So you have been reading about Financial Independence (FI) and hearing about how there are people who have reached freedom. And now you’re ready to start your own journey towards financial independence!
Let me be one of the first to say welcome to the journey towards financial independence!
Before you get started, I want to remind you that your journey to FI is exactly that, YOURS. Everyone’s journey will look different. Keep that in mind as you read this or any other recommendations on how to reach financial independence.
1. Figure Out Your Why
Why do you want to reach financial independence??
When you are going on the journey towards financial independence, it is important to have a very solid why so that you are not just running after money. Money will still leave you feeling empty once you have it. Though money itself isn’t a bad thing, loving it is. In 1 Timothy we hear that the love of money is the root of all evil.
Money is to be used as a tool. Reaching financial independence can provide so many opportunities. Your job is to figure out what you want to do when you get there.
Is it to spend more time with family and friends? Is it to give you more flexibility with your money so you can give more? Are you wanting to work in vocational ministry, but that job won’t cover your living expenses? Do you want to focus more time on your health?
Sit on this for a while and figure out what exactly your why is. Because when times are tough, it will be your why that you fall back on.
Think about these different areas of your life and start to figure out what your ideal life might look like – Job, Health, Relationships, Family, and Faith.
Our Why
My husband and I have decided to go on this journey towards financial independence and have come up with a few reasons why we want to do this. He would love to continue working as a youth pastor for the foreseeable future, and I would love to have the option to stay at home with our future children. In order to do this though, we would need to be financially free. We also want to have the ability to give more to our church and other ministries in both time and money.
Related: Married to a Real Estate Investor
2. Track Your Money
The first thing you need to do in order to begin your financial independence journey is to find out where your money is going. This may not seem like a big step, but trust me it is.
If you want to be able to save money and spend it more wisely, you need to first figure out where it is all going. You may find out you are spending more money on things that really aren’t necessary.
Related: 5 Step Guide to Creating Your First Budget
Money Tracking Example
My husband and I started to truly track where our money was going back in August 2018. At this time, I found out that I was spending almost $200 every month on eating out for lunch, and going out for coffee!
That is a lot of money! It wasn’t like I was going out to fancy places for lunch or ordering “fufu” coffee drinks (a phrase my father coined for any coffee drink that wasn’t just purely coffee). This was just me grabbing a sandwich from Jimmy Johns or a small coffee from Caribou. However, I was going out enough times each month to spend close to $200!
There are plenty of ways you can start tracking your money. Some people prefer to keep it all written down in a journal or input it themselves on excel. My husband and I tried doing it all via excel for a few months, but it was tiresome, and if you didn’t keep up with all of your expenses it would create big projects down the line.
What We Track Our Money With
We switched over to using Mint. Mint has a very user-friendly website and mobile app. We are able to tie in all of our accounts into it to get an overall picture of our finances. We have created a budget in Mint and it will automatically add in each of our expenses to the appropriate budget. I love it because we can see exactly where all of our money is going and can see when we have overspent in a certain category.
3. Reduce Your Expenses
After you have figured out where all of your money is going, it is time to cut back on the spending!
Maybe you are like me and realized you are spending too much on eating out and getting coffee. Can you figure out a way to scale that down?
Related: 7 Things You Should Stop Paying For
In my situation, once I realized how much I was spending on food and coffee, I decided to start packing my own lunches. I also decided to stop going out for so much coffee because I could have free coffee at work! Now we have a budget of $45 for coffee and lunches, and I usually try to stay under it.
Take the time to look at where your money is going and decide what is necessary and what isn’t. Maybe you are spending too much on groceries every month, or maybe you could get rid of your cable because you don’t really use it anyway.
Maybe you have a weakness for new clothes, and you are spending $50 here and there on a new top. When it comes down to it, that is a lot of money!
The key is to cut down your unnecessary expenses so that your lifestyle isn’t as expensive or as difficult to cover with your income. Also, keep in mind, this isn’t just a one time cutting back. You should think long term cost-cutting. It is a life long journey – a lifestyle change.
4. Increase Your Income
You may first think that I mean getting a new job or ask for a raise at work. Though that is a great option, it may not be possible for a lot of us. What I rather mean is a Side Hustle!
A side hustle can be a great way to earn some extra money. And it is exactly what it sounds like. Something that you do on the side! It doesn’t replace your full-time job but is a way that you can earn a little more.
Your side hustle can help build up an emergency fund, you can use it to pay off debts, or even put it towards investments.
There are so many side-hustles out there. So find one that fits a passion of yours so that you are doing something you really enjoy.
Side Hustle Ideas:
9 Simple Cash Back Methods to Use While Shopping
How to Earn Money While Traveling
My Number One Favorite Money Making App
How to Start a Profitable Blog
Our Side Hustle – Real Estate!
My husband and I have been working on our side hustles. We recently purchased a rental property that provides a few hundred dollars in extra income each month.
Right now we are in the process of finding a second rental property. I have also started working for Redfin on the weekends as an Associate Agent, and this provides the opportunity to do something I love as well as provides some extra cash!
What can you do to make a little more money to help you along towards financial independence?
Related: 5 Ways You Can Start Learning Your Market
5. Be Dedicated to Becoming a Lifelong Learner
The world is constantly changing, and there are so many new things available to us. New technologies come out, new businesses emerge, tax laws change, and with each one comes new opportunities.
We need to be dedicated to learning these changes and figuring out how we can utilize them! For instance, Airbnb revolutionized the travel industry, as well as homeownership. Tax laws favor people with real estate.
Credit cards allow people to “travel for free.” The list goes on and on, and if you continue to fill yourself with knowledge, you will excel.
Related: 6 Ways to Get a Free Education
I am always trying to learn new things. I love reading books that will teach me something new. You can always check out what books I am reading, or have read previously on my Goodreads account.
Learn as much as you can about what others are doing to reach financial independence. I highly recommend the ChooseFI blog and podcast.
6. Take Action!
Now that you have decided to go on the journey towards financial independence, start making changes! Start setting goals and keep yourself accountable to them.
Write down your why and look at it often to give you motivation.
Start tracking your expenses and cutting back where you can. Start a new side hustle and build up your savings account. And continue to learn as much as you can so you can grow closer towards financial independence everyday!
You will begin to see that pursuing financial independence will help you to create a lot of great habits. Share these things with others so they can join you in your pursuit!
Ecclesiastes 5:10 says –
“Whoever loves money never has enough; whoever loves wealth is never satisfied with their income. This too is meaningless.”
What will your journey towards financial independence look like?
So remember, financial independence is not about chasing money and wealth, it is to provide more opportunities for us to further God’s Kingdom. If you chase money, you will never feel like you have enough.
You May Also Like
Can We Pursue Both Faith and Financial Independence?
How to Recognize Bad Goals
How to Honor God With Our Money
Tips to Help You Build a Financially Strong Marriage
It is wonderful to learn about your why! Financial freedom can allow us to serve God in new ways. Additionally, it can allow for spontaneity in our service work :-).
Money is most definitely is a tool!
Absolutely! It’s exciting to see how people serve the Lord once achieving FI as well as throughout the journey towards it!