Why Financial Independence is the Right Path for UsSep 07, 2021
Financial independence (FI) is the status of having enough income to pay one's living expenses for the rest of one's life without having to be employed or dependent on others. A lot of people focus on the number you need in order to attain FI which is subjective to one's lifestyle, goals, and budget (ahh, the budget again). More than the number, the journey to FI offers emotional and financial freedom leading to increased financial health, satisfaction, and well-being.
For the last 5 years my husband and I have cultivated a FI mindset and integrated the value of FI into our marriage. To date, this is why it is the right path for us.
I will never forget the first time my new amor (now husband) asked me about my salary. It was very early on in our dating relationship - maybe 2 months. We were at local restaurant, Phaya Thai, in Sacramento having dinner. Thoughts raced through my head such as "what a peculiar question this early on. Does he see dollar signs when he looks at me? What is his angle?" I was nervous, stuttering, and there was a knot in my stomach. As much as it was awkward to answer, I equally wanted to know how much he made and more importantly how he spent his money. We disclosed what we made and it launched us in to many more conversations about money, our jobs, and our hopes for the future. We realized that we both spent less than we made, that we were good savers, and that we wanted to feel in control of our money. As children of divorced parents, we both experienced financial strife early in our lives. This experience shaped our thoughts and beliefs about money, especially in the context of trusting another with our money. We set an intention to do things differently but how to do it was something we had to and continue to learn.
We Financially Dated
In our first year of dating, we listened to financial podcasts, audio books, and radio talk shows. From these mediums we learned about living debt free and FI as well as Financial Independence Retire Early (FIRE). FI was exciting but the RE? It was a peculiar question I hadn't thought about, "would I retire early?". I am in the human service field and never really saw myself retiring but my husband had his sights set on retiring early. It is one of his goals. These discussions helped us to connect. We communicated about money through these dates and we grew to have a deeper understanding of each other's money history and beliefs. More importantly, it helped us to unmask financial fears of combining finances one day in the future thus creating trust as we deepened our relationship.
Working towards FI gave us clarity. After dating for several years, our relationship was moving towards marriage. Designing a life around the goal of FI was becoming a priority so we set forth in building a framework. The framework (which we put together ourselves based on our situations and information gleaned from the personal finance community) reflected our values of security, generosity, independence, and adventure. Once married in 2016, we combined our finances and set goals for following a budget, having an emergency fund, increasing our savings rate and salaries, identifying and investing in retirement vehicles, paying cash for purchases/staying out of debt, and paying off our house. We also gave ourselves an ideal date of FI (about 10 years). The date correlated with my husband reaching the "golden handcuffs" at his job.
Saying that, as much as we want to achieve FI we also want to live out our values in present day and make financial decisions that support those values as needed. We aim for balance. The framework and subsequent goals keep us focused and bring us financial and personal satisfaction. We meet monthly for our "money date" where we review our goals and our financials. We still find it hard to believe (having checked with several financial planners:) that we are indeed on track.
It Gives us Options
Pursuing FI gives us options and confidence. For example, One of my goals was to start a private practice blending my mental health expertise with financial planning competencies. A few years in to our journey, with a healthy savings in place, I was able to slightly reduce my full-time hours to start my practice. Beyond a growing practice, I have been able to expand my business to include consulting and coaching further reducing my once full-time job to part-time. Another benefit of designing our life for financial independence is being able to help others more whether through donation of time, resources, or money.
The FI journey has also made us more agile. During COVID-19 lockdown, we decided to make a big purchase that was near and dear to us - a converted sprinter van so that we could travel and experience more of the US while our child is young. We originally planned to do this after my husband retired. Although a chunk of money during unprecedented times, we were confident in our decision and our finances. 9 months in...best decision ever... we love van life!!
In summary, I believe that the path to FI brings not only financial freedom but connection, clarity, and confidence to your money that positively impacts your relationships financial health, well-being, and satisfaction.
If you are thinking about where to start with your financial health or your path to financial independence (check out my Pursuit of Financial Independence blog post) and want to work with me, please feel free to book a 20 minute free consult or check out my Financially Healthy Couples Program.
Questions: email [email protected]
Mariah Hudler, MSW, MBA, CFT-I™ is a financial therapist, coach & consultant, who provides premarital financial counseling, financial therapy, financial coaching & consulting, and financial wellbeing services. She works with individuals, couples, entrepreneurs, and groups to build their balance and create a healthy relationship with money.
Disclaimer: This blog is for education only. Please consult with a qualified professional when you have any questions about your personal financial, tax, or legal situation. Information contained in this post is for informational purposes only and not intended to replace professional advice.
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