We often think about what will do next weekend, next month, next summer, next year, maybe even five years out. Perhaps we even make a real plan. Such as, detailing out a vacation, our son or daughter’s graduation party, a wedding or anniversary celebration. Financial freedom, however, seems a long off and perhaps insurmountable goal.
How often though, do you seriously think about your long-term future?
Imagining your life twenty, thirty or forty years down the road might be easy in superficial ways – living in a big house, owning a vacation home, driving your dream sports car. But possibly not so easy in concrete terms – how much money you will have, what you’ll spend every year, what city you will live in, and when specifically you can stop working.
Many of us then put off this seemingly long away and exasperating task of planning for our retirement years. And then we put it off some more.
Retirement savings aren’t started. Instead, we think “I’ll start saving next year, right now I want a new car, we’re outgrowing our home, and we deserve a vacation.”
Our health is not given proper priority…”I feel pretty good, and I’m only 10lbs over my ideal weight, so I’m not worried about what I eat. And exercise? I don’t have time for that.”
However, before you know it you’re in your 40’s and life’s churning faster and faster. If you are like the ‘average’ American, you may have started a 401k, IRA or other savings vehicle for retirement, but it’s woefully small in balance.
You still owe money on your home and have car payments, and you’re wondering if or how you should pay for your children’s education. You’re seeing your parents age and anticipating you’ll need to help them out someday.
Your weight’s crept up another 10lbs or so, and you’re now 20-25lbs overweight. Your blood sugar and cholesterol numbers are a bit high, and your energy level is pretty low. And that exercise? Yeah, you still don’t have time for that and most days you don’t have the physical or mental strength for it either.
The Sad State of Affairs
One reason I started this blog was to bring awareness to the lack of financial retirement planning amongst most Americans, with hopes of inspiring you to do something about it.
It’s reported that a majority of us are dangerously behind in saving for our so-called golden years and approximately half of Americans own no retirement accounts at all.
For a great “compilation” of retirement savings (or lack of retirement savings) research, please see The Retirement Manifesto’s article, “I’ll Never Be Able To Retire.”
Highlighting a need to improve our health today so that we have our health tomorrow is another desire of mine, and I hope to motivate you to get active and eat well through articles on this blog.
Data from a U.S. National Health and Nutrition Survey showed that less than 3% of Americans are living a healthy lifestyle. LESS THAN 3%!
Only 2.7% of the 4,700 study participants achieved 4 for 4 on the following measures:
- Eating a healthy diet; consuming 5 or more servings of fruits and vegetables per day
- Exercising moderately; 30 minutes of activity per day 5 times a week at a moderate intensity
- Maintaining a healthy body weight and body fat percentage
- Not smoking
As a country, we are eating too much sugar and unhealthy fats. Our consumption of grains, processed foods, sodium, alcohol, and medications are leaving us “Fat, Sick, and Tired.”
I’m concerned that many of us have heard these messages before but we still don’t understand how they apply to us, or we flat out refuse to believe that they do. We can’t or won’t visualize the cholesterol in our arteries, the vast amounts of interest we are paying on our debt or the effects of negative financial and physical stress on our health.
We still think we have time to concern ourselves with those things later. And in fact, I recently wrote an article claiming it’s never too late to make changes. However, the more time we wait, the less time we have to enjoy the fruits of our labor.
I finally got the message a few years ago and stopped waiting for another day to start. My husband John and I began simplifying our lives. We stopped believing that we must work for forty plus years to have enough money to retire and started pursuing financial freedom with a plan.
We also stopped believing we were doomed to take high blood pressure or cholesterol medication and gain a few extra pounds every year. Thus, we improved our diets and our lifestyle. Exercise activities were chosen for fun, as well as fitness, and we even engage in a little competition to keep it interesting.
Today I hope you get the message too. Financial freedom allows you to live your life on your terms. While we are not there yet, we can already see the benefits of that statement the closer we get to it.
Work stress doesn’t have the same adverse effects it used too; meaning we no longer feel the need to drink when we get home. We know where the money for our next vehicle will come from because we have the savings for it already.
Our retirement accounts are growing, and we understand the 4% rule. We are outlining plans for months-long vacations instead of trying to cram as much as possible into 1 or 2 weeks.
Wanting Better Choices
Financial freedom brings options. Choices that debt, minimal savings, and unhealthy lifestyles don’t offer us.
- working into our late 50’s or 60’s because we want to not because we must
- leisurely travel for 3-6 months in an RV to see the tremendous splendor of the United States versus seeing a different area of the country in one or two-week snippets every year
- spending time with our kids and any grandkids instead of spending time at the office
- growing a garden instead of having to build our careers
- enjoying our habits any time and day of the week versus reserving them for nights and weekends
- seizing opportunities instead of being chained to a cubicle
Your choices may be vastly different from ours, but you’ll never get to make them unless you do something today. Then continue to do something tomorrow, the next day, and then each day beyond that.
