What’s in your financial future? Security, Freedom or Independence (Part 2)

What’s in your financial future? Security, Freedom or Independence (Part 2)

Welcome back from Part 1.

 

 

 

 

 

Let’s talk Independence!

Que Beyonce and the girls!

 

Or Jamie Foxx and Ne-Yo (I like that version too)

 

Imagine your standard of living being independent of your decision to work a job.

 

Imagine your ability to earn money not being dependent on the efforts of your spouse, significant other or parent.

 

Remember the term independently wealthy? I don’t hear very often today, but it sounded super fancy when I was a kid. Independent AND wealthy for $1,000 Alex!

 

Well, financial independence is not quite the same thing.

 

While independently wealthy individuals are also financially independentfinancially independent individuals are not always independently wealthy.

 

The little difference is the wealth factor.

 

So, how do you become financially independent?

 

Financial independence is like being “grown” on another level. You are not dependent on a spouse, a family member, friend or a paycheck to take care of your needs. Ultimately, you are not dependant on one source of income.

 

You’ve figured out how to use a combination of your investments, savings and other passive income streams to your advantage.

 

This is difficult to even initiate if you aren’t financially secure and almost impossible without being financially engaged.

 

While financial independence may give you the feeling of freedom, it’s different from financial freedom.

 

Financial independence is more about the “how” of your ability to generate income versus the “what.”

You’ll see why shortly.

 

What impacts your ability to have financial independence?

Many would say a job! While that may true, I would argue that the biggest impairment is only having one stream of income.

 

If being independent is about being in control, having only one source of income spits in the face of financial independence.

 

There’s a much higher probability, risk, and impact to you if you lose your one and only source of income versus losing 1 of many.

 

So what impacts your ability to achieve financial independence…I’m sure you can guess the 1st one…

 

-having one source of income

-being primarily dependent on another individual’s income

-having more expenses than income (aka living outside your means)

-purchasing large amounts of material possessions with no monetary value

 

Financial Freedom

The definition of freedom previously referred to the freedom of caring or having constraints.

 

When you don’t care about something it’s typically because it doesn’t affect you.

 

Ironically, being free is kind of like being a kid.

 

Only in this instance, you have more power!

 

The moment you don’t care about how much money you have is likely when you don’t need it.

 

Ummm, what?

 

Did you just ask me, who doesn’t care about money?

 

Well, it’s typically those that:

  1. Live well below their means (2) Have more means than they will ever truly need

 

Financial Freedom gives you even more options! The option to be who you want to be, do what you want to do and give your time to the things you truly care about.

 

Financial Freedom is commonly associated with having a LOT of money. I’m not suggesting that it isn’t a way to obtain financial freedom, but what I suggesting is that it is NOT THE ONLY WAY.

 

Option 1: Your standard of living is independent of your ability to earn money. You have built a life that looks like you subscribe to “tiny living” or a nomadic lifestyle.

You only need true essentials to survive and may be much more concerned with experiences versus stuff.

 

Option 2:  You leverage your tushy off (which is not the same as working your tushy off). Under this scenario, your ability to earn money is not being dependent on your individual efforts.

 

You leverage your resources, your network, and your assets to generate enough money so you are not confined by the traditional means of earning a living.

 

When your goal is financial freedom, a higher emphasis is placed on lifestyle and choices versus just dollars in the bank.

financial freedom or financial independence

What does financial freedom look like to you?

 

This could be the lifestyle of the rich and famous or the lifestyle of Gandhi or Mother Teresa but the bottom line is that it’s the lifestyle that you choose!

 

Your income may come from a variety of sources including, but limited to wages from a job, your business, interest income, dividends, business interests, royalties, etc.

 

Imagine not caring about money or your ability to cover your obligations. Imagine having no constraints when it comes to your life’s choices.

 

Imagine having the power, the means and the choice to do what you want, help who you want and live how you want.

 

You have created a life that gives you the freedom to do so.

 

While I know financial freedom to be a “popular answer” to a common question, being free is not for everyone. It requires commitment and sacrifices whether you pick Option 1 or Option 2.

 

What impacts your ability to have financial freedom?

-Tons of debt

-No money

-Lack of discipline

-Trying to do it all alone

-Mental Constraints

 

You hear about famous people traveling the world and living in “MTV cribs-style homes”. In the same year, you hear about their millions in back taxes or bankruptcy which implies that they were living beyond their means and thus are not truly financially free.

 

You also hear about people that have never had credit card debt (or any debt), live in an Amazon jungle and volunteer to help those less fortunate (by Western standards).

