What are you willing to do to live life on your own terms?
Maybe you’re willing to work 2 jobs to save enough money for retirement? Or read hundreds of finance books until you become a master at personal finance? Whatever the case may be there’s going to be a catch to reach financial independence.
If it was easy to reach financial independence, wouldn’t we all live happier lives? The biggest problem I’ve seen and that I’ve personally been guilty of is having the short-term mentality. That’s probably why 2/3 of Americans are in debt.
I didn’t realize how dependent I was on a steady paycheck until I’d calculated all of my monthly recurring expenses. I’d spent most of the money on unnecessary items, and had a little leftover to save. To be honest I’d barely survive a month without a job.
Having multiple subscriptions, and keeping up with my peers was the norm for me. I didn’t want to be that oddball who was considered to be cheap. I had big visions for myself, but it felt like I was part of 2 separate worlds making little to no progress.
You are the average of the 5 people you spend the most time with, and because of this, I lost some friends along the way. I also canceled subscriptions, and let many people “pass me up” on buying luxury items. These are just some of the many sacrifices that I’d had to make to continue making progress in becoming financially free.
Be prepared to make some sacrifices along the way as well.
Defining Your Lifestyle
Before you know what you’ll need to sacrifice determine your desired lifestyle.
Personally, I wouldn’t enjoy wearing the same plain shirt every single day just to save a few bucks. There’s nothing wrong with this approach, but it just isn’t my preference. Become specific on how you picture your dream life.
Do you really want to wake up with 10 foreign cars in the back of your garage? Realistically speaking this will be hard to do, but it’s possible. However, I’d say pick a more meaningful reason behind your desired lifestyle.
With this approach, you’ll find what’s really required to make you happy beyond just the money. Money can buy you happiness, but not your entire happiness.
You can start by asking yourself these simple questions:
1. When do I plan to retire?
2. How do you want my job to fit around my life?
3. How much money do I currently require to survive?
You find out more about defining your future here.
Force Good Money Habits
By this point, you’ve got an idea on how your ideal lifestyle will look like.
Now you have to work backward towards your freedom number. This is where the sacrificing will begin.
1. Remove expenses, such as subscription services
Decide which expenses are truly necessary, and which ones are a luxury.
Download Personal Capital, and track your net worth like your life depended on it
Chances are that you won’t nail your expenses all at once. Start with one service or expense and track your savings at the end of the month. Repeat this cycle until you can’t remove any more expenses.
Once you reach this point get even more creative and find ways to reduce the cost of your truly necessary expenses.
2. Focus on paying down debt.
Create a strategy to pay your debt off. Review your finances and determine how much you’ll have leftover to pay the debt after each paycheck. If you’re clueless to which debt you should focus on, then read on how I was able to pay off $5,500 in credit card debt.
If you’ve determined that it will take you 2 years to pay it off and you’re unhappy with this news, then focus on paying it off faster. How? Working your ass off.
If your current income is limiting you from paying down your debt faster, then find side-hustles that can provide an extra $50-$300 each week. You can also sell unwanted items through eBay or Amazon.
When there’s a will there’s a way.
You can grab a list of my top 7 side-hustles below. I’ve personally experienced some success with some of these side-hustles.
This is the stage where you’ll be reaping the benefits of all your hard work.
Similarly, to you, I’m also working my ass off to get this stage. Reaching financial independence is hard work, but It’s worth it.
You can work hard at your current job to receive a steady paycheck, or you can create multiple streams of income that can keep growing. Start doing what most people won’t do to live the life you desire. This may mean letting all of your friends “pass you up” on buying luxury things right now.
Just as with anything in life sometimes we are forced to make sacrifices that aren’t easy. While at the moment they may seem hard, in the long run, they are necessary to achieve financial independence.
If you think that you have nothing to sacrifice, think again.
I thought I was doing fine until I became brutality honest with myself, and realized that a many things wasn’t just magically going to happen. I wasn’t going to become debt-free one day, I had to create a plan to make this happen. I wasn’t magically going to wake up one day with an awesome business idea, I had to focus on creating one.
Start by being honest with yourself on the lifestyle you want to create, and begin working backward. For example, if you want to be debt-free in the next 2 years, vs. someday then you know you’ll have to make drastic changes to make this happen.
You can’t expect to live debt-free and spend hundreds of dollars on “want” luxury items each month.
Focus on decreasing your expenses and increasing your income. Create multiple streams of income, so you won’t be devastated when one of them dries up.
It wasn’t until I defined the lifestyle that I wanted to live, and was completely honest with myself that I realized I had to make sacrifices. It may seem good to “feel” like we’re making progress with our goals without making many sacrifices, but if our goals aren’t defined they’re just dreams.
I know that you’re willing to put in the hard work to become financially independent.
Just imagine working when you want, and feeling confident about your financial future. It makes it all seem worth it.
What sacrifices are you going to start making today?