Two Paths towards Financial Independence
Freedom. That’s one of the keywords I think about in business, but specifically -> financial independence.
If you’ve never heard of FIRE in the secret freedom seekers community, it stands for “financially independent, retired early.” And although many people want to retire, most of us are just happy with financial independence in our personal finance journey.
Why is that? Well - first off, who doesn’t like to control the how, where, and why of the work they do? When you have FU money, you have the ability to turn something down that isn’t aligned with your goals. It also means, you’re not swindled by “staying late to help out.” There’s nothing quite like having the freedom to quit a job you hate because the company can’t own you. That’s the beauty of FU money, and it’s just one portion of the financial independence realm.
**Before we dive in any further, here’s a little note: This post contains affiliate links. But I am hardheaded and only share about tools I use and love in my own business or with my clients!**
Typically, the two dominant paths towards I usually see people take in starting their financial independence journey:
They use their bank account to determine how much they can spend:
This is actually how many of us start, but when the needle isn’t moving in the direction we’re going (or if we like to spend a little more overall), then we need to hack the system to make it work best for us!
If you like to use this method, you might want to check out the book Profit First: Transform Your Business from a Cash-Eating Monster to a Money-Making Machine to see how this can be done in a bit more detail! The book is geared towards business owners, but can be adapted to personal finance too if you’re thinking about your number #likeaboss!
They use a system to determine how much they can spend:
These are people who are happy to check their system to align their spending to their priorities. This is usually the second step in the journey, and I find YNAB**, Mint, and EveryDollar are some crowd favorites too!
Both options are great since the ultimate focus is aligning your priorities to your spending, and ultimately help boost your savings goals. And honestly, it’s important to find the one that best fits you and your family!
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