To all of my American readers out there, I would like to wish you a happy Independence Day! Although we associate the 4th of July as a day of fireworks, barbecue, and a day off, we should also remember we live in a free country and are blessed to have particular freedoms and rights that many other people around the world aren’t able to have.
Independence Day also allows me to reflect on what it means to be financially independent. It means something different to everyone, but for me it means not stressing about paying bills, having enough money in case of an emergency, being able to afford the things I need as well as the things I want, and not being stuck in the rat race. So I have 5 ways I plan to be financially independent:
- Make my business work: Being able to build a sustainable, location independent, lifestyle business is really important to me. I want to be able to bring in a steady income by working from home or wherever I want to be for the day. I’ve took this weekend to ask, apply, and look for more writing opportunities. I’m also working on networking, as this is where I lacked some success by allowing some of my circumstances to get in the way. When I can make my business work, I have the potential to earn as much as I want, depending on how hard I work.
- Pay off my debt: This is a huge, crippling factor on my quest towards financial independence. With credit cards and a loan, I’m in several thousand dollars worth of debt. Once I’m able to eliminate this debt, I’ll automatically have more money each month because I won’t be paying for those bills! This is a huge priority for me. My debt snowball plan may not be how I described it before, but I’ll definitely be working on it however I can.
- Build up an emergency fund: What can I say? Shit happens. And it definitely happens to me. Car accidents. Lay offs. Health issues. I’ll feel a lot better when I have some cash to lean on in case something happens. I’ll start off with $1,000 then work on building up 3 months, 6 months, then 1 year worth of expenses in an account. This will be so huge for me and my family, as I’ve realized we’re not immune to life’s problems.
- Start saving for retirement: I’m not looking at retirement traditionally, especially if my business truly takes off. I won’t have a 401(k) to contribute to, but I will have a Roth IRA. I actually opened an account but haven’t been able to contribute. I want to save up for retirement at an early age. I have no plans working past my 50s honestly. That leaves me about 30 years to save up and save nicely.
- Buy a house: One thing I’m really looking forward to is owning a home. I hate moving and have done it several times, so when I buy a home, I honestly don’t want to move from it. It’ll be a house my family can grow up in and be able to come home to. I want to be able to contribute for a down payment, then be able to pay it off, preferably in a 15 year fixed mortgage as opposed to 30. If I do choose a 30 year, I’m hoping to pay it off in 20.
So it’s definitely not all happening by next year, and probably not even in the next 5 years, but it’s an ongoing project. Financial independence is so important to me, and I admit I’m inpatient. I have to remember I’m only 20 and some people don’t reach financial independence until their 50s in some cases! I’m still going to work hard at achieving it.
How are you spending your 4th of July? What are your financial independence goals?