Adulting 101: Financial Independence


There’s a lot to be said about saving and spending. On one hand, there’s that belief that life is too short so we have to enjoy it to the fullest. On the other, priority is given to saving for the proverbial rainy day.

So which is which? For me, the keyword is moderation. Once we achieve that sweet spot, we can relieve ourselves from the stress of living from pay check to pay check. In other words, we don’t have to make ends meet because, at the end of the day, we will have more than enough.

How do we achieve such financial independence? I’ve always been struck by the challenge not only to live within your means which is the oft-repeated adage. The bigger challenge is to live BELOW your means which can be difficult given so many things we are goaded to think we need when, really, we don’t.

Before we continue discussing this below-yourmeans gem of a life hack, it’s essential that we first dispel the commonly attached myths about what living below your means entails. One, it does not mean living a life of a miser where you don’t spend at all. Two, it does not mean you miss out on all the fun because you’d rather hoard money rather than shell out. Here’s the bottom line: Living below your means, put simply, is NOT outspending what you earn.

How do we do that? Here are some ways that we can explore:

· Automatically set aside money as savings. Set a goal for savings. The usual is 10% of your net monthly income. Once the money is in, immediately deposit said amount to your bank account. That way, you won’t be tempted to spend it.

· Track your expenses. List down what you spend on. Divide it into stuff you can’t do without and stuff that you can minimize spending on. In my case, eating out was the main thing that I had to control. So instead of eating out every day, my husband and I significantly cut it down to twice a week. And I was forced to sharpen my limited skills in the kitchen so YAY!

· Limit debts. This is the problem with credit cards. Just think about it. When we overspend, we eventually will run out of cash. Then we brandish our credit card as a stop-gap measure. Here’s the problem: once the bills rack up, we will have less money to spend in the next cycle. Incurring debt on top of everything else adds insult to injury. Use your credit card only when necessary.

· Scour for good deals. My sister has always been REALLY gifted when it comes to looking for good deals. It entails both skill and patience. Now that she’s based in the US, she loves couponing. With all the discount coupons she amasses, she can bring down the total amount of her weekly groceries to less than USD5 (roughly PHP250). Amazing, right? We can do that, too. Let’s look for shops that offer the same thing for a lower price. Let’s be on the lookout for discounts and myriad promos. Shopping smart can help us save precious pesos.

· Increase income. There are so many part time jobs, especially online, that can be a source of added income. I do online writing on the side which pays for all our utility bills. That’s a significant amount subtracted from our monthly expenses.

Living below your means does not mean missing out on life. At the core of it all is moderation which is the key towards achieving financial independence and, really, a less stressful life.