updated September 11, 2022
When my husband and I started getting into the F.I.R.E. movement back in 2020, it was not met with the enthusiasm I had hoped for by our family and friends. They seemed to find the aspect of financial stability worthwhile for praise, but once I brought up the word “retirement,” they looked at us like we were crazy. I could even feel some people lose respect for us, probably thinking of us as lazy and apathetic.
Then again, if a couple in their late 20’s who had only 4 years of their career life under their belt told me that in 2019, I would have thought they were crazy, lazy and apathetic too.
I want to share my personal “Why of F.I,” so that you can understand the deeper meaning behind why financial independence is the goal.
To Be in Control of Our Finances
In 2019, we didn’t have a budget at all. I couldn’t tell you how much I was contributing to my 401(k). Hell, I couldn’t even tell you how much I made and took home every paycheck. I spent my money frivously without any thought behind why I spent money on certain things. We had zero control of our finances
When the COVID-19 pandemic hit in 2020, and we found ourselves with less income coming in due to losing hours at work, we realized that we needed to make a change. We finally sat down and had the money talk. We learned how much we were actually making, both our gross income and our take-home end result after taxes, retirement contributions, and health insurance. We looked over our spending habits in the last 3-6 months, and saw how much we were truly spending on eating out multiple times a week, how much craft beer we truly consumed, and other miscellaneous non-essential items. Through ChooseFI’s “Baby Steps of FI”, we learned the most important step of starting the path to F.I.R.E. – tracking our money.
Now if you asked me about our financial picture, I can tell you our combined take home pay, where our budget lies, our savings rate, and much more. Being educated on our personal finances really helped us get a better understanding of where our money comes and goes, which helped us gain back control of our finances.
To Have Financial Stability
As we make our way down the path to F.I.R.E., it has given us a sense of peace to know where we stand financially. No, we aren’t at F.I.R.E. yet, but that’s okay! We’re still young and we still enjoy our careers.
We are free of debt, and are able to pay off our credit cards in full every month. We have enough in our savings account to get us through about 6 months of living expenses in case we lose our current stream of income. We have more money invested in a variety of things, such as low-cost index funds, employer funded 401(k) accounts, individual roth IRA accounts, and yes…a little bit of crypto, because why not? We are in a good place financially, and having this stability is a huge relief.
Compared to where we were financially 1-2 years ago, we are in a much better place. A couple years ago, I couldn’t even begin to tell you how much debt we had, how much our net worth is, and I had no clue how much we saved every month. Learning about F.I.R.E. has truly been a blessing, as it helped us have peace of mind with your financial situation.
To Have the Freedom to Enjoy Life Without Feeling Tied Down to a 40+ hour/wk Career
Now when I say the word “retirement,” most people think of moving to Florida, sleeping in, watching daytime television programs, and drinking mai tais on the beach for the rest of your life.
F.I.R.E. has taught me that the word “retirement” also has a different meaning. You can “retire” from your 9-5 weekday office grind, and instead use that time to pursue a passion project. Maybe you love to knit dog sweaters, and want to try out starting your own small business and sell them on Etsy. Except you never took the plunge, because you’re worried that you won’t have the financial cushion to back you up in case this business endeavor does not go as planned.
Or you love your career! But now you have children, and you want to be able to pick them up from school and coach their little league team during the week. You would consider dropping down to a part-time 20 hours a week schedule, to accommodate for your kids’ school and extracurricular schedule. But you’re worried by dropping down to part time, you’ll make less money, and you won’t be able to support yourself and/or your family.
Or you need a little break. As allied health professionals, compassion fatigue is a real and prevalent issue. You love your job, but you feel that you need a break and a reset to help you remember why you decided to go into your profession. Maybe you’ve always wanted to live abroad for a little while, learn a new language, or take the kids across the country in an RV to show them the beauty of the outdoors. But you’re worried that by quitting your job for a few months, your income stream will be drastically decreased, and you won’t be able to support yourself and/or your family.
When you’re on the path to F.I.R.E., and you have control of your finances and financial stability, all these options are possible! You won’t have to worry about your income stream, because you understand where your money comes and goes, and you have a financial cushion behind you in case something goes awry. You can plan for these mini “sabbaticals”, working part time, or pursuing passion projects, because the path to F.I.R.E. gives you that freedom.
To Fully Retire Comfortably Without Financial Worry
Maybe you love your career and you work full-time, and you want to do that until your retirement age. According to the National Academy of Social Insurance, currently the full benefit age is 66 years and 2 months for people born in 1955, and it will gradually rise to 67 for those born in 1960 or later.1
However, for me, when I get to that age, I don’t want to rely on social security to get me through my retirement years. I want to be at a place financially where I don’t have to worry about where my money will be coming from that month. The path to F.I.R.E. has given us a clear view of how much we need to retire comfortably, and how far along we are to reach that goal.
Before F.I.R.E., I just assumed that I would retire in my mid/late 60’s and BOOM, it’s all over and done. But there is some planning that leads up to this point. It’s scary to think about about much people in retirement have nothing saved or invested, and plan to depend on social security and pensions. As a former volunteer for a non-profit that helps seniors to live independently in their own homes, I found that many of the seniors I worked with were living in poverty, because their social security and pensions were all they had, and it did not allow them to live the retired life they had dreamed of.
F.I.R.E. has helped us to feel prepared to retire when that times comes. Sure, we may not be at that point yet. But knowing that we’ll be ready when that time comes is a great feeling to have.
So I hope this paints a better picture as to why we choose to pursue financial independence – to be in control, to have stability, to have freedom with my career, and to be able to fully retire in peace are all good reasons. But if you truly want to pursue financial independence, and to be successful, you need to understand your own personal Why of F.I.
Take this time to reflect…why are you interested in pursuing financial independence?
If you want to learn more about financial independence, or if you want mentoring in your finances, let’s work together to help you on your personal finance journey! Click here to sign up for your FREE 20 minute consult.
Note: I am not a certified financial advisor/planner or a certified financial analyst or a CPA or an accountant or a lawyer. Remember, I am an allied health professional, just like you! This website/blog is for entertainment and educational purposes only. Please consult with your financial advisor(s) regarding your personal finance, investment, and tax matters.
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