 

While this person may or may not have enough money to outlive them, they have made the choice to be free of the constraints of what most deem as a “normal life.” This is what financial freedom looks like to them.

You can’t gain either of these three statuses by accident. They all require discipline, commitment, patience and usually help from others.  

 

The statuses shouldn’t be viewed as stair steps. While you may start with financial security you have the option to structure your life to go straight to financial freedom!

 

As you are considering which one of these 3 ideas connects with you the most, I recommend asking yourself these basic questions?

 

  • What do you truly value in life?
  • What is preventing you from reaching financial security, financial independence or financial freedom?
  • Are the decisions you’re making beneficial or detrimental to your goals?

 

While progress starts with financial security, it’s up to you what level you hit next.

 

Take me with you along for the ride as you begin to take action towards real progress and accomplishing your financial goals! Grab your free copy of the FIIRM Ultimate Resource Guide. Learn what other women like you are doing to save more, do less and earn more. 

 

 

 

Nikki Tucker

Nikki Tucker

Founder & Managing Director

 

Nikki is a 16-year financial services professional and the founder & primary personal financial strategist for The FIIRM Approach. She helps female breadwinners avoid common financial mistakes during a divorce or after a recent uncoupling. She is keenly focused on helping women confidently maintain their financial security with proven strategies for living with a budget, managing debt, and improving their credit score. TAKE ACTION & LEARN about the tools that can help make your new money life easier. Grab your FREE 2019 Ultimate Resource Guide HERE.  

 

What’s in your financial future? Security, Freedom or Independence

What’s in your financial future? Security, Freedom or Independence

I can’t wait until I’m grown!

 

 

 

 

 

 

Have you ever said that before? Come on, you can tell me.

 

Have you ever heard it from your children or maybe someone else’s children?

 

Let’s face it, being grown sucks at times. Plus, we spend way more time being grown than being a kid. So it can suck for a long time!

 

Almost every kid wants to be grown because they’re looking forward to being free of their parents (maybe you) and free of rules.

 

What we don’t realize when we are young people is that all we do is trade one type of freedom for another when we become adults.  

 

I have asked “What is your ultimate financial goal” many times to people. A very common answer is “I want Financial Freedom”.

 

When I hear that answer it makes me think of the “I can’t wait until I’m grown” phrase.

 

Do we really know what we’re even asking for?

 

Allow me to break down 3 common ideas:

 

Financial Security vs. Financial Independence vs. Financial Freedom

 

Let’s start with some facts. The Webster dictionary defines:

 

Security: freedom from fear or anxiety; freedom from danger; something given or pledged to make certain the fulfillment of an obligation.

 

Independent: not dependent; not subject to control; not requiring or relying on something else.

 

Freedom: the absence of necessity, coercion or constraint in choice or action; liberation from restraint of power or another; freedom from care.

 

Financial Freedom and Financial Independence are often used interchangeably, but they are not the same thing.

 

But before we start singing Independent Women by Destiny’s Child, we should probably start with “Security” by Otis Redding.

 

You’ve probably never heard of the song, but the first line in the song is “I want security, yeah.”

 

It just seems so appropriate.

 

Many of us are seeking Financial Security but are saying “Financial Freedom”

 

Security is a basic need. Maslow said so.

 

Financial security is just as basic because I said so. ☺

 

You want to make sure that you are comfortable enough to handle whatever crazy things life throws at you that can impact your finances.

 

If you’re looking for financial stability, first you have to get rid of the obstacles in your way.

 

How do you get obstacles out of your way? You become financially engaged.

 

Most people are just financially literate.

 

Being financially engaged is an action that comes with an incredible feeling. It’s like being as confident as Cher and Tina Turner when they go out on stage!

 

In the back of their minds, they may be hoping and praying that nothing goes wrong but deep down they know they have enough experience and a strong foundation to weather any storm.

 

Here’s an example of what I mean:

Some households can’t afford to miss one paycheck. Many definitely can’t afford to miss two.

When you are financially secure you have confidence in knowing that if you were to miss a paycheck, you would be just fine.

 

According to AAA, most families can’t cover the expense of a major vehicle repair. I’m sure the same can be said for a major household repair.

 

However, when you are financially secure, you know you have access to liquid cash or available credit that can easily be repaid to cover the repair.

 

When you are financially secure it doesn’t mean that you are super rich.

financial freedom or financial security

Financial Security doesn’t need to look like this

 

It also doesn’t mean that you don’t incur financial mishaps. It DOES mean that you have your financial ducks in a row.

 

You are free of anxiety about being able to pay your bills and meet financial obligations.

 

You have the proper insurance coverage and estate documents in place to protect you and your family’s financial security.

