Happy 4th of July! This Independence Day I want to talk about something very important for your wellness: financial independence.
In the Achieving Financial Independence from Debt blog, we discussed what financial independence is and how to achieve it from debt. Today we will talk about why you should declare financial independence in the first place.
1. You need a safety net.
If you’re living paycheck to paycheck, you are at the mercy of whatever job you hold. As you could imagine, this is a not a good spot to be in.
It’s not uncommon for workers to get laid off. Even if you can file for unemployment, the compensation is often not enough. But if you’re financially independent, you have a much better cushion to afford your bills while still looking for a different job. You should have a minimum of 6 months worth of expenses saved and get substantial amount of life insurance if you have a family.
2. More time with loved ones.
Don’t let holidays be the only time you get to spend with your friends and family. If you’re not struggling with paying bills, you will have more time to devote to your loved ones.
3. Save for the future.
If saving for retirement and the future in general isn’t a priority to you, it should be. Working a 40-hour job can be grueling on the body, especially as you get older. Declare financial independence and start saving early so that you can work a full-time job as a choice when you are older, not because you have to.
If you are in your 20’s and 30’s, try to contribute 20% to your retirement plan. There will be opportunity in your 50s to contribute more, but why not take advantage of compounding interest?
4. You deserve it.
No matter your situation, you deserve financial independence. Don’t fall into the trap of shame and guilt that society teaches us we should feel about our money. Everyone deserves the freedom and security of knowing that their financials are taken care of.