It’s not easy. You’ll have some difficult decisions today, like eating at home instead of at the restaurant. But wouldn’t that be better than making the tougher decision in your 70’s of eating breakfast or lunch because you can’t afford both?
As well, deciding between spending 30 minutes on exercise or 30 extra minutes watching tv now, will be much easier than spending hours in the doctor’s office or hospital later.
Where you start depends on your current stage of life, what your current earnings and net worth are, and when you want to stretch your freedom wings. The older you are, the more you have in debt, the less you have in savings, or the shorter time frame you give yourself, the more radical the measures you might take.
Financial independence is the state of having sufficient personal wealth to live, without having to work actively for basic necessities. For financially independent people, their assets generate income and/or cash flow from dipping into the assets that is at least as great as their expenses. – Wikipedia
As I mentioned previously, we are well on our way to financial freedom, but we are not there yet. Where did we start? In our mid-40’s, newly married to each other with five kids between us – 4 young adult children and one, now 15-year old, John still financially supports.
We had not completely ignored our retirement savings, and we did have nice 401k contributions from our employers. I had also found the right house at the right time (2011) and was able to capitalize on its increasing equity in 2014 when we sold it. Thus, we had a positive net worth at the start.
Along The Course
We now own a different home in another city, have different jobs and received a small inheritance -under $40k. As first mentioned in a previous post since early 2013, John and I:
- Eliminated all non-mortgage debt; more than $90k of auto and personal loans paid off!
- Established an emergency fund equal to 3+ months of expenses
- More than doubled our retirement savings
- Increased the value of our primary home over 30% through DIY improvements
- Purchased a 2nd / future retirement home
- Improved total net worth more than
140%now 200% (thank you market!)
In April of 2015, John and I began working for an employer that does not offer any 401k contributions or matching, but we are earning employee stock options (worth a minimal amount now and probably not ever a substantial factor.)
We both recognize we are blessed with well-paying jobs and so we do all that we can to make the most of those earnings. We save a considerable amount – maxing 401k contributions ($24k for John/$18k for me) and Roth contributions ($6,500 him/ $5,500 me) first and then also invest in taxable accounts.
Our spending is on things we deem necessary with an occasional treat, and we donate to charities we believe in. We don’t spend on mere wants now because we desire financial independence more.
More specifically we do things like:
- Drive vehicles that are 10 and 22 years old
- Cut our hair at home and find color in a box (me not John)
- Prepare more than 95% of all our meals and drinks at home; breakfast, lunch, dinner, and refreshments, except for provided coffee and tea at work
- Eat mostly organic fruits and vegetables, grass-fed meats, and no added sugars or highly processed foods
- Do our own home maintenance, lawn care, and updating projects
- Wash our cars at home
- Shop at thrift stores and the occasional garage sale or flea market
- Upcycle used items instead of buying new – tables, chairs, dressers, lighting fixtures, decor items, etc.
- Borrow books from the library
- Use a digital antenna and Hulu for television viewing; No paid cable or satellite TV
- Redeem digital coupons on groceries
- Grow herbs and some vegetables
- Find free or low-cost entertainment and recreation; hiking, kayaking, playing board games and cards, free concerts in the park, and more
- On the rare occasion, we do go out for a movie or other paid entertainment we capitalize on matinee or off-season rates
- Walk or engage in some other type of exercise activity nearly every day
- Pack homemade snacks and most meals for road trips
- No spend days are a continuous occurrence for us, not a one month’s challenge
- We don’t spend money on manicures, pedicures, the latest fashions, or gifts for each other
In short, we spend on our needs and only an occasional want today, so that we can afford to spend on our needs and more occasional wants for many tomorrows.
Financial Freedom Is Closer
Was it difficult to go from driving a 2013 Jeep Wrangler to a 2008 Ford Focus? Hell yes! But that one decision plus all the other money saving decisions we’ve done will make it easier to live a comfortable retirement a whole lot sooner than later.
When you can detach your self-worth from the car you drive or the house you live in, you can build your financial net worth a whole lot faster. Eventually, you’ll find financial freedom. And that will be a real game changer. For you, your family, and the rest of your life.
Stop procrastinating. Start saving and living healthier today. Continue tomorrow and some more tomorrows after that. You’ll substantially increase your ability to own and enjoy the rest of your future instead of a job and possible lifestyle disease owning you.
What will it take for you to start your journey toward financial freedom? Have you taken any steps yet? Comments, questions or suggestions? Please share below or feel free reach out to me here.
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As always, thank you for reading.