Living the Dream of Financial Independence

If you feel you’re in a constant struggle to make ends meet, the promise of financial independence must seem like a fairy tale. But the truth is, this dream is far more attainable than it seems. Maybe you won’t get there this year or next, but some progress can be made in a matter of months, and depending on your starting point, a decade may be all you need to reach your goal.

The good news is that these changes will improve your well-being right away. You don’t have to wait until you retire to reap the rewards. All you need to do is begin living by a consistent set of principles that will add up over time.

Of course there are no shortcuts, but you might be surprised by how few people actually live out these basic principles. The reason is that most people don’t think them out, or simply don’t believe that a better financial life is within their reach. But a better life can be yours for the taking if you are consistent, patient, and clear-minded about your goals.

With that said, here are 10 bedrock principles for achieving the dream of financial independence. I hope these words serve as a wake-up call and an encouragement that the dream can be achieved.

Live within your means

This is the bedrock financial principle and even a child will understand its wisdom. If you spend more than you earn, you’ll be going into debt, and if you spend exactly what you earn, you won’t be building your financial independence. It’s far better to spend a little less than you make, put money aside for emergencies and invest the rest for the future.

Have a long term perspective

It takes having a long term mindset to make the choice to spend less than you make. For most people, anything they desire, they must have it as soon as possible. But if you want to build financial independence you must say no to a lot of things you want, and wait on them for when you can truly afford them. In fact, a frugal mindset is the best foundation for a wealthy life.

Avoid debt if at all possible

Debt is a tool that can be used to achieve a goal faster, but not without financial risk. The bottom line is that you have to pay the money back with interest, and that can become a burden. For the average person who is trying to keep their finances in order, the best approach is to avoid debt completely except for a mortgage on a home. There are simply too many risks and too many bad things that can happen with debt that can’t be repaid on time.

Save for emergencies

One of the most important uses of your savings is to give you a buffer against the unexpected. You never know when a car might break down, an appliance stops working, or someone gets sick. When emergencies happen, you don’t want to be caught off guard and tempted to go into debt to resolve the situation. It’s far more sensible to have a fund set aside that can cover the unexpected bumps in the road.

Spend time on your investments

In our current inflationary economic environment, it’s not wise to leave all of your savings in a bank account. I won’t offer specific investment advice, but rather encourage you to learn how to invest your money so that it can stay ahead of inflation. It’s also wise to use low-fee tools and platforms so that you can keep more of the money’s gains for yourself.

Don’t compare yourself to others

The most important mindset for achieving financial independence is gratitude for what you have. The quickest way to spoil this mindset is to compare yourself (unfavorably) to others whose lifestyle seems better or more luxurious than your own. I’ve found that the more I avoid social media and watching TV shows, the less aware I am how other people live, and instead can focus on building a life that is meaningful and satisfying for me and my family.

Adopt frugal, sustainable habits

A frugal life is one that is focused on efficiency. You don’t spend just because you can, and you don’t waste resources just because they are available. A frugal person sees the things that money can buy as tools to help make their life better, not status objects to show off to others. A frugal person values their time, and tries to optimize the way they do things for maximum efficiency.

Budget your money

A budget is just a plan. It’s how you intend to spend your money in a way that is aligned with your goals and values. Without a budget, you are just reacting to expenses as they come up, and may not have the money to spend on what is most important to you. Financial security and peace of mind begins with creating a budget and doing your best to stick to it.

Track your progress

One of the most motivating things you can do is to set a financial goal and then track your progress towards that goal. Without a doubt you will have setbacks and unplanned expenses, but overall you will be seeing progress towards your dreams. That progress will motivate you to keep going and remind you that the journey is worth it.

Invest in yourself

Not everything in life is about saving money. One of the best uses of your money is to invest in yourself to make yourself more valuable or to improve the quality of your life. You can do this by learning new skills, improving your health, taking on interesting side projects, or meeting new people. Be wise about how you spend your money far, but be generous in spending for these kinds of personal investments.

Be patient and wait for good things

One of the best ways to achieve financial independence early in life is to be patient and wait for good things to come your way. Too many people rush into big purchases like buying a new car or a bigger home. Instead, wait until you truly need these luxuries, and by then you’ll be able to truly afford them. A lot of financial stress and debt are caused by trying to get things too soon and borrowing money to make it happen. The patient path is certainly slower, but it’s also safer and more secure.

The Beginning of Your Journey

The path to financial independence isn’t quick or flashy, but it is possible. The hardest part is actually getting started. I encourage you to begin today with one or two of the steps in this article and start building towards your dreams.

The journey of a thousand miles always begins with a single small step in the right direction. So don’t wait until tomorrow, or next week, start planning your future today.