Living a Financially Independent Life

Most people have a higher level of dependence than they are comfortable with, and that is due in large part to money. To be truly independent requires having the funds to do so. Most people do not know how much money it takes to fully fund their lives, and they don’t live within their means. These two issues are generally the driving factors behind financial dependence. Living beyond our means creates debt, and a lot of people when borrowing money do not make a plan on how to pay it back. For a lot of people, debt creation began with a student loan and taking out credits cards with predatory interest rates. This can lead to a lifetime of poor financial literacy.

Poor financial literacy leads to people being over leveraged and feeling as though they are out of choices. Poor financial literacy leads to financial dependency, which can take many forms. Sometimes it results in being locked into familial relationships that are toxic or stuck in a job you can’t afford to quit.  Improving financial literacy takes attendance to facts that are provable. It may be a shock to learn that most people have an emotional financial truth that is different than the objectively verifiable factual reality. A lot of people play the “if this then that” game with money. If I use this credit card, then on payday pay it back, I’ll be alright. This does not factor in interest and asking oneself how much can one afford to pay to spend that money today rather than after payday.

Educating ourselves on what our actual financial means are involves understanding our income and the actual cost of things. Factoring in interest every time we use a credit card and asking ourselves “is this item worth the interest?” Understanding our needs versus our wants. This takes being brutally honest about who we are.  I had a client who needed an expensive club membership more than they needed food. They cared more about what their life looked like than having food or heating in their home. They were honest about their needs and were able to achieve financial independence by understanding where they would and would not cut corners. This level of honesty will help you cut cost where it is easiest for you while remaining as comfortable as possible. Once you embrace the factual truth of money, the more quickly you’ll be able to experience financial independence.