Four years after my graduation I was working 50–60 hour work weeks, and at that time both my husband and I each had student loans, a shared house mortgage, and a new car loan to pay for every month. This did not yet include the recurring monthly bills we had for our home internet bills, utilities for electricity and water, our personal medical insurances, and phone bills for both myself and my husband.
What’s more, we had gotten married 2 years prior and had recently moved to our new home, which was a new build. That meant the house was bare-bones after completion and we had to pay to get it renovated to have even the basic necessities such as lights, fans, air conditioning, grills for the windows and doors, curtains and lastly appliances and furniture. We stopped short of getting monthly subscription fees of Netflix and cable, thankfully. We had enough money then only to furnish the bedroom, dining room and the kitchen.
I was 27 years old then.
And we thought this was normal. Normal, to have so much debt.
But I can tell you it did not feel good at all, whenever I was reminded of how much money we owed every month.
That meant that we could never stop working and that one salary alone was not sufficient to cover the household cost for the two of us. Not that we wanted to stop working, we were still building up our careers that time, but should anything befall either of us or if I had kids earlier on, I did not have the choice of stopping work to do something else or to care for the kids should there be no caregiver we trusted. We needed the money to sustain our commitments and lifestyle.
So that year was the start of our financial journey. My husband and I started to look into our family finances and created a simple excel sheet that included our monthly salaries, all our household commitments and how much we spent every month. We started a very basic budget tracking that showed how much we spent and saved every month. This excel spreadsheet has since then grown and ballooned to cater to the tracking of our debt repayments, career projections, our investments, retirement savings, children education funds and so on.
The first loan to be paid up was my husband’s student loan. Next was mine. Later on we paid up the house loan, and the car. Mind you, this took years but we got there. Along the way, we had 3 children , which amplified my determination to get rid of the household debt. At current, unfortunately we are still not ‘debt free’ as we still have one more commitment of a second property which I foolishly invested in that ultimately did not turn out well and is still yet to be completed at current.
The point for this article, is to talk about the reason we did it, why we pushed to reduce our debt and got our finances in check. We did not go about it as aggressively as some others would, but we made a plan and we reached the goal together. While we were already on this journey, I learned about the term financial independence or FI, back in 2018 after my second child was born. The principals and reasons for the why behind the need to achieve financial independence resonated with me and it matched my own personal goals.
Financial independence means reaching the point of having enough money or income to pay for your own living expenses for the rest of your life without having to be employed.
Acronym for this is FI. There is also the Financial Independence Retire Early movement, or FIRE for short. The difference for FIRE is that after achieving financial independence, you may retire from your main job and not work again. Or you may choose to do different work.
Now why is this so appealing?
The key word here for me is choice.
You have the choice to stop working, or to do other works that may be less profitable but of your preference, because you do not need to work for money.
And when you do not need to work for money, but are working out of interest or motivation for a passion project, it does not really feel like work does it.
As for working mothers, you now have the choice to stay home to be with the children, if that is what you want to do. You do not need to rely on babysitters or extended families. You get to dictate what they do at home and how to bring them up, and not others. You get to have another child, if you and your partner wish to, as you are both financially capable to and physically available to care for your baby yourself at home.
You have the choice to spend more time with family, to take your parents for that vacation you wanted to, and to spend longer holidays with them instead of relying on leave application approvals from your manager. Or, worrying about income from your own business if you took extended leave.
You get to be a part of or even start new projects you never had time for and but are passionate about, be it theater, scuba diving, joining community relief projects or start a small business selling hand painted pottery, or carpentry or photography, for example.
You may finally have time to write that book you always thought of, and not worry about it selling well, because you do not need the extra money and you can stomach the sales rejection and failure.
You worry less about your own and your families financial security, when you have the money in place for emergencies and crisis.
You have flexibility of time, whereby you choose the hours you work and you can be specific about which clients you want to take on for your business.
You even get to bless others with monetary aid, to pay for a struggling friend’s child education fund, medical bill, or gift money to a single mother who is in need at the moment.
Does this sound attractive to you?
To have an end goal of financial independence and to make work an option.
One thing to note, is that most people who worked hard to achieve financial independence, usually will not retire from working when they reach FI, but instead they will find other work that is more appealing to them. They will fill their time with other works and projects of their choice.
Personally for me, my current job still has growth potential and I may not choose to stop working should I reach the point of my own financial independence, but the option of having more time off work or to stop if ever I want to, is appealing enough.
The steps to achieve financial independence takes time and planning, and its best to be realized earlier in your career. There are many articles on how to achieve it, but at least in this article we start with the why. If this path appeals to you, I wish you all the best in your financial independence journey.