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Financial Freedom

Financial Freedom

Why I’m Choosing FIRE

Why I'm Choosing FIRE

I’ve been on my debt free journey for 3 years now and honestly, it’s taking a toll on me. I’m ready to be done with it and moving on to bigger goals. I’m excited to have my debt paid off, but I’m so ready to actually keep my money!

This journey is definitely hard, seeing all of my money going to debt is rewarding, but it still kills me to see all the money that goes to interest. I can’t wait for the day when interest is something that only makes me money, not costs me it.

Seeing my debts go down and the interest lower definitely is rewarding, but what has really kept me motivated lately is what’s to come once this debt is paid off. I’ve been doing a lot of research and I can’t wait to put my plan to action.

What is FIRE?

FIRE means Financially Independent, Retire Early and it’s a movement that I totally can get behind. It basically means that you live a life of financial independence, not controlled by money. Most people that support this movement don’t actually retire early, but they do work that they enjoy because they don’t need the money that comes from the work that they do. FIRE allows people to live the life they imagine for themselves because they are not tied down by money.

Why I’m choosing FIRE.

I’m still drowning in student loan debt, $97k to be exact, but I’m also still investing and saving money every single month. It’s not a ton, but it’s something. The reason I do this is because compound interest is on my side right now as a 20-something. I also know that I want something more for myself than just going to a job I hate everyday, so I’m starting to plan for my future now.

This is exactly why I’m choosing FIRE. I don’t plan on actually retiring early, but I do plan on doing work that brings me joy and doesn’t require me to need a certain salary to live. Everything I do is leading me to achieve FIRE, so that I can live a life that I choose, instead of one that is ruled by money.

How I will reach FIRE.

This is the part that makes me so motivated to pay off my student loans. My first step to reaching FIRE is paying off all of my student loan debt. This is a long road, which is why I am investing a small amount every month still. Throughout paying off my debt, I am budgeting every month and have found the things that I truly value. By finding what I value in my budget, it has allowed me to drastically cut my unnecessary spending.

This will be key in the road to FIRE because it allows me to have low expenses each month by living an intentional life. Once my debt is paid off, I will move my focus to saving and investing my money. By doing this, I will be able to live the life I want to live, instead of one that revolves around payments.

Choosing FIRE.

In the end, it all depends on what you want from your life. I personally want a life where I can do whatever work that brings me joy, or choose to do volunteer work. With my current finances, neither is an easy option for me. By attaining FIRE, I can do the things that I choose to do. Is FIRE something you hope to reach? How do you plan on reaching it?

Financial Freedom

Change Your Money Mindset

Money Mindset

We focus a lot on the logistics of tackling our money goals. How much debt, how much saved, what’s the game plan to tackle this as fast as possible?

But, there is one step that seems to be overlooked and it is arguably the most important step to make long term changes.

We can fuss about the plan and the numbers all day long, but if we have the same money mindset and habits, those won’t really matter.

Initial Money Mindset

A lot of people that are working towards financial freedom start with similar mindsets around money. They most likely feel like they have no control over their money and don’t know how to make it work for them.

They usually fall into the cheap mindset because they are in a never ending cycle of scarcity. You don’t have the tools you need to help yourself out of this mindset.

You are constantly thinking about what you can’t do or can’t afford because you don’t think you have the money to.

Usually, you are only thinking about day to day, week to week, month to month. You don’t have any long term money goals because your money has the power currently.

An example of this is being anxious about making it to pay day because you don’t know if you will have enough money to get you there.

Money Mindset Change

As you begin and move through your journey to financial freedom it’s important to do the work. Don’t try to skip steps by taking short cuts.

Sit down and track your transactions, make your budget (get my free templates by subscribing to my newsletter) and see where your money is going each month. If you try to skip doing the work, you’re not changing your habits and you’re not gaining the power over your money.

Take control of your finances and tell your money where you want it to go by using a budget. Once you have this power, you start thinking about money differently.

You no longer think, “I can’t afford this,” but, “How can I afford this?” You have control over your money and you tell it where to go.

You’ll notice that you no longer think about pay day as much because you know where your money is, where your money is going, and where it will go once pay day arrives. The anxiety around money has been lifted.

An Abundance Money Mindset

Once you have moved to an abundance mindset, you will find that you feel complete control over your money. Money turns into a tool, instead of something that causes fear, stress, and anxiety.

Taking the time to work through the hard parts is so important to changing your own money mindset. Without changing your habits and your mindset, you will be stuck in the same place you always were.

Financial Freedom

Being Cheap vs. Being Frugal

Being Cheap vs. Being Frugal

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There is a huge difference between being cheap, and being frugal. These two words get used interchangeably, when they really are completely different. Yes, there are some things that will cross lines, but for the most part they are very different.

Being Cheap

Cheap means that you never spend any money and watch your money very closely. When you are cheap you spend the least amount of money.

When shopping, you simply are looking for the cheapest cost. When in reality there are many other pieces in play when determining “cost.”

Being cheap is usually driven from a place of scarcity or necessity. You don’t feel in control of your money, so you feel you must hold onto it.

Being Frugal

Being frugal comes from a place of abundance. You have power over your money and know exactly where it is going.

Instead of thinking solely about price, you take into consideration multiple value points. You think about cost, you think about how it helps others, you think about how long it will last.

These are just a few points, but you get the idea. Being frugal is being wise with your money and consciously choosing to be frugal with it.

Being Frugal vs. Being Cheap

An example of the difference between being cheap vs. being frugal that I experienced was bringing water to work. I would buy the cheapest water bottles I could find to refill when I was on the go in graduate school.

I was busy. I worked 8-3 and then had class from 4-7 every single day. I was working full time and attending school full time and making a measly $1,000/month on average.

What I found was that I was needing to buy new ones regularly because they were constantly breaking. I was living in a scarcity mindset because I didn’t have any extra cash each month.

Once I graduated, got my teaching job, and got my finances in order, I was able to move towards an abundance mindset. I no longer needed to live in this scarcity area.

I was able to see the other value points once I moved to an abundance mindset. My low cost water bottles I realized didn’t have much value because they were constantly breaking.

I took this into consideration, along with that they were always made from plastic, and researched higher value water bottles. Now, I’ve had mine for 3 years and it has dents and scratches, but it still serves the purpose of holding water.

This is just one example, but it serves as a reminder that there is a difference between being cheap and being frugal. It is all about the mindset you are currently living from. What are your thoughts about being cheap vs. being frugal?