Level 0: The start of my mission to FI

The beginning of my journey to create more freedom.

More freedom

Over 2 years ago I decided I wanted to have more freedom. Freedom to choose what I wanted to do with my time. Not having to get up super early day in day out to go to work, spend all my productive time in an office, work extra hours whenever this was needed (and working in education means there are ALWAYS extra hours needed!), to then come home being too tired to do stuff I actually enjoyed.

It’s not that I didn’t like my job, quite the opposite: I got (and still get) great please out of it and am able to shape my role in many ways. But whether I enjoy my job or not is not relevant: I decided I didn’t want to spend my entire working days for the next 35 year of my life in an office.

I wanted to be able to be more in control when it comes to my time. Being able to decide every day how long for, what to work on or whether to take a day off and go for a hike or a swim or a snooze or a picnic in the park or…. there are so many other things to do..!

Once I had determined this, an obvious problem arose:

“HOW TO CREATE MORE FREEDOM?” 

As I started reading more about my desire to create more freedom, I quickly found out that the best way to do so and get more control over your own time is by becoming Financially Independent. When you achieve Financial Independence, you have access to enough money coming in from passive income streams, that you no longer need to rely on your job’s income. Meaning you don’t need your job to pay your bills, which means that you can decide to do any job you want (or not) regardless of how much it pays. (There are in fact 8(!) stages of financial independence, you can read more about that in this article). Simply put, if you achieve financial independence, you no longer need to rely on working a full time job, which means you can free up a lot of extra time and freedom to do as you please!

Once I had the answer to the first question (how to become free) figured out, a second question emerged however:

“WHERE DO I START?”

This is where my search for a comprehensive guide began that would show me how to attain this freedom I dreamt about. As I learned with time, there are thousands of people out there who have the same aspirations to become financially independent and many others who have in fact already achieved this, yet the guide I wanted explaining how to do it all didn’t exist!

I looked everywhere on the web, Amazon, physical bookstores, podcast libraries… Nothing! No A-Z guide, 30 day challenge or 100 steps blueprint on how to become financially independent.

The 100 Steps Mission Book

Not wanting to give up my dream I decided that if that manual I was looking for didn’t exist, then I’d put it together myself. I wasn’t talking about WRITING a book, but about compiling ideas together that would be the substitute for what I was looking for.

Long story short… I DID end up writing a book. And as you might have guessed it became the 100 Steps Mission to Financial Independence. (I’m currently working with my editor to get it ready for publication.)

It’ll be out soon and I am convinced it can help many people looking for the same answers that I was looking for 2 years ago: how to get more freedom? More time to spend with my family? More time to travel? More time to do my hobbies? More time to volunteer or pursue a passion project? More time to…. to do anything you want really, without having to plan it around your busy work schedule and commitments! It will give you all the answers you are looking for and is a step-by-step guide you need in order to create that life you really want.

Until it’s out (around June 2018), I’ll be documenting my own experience implementing these 100 steps on my way to more freedom, so you can see how each little step has helped me get closer to my target of more freedom every day. Feel free to join me on this mission to start creating more time for you and your family too and let me know how you’re doing in the comments below.

The Health / Wealth Balance

How Investing in your health will also lead to more wealth
How Investing in your health will also lead to more wealth
The Health / Wealth Balance

Yesterday, on the last day of January (where did that first month of the year go??), I came across two interesting articles focussing on the link between health and wealth. I’m always super motivated to improve my health and in fact one of the main reasons to aspire FI is so I can hopefully enjoy more free time when still in great health.

Anyway, back to yesterday. What made these articles so interesting was that both focus on the importance of investing in your health and the compounding effects this can have long term on both your health as well as your wealth.

The first article: 30 Times and Then You’re Dead. Unless… How to Get Rich With Exercise, by FIIntrovert shows exactly how important it is to invest in your health if you are in fact  pursuing FI. If you are weary of spending too much money on your health, then I greatly recommend this article. FIIntrovert has made several calculations on how spending money on your health will over the long term not only benefit your health but also your finances. It’s really worth a read if you are needing a little extra motivation to look after your own well-being!

The second blog post was the announcement by Smart FI to join his February Plank Challenge: The idea being that you do a plank every day, starting with a minute and slowly increasing the amount of time each day. In his words: “The underlying theme of the challenge is that small incremental improvements over a month or a year lead to big changes.” I love how this of course applies to both your finances as well as your workouts. His post was also a call to other FI bloggers to join his challenge, so I decided to join too.

