats, flashy cars, and mansions in private neighborhoods.

A simple financial plan is detailing how you plan to achieve goals so you don’t have to always worry about money.

Having no debt is a great thing. I don’t have to worry much at all every month but I certainly still track every step of the way.

A financial plan is not over when you feel you’ve achieved financial independence, it’s for life.

The retirees who are facing massive loss over Covid-19 are a great example of how you can plan and it could backfire.

That alone should be enough reason to have a plan B, C, or even D when it comes to your future livelihood.

Focus On Making More Money

Making more money is always a smart way to add value to your savings especially since money is considered a tool.

If you’re not happy with how much money you earn find ways that you can earn a bit extra cash.

By putting your energy, expertise, and skills to work sourcing extra income can be achievable.

For example, if you love baking and don’t mind writing you could start a recipe blog.

Bloggers can earn millions of dollars based on their audience, products, and personality.

I’m not saying you will become a millionaire but the potential to earn money is.

You may enjoy spending time with seniors and opt to take them grocery shopping or spend time with them for cash.

There are plenty of families who are looking for companions for their loved ones.

On your days off you could provide such services that are fairly simple and fun at the same time.

Alternatively, ask your boss for a raise by writing a letter to him/her and set up a meeting.

Achieving Financial Independence With A Budget

If you spend less on what you don’t need you’ll have more to spend on what you do need.

Every financial guru will teach you that you need a budget to understand your money.

They are not wrong however you need to find a budget that works with your lifestyle.

What I’m saying is that budgets aren’t all created equal and what you want from it matters the most.

Perhaps carrying envelopes of cash is not your thing nor is stashing money in jars just to control spending.

You may go through a few types of budgets to find the right fit so don’t let that discourage you.

Some of you may prefer old-school pencil and eraser budgets comparable to going into the bank to complete transactions.

We opened a bank account at TD Canada Trust yesterday, and our banker said that many people still come into the bank despite available technology.

It still works but the process runs differently even if the end goals are the same, to spend less than you earn.

Emergency Savings

You need it.

Never, ever get involved in something where you don’t have the means to save for financial backing.

For those of you who have purchased a house that was way over your head the loss of one income could sink you.

Don’t be like this realtor who blames the pandemic for her shortcomings when forced to sell.

Now TD bank has charged her a $30,000 mortgage penalty and she doesn’t feel she deserves it.

The bank isn’t in the business to hand out funds for charity, they are there to make money.

It’s crucial to have at least 3-6 months of emergency savings to fund your monthly budget.

Even after you save 6 months you may feel generous to yourself and top that up to 12.

Whatever you choose to do having back-up cash that is only used for emergencies will be your angel in disguise.

When you need money because your furnace stopped working or your car broke down you’ll be saved.

Don’t be like the other people who put more energy into complaining about why they can’t save and just save.

We’ve lived through all of the above so I’m talking from experience.

I try to do that when I write so the reader understands that I’ve been in their shoes. Or we have, I should say.

Invest For Tomorrow

Whether you become a real estate investor or filter your cash into diversified investment portfolios it’s all about the future.

Your future and perhaps your children’s future.

Taking steps to achieve financial independence that allows you freedom when you retire means planning today.

Even living a simple life requires a plan of achieving financial independence especially for your golden years.

When we change our minds about finance we change our perspective on what money pays for versus what it offers.

For most of you, (including myself) the dream is to be free, not rich and there’s nothing wrong with freedom.

Discussion: What steps have you been taking to swim into achieving financial independence?

Leave me your comments below.

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One Comment

  1. At our house, especially since self-isolating began, our focus has been on spending less.

    Sometimes it goes smooth us silk until I hit a WANT and have to tell myself NO! My latest want was a bag of nectarines. Do I NEED them? No! Do I WANT them? Heck YES!

    The truth about how deeply committed I am to our financial future is revealed with that simple little struggle. If it’s a WANT I skip it, if it’s a NEED then I save up for it.

    Do I miss the WANTS? Yes, I am human after all but I believe each tiny decision now will have a long term consequence. If I don’t want to pay the piper then…I make small sacrifices now.

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