In the FIRE community, some common beliefs are followed (some of which I find very extreme). (a) invest aggressively (50%-75% of your income); (b) get rid of debt; (c) use cash instead of a credit card; (d) retire early (in your 30s or 40s), (e) live on 4% of your investment during retirement years. I don’t think the goal is to do all or nothing. You can do what’s possible in your particular situation. You just need to be more intentional about your choices and how they affect your future.
What Are Doing Differently?
I don’t carry debt; I save, I invest, but I don’t use a budget, and I use a credit card. There is nothing wrong with playing differently as long as you understand the game. Most of us didn’t grow up with money or parents who knew/though us how to manage money. You can’t use that as an excuse for the rest of your life. Acknowledge where you come from, but don’t stay there. You have what it takes to succeed. Yes, it might be harder for some than others, but it’s possible. Don’t feel so defeated that you don’t even try.
With that being, I have a few unpopular things that I’m excited about:
Credit Card Usage
I use a credit card; not to buy things I don’t have cash for but to avoid unnecessary exposure to fraud/ theft. I don’t know about you but giving my debit card over the phone or online shopping turns my stomach. Credit cards are not for everyone. The money on those cards is NOT yours. There is a cost associated with borrowing money; if you can’t afford the item with cash, you definitely can’t afford it with added interest. So be responsible, pay it off every month. How can you tell if you need to part ways with your credit card? If you can’t pay it off every month or if you spend more with a credit card than you do with cash.
Tax Refunds Trap
I try to avoid tax refunds! I know some of you might believe that getting a refund is like getting a gift. The truth is that you loaned money unknowingly to the government without charging any interest. Uncle Sam would never do that for you! As an employee, you can adjust your withholding. As an entrepreneur, you can make estimated tax payments. Just know that if you underpay, you will owe interest.
Too Much Cash
I try not to have money to spend! What kind of no sense is that? Glad you asked; it just means that every time an income comes in, I direct it to bills or investment (I even scheduled when my bills are due to make sure I know which paycheck covers what expense). In other words, my checking account never has money in it. Speaking as someone who likes to see money accumulating, this has been a little challenging. What I understand now is that money can work so much harder for me outside my checking account. This strategy has been working like my budget; if I don’t have it, I can’t spend it.
Entrepreneurship Dream
I am not rushing into becoming an entrepreneur. Entrepreneurship is a great tool to build wealth and legacy, but some of us are not ready for it. There is nothing wrong with supporting someone else vision while you refine your own. People sometimes equate entrepreneurship with wealth. The truth is those people are wealthy because of their work ethic and smart money management skills. You can be wealthy as an employee. The title doesn’t change who you are as an individual; if you are a bad employee, you will be a bad boss. So, start building where you are and keep improving. If entrepreneurship is a step in your journey great; if not that’s okay too.
As much as we are all trying to achieve this financial freedom, our paths will be different. Embrace the uniqueness of your journey and focus more on progress. As long as you are getting closer to your goals you are doing something right.
“I’m not a perfectionist. It’s obvious everything is not going to go perfect. You just have to find what works best.” Julie Titsworth