So here I am at the start of February with 28 days to do a plank a day ahead…! I’m very excited, as I have been wanting to focus on my health more anyway, so this will hopefully keep me motivated. As I write this post I have just done my first plank – unfortunately a minute was a bit too long for me, it ended up being 30 seconds… I hope to be able to increase this by a few seconds each day to 3 minutes at the end of February. I’ll keep you posted.

And if you are still interested in joining this challenge too, make sure to hop over to Smart FI’s post and let him know you are joining, as he’s got a blog roll / accountability listwith everybody participating.

Here’s to a good start of February and some new fresh goals to work towards!

Multiply your savings: A crucial step to attain financial independence

Today I am excited to introduce Patricia Sanders, who wrote the following guest article for 100 Steps Mission:

You can’t be financially independent if there is not enough money in your savings account. Job is not a piece of cake and you won’t get a pay hike several times in a year. A new job can give you a better package but this doesn’t necessarily mean your savings will improve. There are lots of factors to consider. For example, suppose you have to relocate for this new job, which means extra expenses. Unless the paycheck is very high, your savings won’t increase.

When you think about taking up a new job, you should research on the employee benefits minutely. What kind of benefits can you get from the new company? Will you get health insurance benefits, life insurance benefits, and transportation reimbursement? The less you have to spend on these, the more money you can save.

Let’s us discuss the other possible ways to multiply your savings because you can’t be financially independent otherwise.

How to jump-start your savings

You can’t retain your financial independence without improving your savings. You’ll always be dependent on someone for covering your expenses if there isn’t sufficient money in your bank account. If you’re a student, you’ll depend on your parents. If you’re working and don’t have enough savings, you’ll be dependent on credit cards for taking care of your emergency expenses. Recurrent fights over money issues will occur between you and your spouse.

  1. Avoid using credit cards excessively: Instant gratification is not good for your financial health in the long run. You can purchase anything you love with credit cards. But think carefully. If you can’t pay credit card bills later, then you’ll be in debt. Try to pay your bills in cash so that you don’t have to pay additional interest.
  1. Cut down your expenses: Make a list of your monthly expenses and find out how much you’re spending every month. Pick that one expense you can avoid every month. For instance, you can have a cup of tea in your home instead of buying it from outside. Cook a healthy meal at home and have it in your lunch. You’ll save minimum $600 every month. You can use this money to increase your savings.
  1. Love and follow your budget: Your monthly budget helps you track your income and expenses. Don’t ignore it. Make it your goal to stick to our budget every month. Set an amount you have to save every month. Suppose, you decide to save $800 every month. In that case, cut down on any expense that stops you from reaching your saving goal.Don’t cover extra expenses from your savings. You’ll need the fund for your rainy days.
  1. Create an automatic savings account: Do you lack the discipline to save money? It’s quite easy to forget about saving money when there are so many lucrative ways to spend money. The best way to improve your savings is to automate your savings.

How can you do that?

It’s simple. Get a percentage of your paycheck deducted automatically every month and deposit it into your retirement or savings account.

The best part of an automatic savings account is that you don’t need to remember yourself about depositing a specific amount into the account every month. You can save consistently. You’re not losing money. Rather, this money is increasing your savings gradually.

  1. Stop impulsive shopping: Create your shopping list and stick to it. Don’t make irrational decisions when you’re shopping. Don’t get lured by the attractive deals. Don’t purchase things unnecessarily. You’ll see lots of items in the sore. But do you really need everything? Think carefully. Why should you waste your hard-earned money on something that looks good but is not useful?

Conclusion

One of the primary steps you need to take for attaining financial independence is to increase your savings. It doesn’t matter how much you can save. The important thing is that you can save some amount every month. It’s a habit. When you eliminate extra expenses and lead a frugal life, your savings increase automatically. Just don’t misuse the money you save, You can use it to make a down payment on your new house or can use it to help your child cover his/her tuition fees.

Patricia Sanders is a financial writer and a blogger as well. She has been associated with DebtConsolidationCare for a long time. She writes regularly on her personal blog yourcardinalpoint.com on a variety of topics and she also contributes her valuable posts to different financial communities, blogs and websites too. You can also check out her social media profiles on Facebook and Twitter for more information.

Day 31 / 31 Set Goals and Visualize your Dreams

Day 31: Set Goals and Visualize your Dreams
Day 31: Set Goals and Visualize your Dreams
Day 31: Set Goals and Visualize your Dreams

Congratulations!! You’ve made it to the last day of the 31 Day Challenge to Financial Excellence! Some days might have been easier and others more difficult, but you held on and continued until the end. That’s a good sign as it not only means that you’ve probably made some huge progress in many of your financial areas, it also indicates that you are much more likely to appreciate the progress you’ve made and to keep up giving financial planning a prominent place in your life.

And that is also the very last challenge of this series: to set goals and to visualize your dreams in order to keep moving forward even now you’ve come to an end of the 31 Days. Continue reading “Day 31 / 31 Set Goals and Visualize your Dreams”

Day 30 / 31 Your Children & Finances

Day 30: Your Children and Finances
Day 30: Your Children and Finances
Day 30: Your Children and Finances

Whether you have children on your own, grandchildren or (adopted) nieces and nephews or plan to have children at some point in the future, you can play an important role in educating these children financially, especially taking into consideration how little most schools incorporate personal finance into their curriculum.

Save money for your children

The first thing to do, is to set aside some money in a savings or investment account (again it doesn’t matter how much or little) so you can start growing some money for your children. Not only will this once they are a little older give you a great topic to discuss with them to show them the power of compound interest, it also makes for a great 18th, 21st or wedding gift. Continue reading “Day 30 / 31 Your Children & Finances”

Day 29 / 31 Give to Charity

Day 29Day 29 of the day Challenge to Financial Excellence
Day 29: Give to Charity

I think we all appreciate that we “should” give to charity and help improve the lives of others and make this world a better place.

Giving to charity does not have to cost you hundreds of dollars a year. It is just like saving money: start with it early, even if you can only contribute $1 a month, or $10 a year. Not only is that still $10 a year, it also gets you into the habit of giving, so that every time you have a little more money available, it will be easy to also increase that contribution, even if it is by just a small amount, to make space for it in your budget and to remember that there are so many who are less fortunate than you and to whom your (however small) contribution can make a considerable difference. Continue reading “Day 29 / 31 Give to Charity”

Day 28 / 31 Celebrate your Victories

Day 28: Celebrate your Victories
Day 28: Celebrate your Victories
Day 28: Celebrate your Victories

During the past few weeks and in the next weeks, months and indeed years, you hopefully will have and will continue to set new financial goals. Setting goals is one thing, but achieving them is a whole different matter. Goals are usually easy to set and difficult to achieve and require real commitment and dedication. As you continue on your journey to financial excellence, your goals might become bigger and more abstract which in turn makes it more difficult to see your daily efforts paying off.

You can make goals more tangible by not focussing on the end goal but on smaller milestones along the way, making it easier to see progress.. Then – and here is the most important part – you should celebrate your victories. Once you have got together half, a quarter or even just 10% of your $10,000 savings goal – celebrate. Continue reading “Day 28 / 31 Celebrate your Victories”

Day 27 / 31 Organize your Administration

Day 27: Organize your Administration
Day 27: Organize your Administration
Day 27: Organize your Administration

Now that you have almost got to the end stage of the 31 Day Challenge to financial excellence and have hopefully made huge progress on various areas of your financial life, one of the worst things is to have your finances all in order and then not being able to find important financial documents when you need them, such as insurance policies, warranties, bank statements or income stubs for your tax return. 

Having a proper, up-to-date and easy to understand filing system, does not only guarantee less stress and time lost when you are looking for things, it also ensures you do not waste money for example on a new product if your old one still has a guarantee on it. It allows you to quickly check you still have the right insurance, update your assets, debts and cash flow and makes is easy to check your credit card statements are all correct. Continue reading “Day 27 / 31 Organize your Administration”

Day 26 / 31 Update your Estate Plan

Day 26: Update your Estate Plan
Day 26: Update your Estate Plan
Day 26: Update your Estate Plan

Today’s challenge may not be the most cheerful of the ones to busy yourself with, but estate planning should be high up on your priority list of financial planning, no matter how old or young you are.

Estate planning is about taking the necessary steps now to arrange for what will happen to your inheritance for when you pass away as well as making arrangements for who is to make key decisions in case you no longer can.

There are 6 key parts you should arrange as part of your estate planning, which include: Continue reading “Day 26 / 31 Update your Estate Plan”

Day 25 / 31 Audit your Insurance

Day 25: Check your Insurance
Day 25: Check your Insurance
Day 25: Check your Insurance

Risk management and insurance is an important part of financial planning, although surprisingly often overlooked. Many feel insurance is boring, complicated or not needed and years of careful financial planning amounts to nothing if a small oversight on your side leads to a financial disaster for you or your family.

Choosing which types of insurance you need, which ones you do not and making sure that the ones you have are still up-to-date and applicable to your current situation can be a bit of challenge though, which is exactly why it is our challenge for today! 

An insurance is essentially a financial protection you contract against the risks of a possible loss. Below are the 5 most common types of insurance you might need: Continue reading “Day 25 / 31 Audit your Insurance”