 

You still may worry about things going wrong and it’s a “no refund kind of guaranteed” they will. But, those worries won’t keep you up at night.

 

It’s important to get on the path to financial security early so that you are fully prepared for any financial surprises and progress towards financial freedom, if that’s what you truly want.

 

What impacts your ability to have financial security? Throwing the covers over your head and ignoring your financial challenges or opportunities.

 

Many of these items you’ve heard before and haven’t tackled with the ferociousness necessary.

 

I’ll repeat them as a friendly reminder.

-Not being cash flow positive

-Not having an emergency fund established

-Not having access to credit or enough available credit

-Not having the proper insurance protections

-Living outside of your means

-Not understanding your spending triggers or focusing on physical possessions

 

You have to understand your complete financial picture (which includes the items listed) before you can gain financial security. Often we look at our finances in parts. You have to review THE WHOLE PIE!

 

Notice I didn’t mention how much money you earn above.

 

Think about it how many broke people you know that earn a lot of money.

 

Financial security is about being stable, responsible and feeling secure in your financial position.

 

That security looks and feels a little different to everyone, but the foundation is essentially the same. Not being wealthy is not a reason not to go after it.

 

Financial security is the step that can’t be skipped regardless of whether you’re looking to achieve financial independence or financial freedom. It’s the first step to having options!

 

Tina Turner was Anna Mae Bullock first! She weathered the storms and earned the right to be Tina Turner.

 

Can you stop at financial security? Heck yea! Anna Mae could have just stopped at singing in nightclubs and been fine.

 

Maybe you’re already financially secure.

 

Cool! Virtual high-five.

financial freedom or financial security

Keep on rocking out your financial life!

Maybe you’re just curious about your other options.

 

Either way – you’re in the driver’s seat to control your financial destiny.

 

You’re also in control of how much you read of this blog series.

 

I’ve given you enough to mull over for now.

 

Remember the goal is to help you with your progress on your financial journey. There are no expectations to be perfect.

 

Take your financial life to the next step by reading Part 2: Financial Freedom, Security or Independence: What’s In the Future for You?

 

 

 

 

Nikki Tucker

Nikki Tucker

Founder & Managing Director

 

Nikki is a 16-year financial services professional and the founder & primary personal financial strategist for The FIIRM Approach. She helps female breadwinners avoid common financial mistakes during a divorce or after a recent uncoupling. She is keenly focused on helping women confidently maintain their financial security with proven strategies for living with a budget, managing debt, and improving their credit score. TAKE ACTION & LEARN about the tools that can help make your new money life easier. Grab your FREE 2019 Ultimate Resource Guide HERE.  

 

Plan Your Finances Like A Wedding in 3 Steps

Plan Your Finances Like A Wedding in 3 Steps

If you got married more than 10 years ago, you may have had a “wedding folder” filled with fabric swatches, catering menus, and dress ideas.

wedding

 

 

 

 

If the coordination of your wedding was like a def-con operation, then maybe you had a wedding binder!

Pinterest may have even held the treasures to your dream wedding if you got hitched within the last couple of years.

Your wedding day was dreamy. You made sure that every centerpiece was perfect, your bridal party looked like magazine models, and of course, you married the love of your life!

Similar to your personal finances everything for your wedding didn’t go exactly as planned, but most didn’t even notice.

Your then-fiance told you over and over again, “Don’t worry about it – everything will be fine!”

He was right! All your hard work paid off.

And that folder! Well. You probably haven’t seen it since your big day.

1. Do you keep a financial binder that is as impressive as your wedding binder?

Improving the way you manage your personal finances requires the same time & attention you gave to planning your wedding & honeymoon, but the impact is so much more important to your family.

I’m not saying your marriage isn’t important.

But the wedding itself has little to do with whether you survive as a married couple.

During the planning, you and your then-fiancé likely had little arguments over things that never really mattered. It just felt like they did.

One of those arguments may have been about something that did matter – your budget! Maybe you kept a cool, balanced head, and your husband was the overindulgent one (yeah, right..lol).

Filet Mignon or Chicken? Top Shelf or Well Liquor? A hand-sewn beaded or second-hand dress? One isn’t necessarily better than the other. It pretty much comes down to preference.

Plus, one other major detail-Your budget!!

The way you design your wedding has a lot to do with your personal finances.

Grand or modest home? Luxury or practical car? Super cleaning lady or super cleaning powers?

Yep – Preference and budget definitely matter with these choices.

A wedding is such a big event. There are serious deadlines and multiple people involved to pay close attention to the details and the planning. You have the pressure of time & limited resources that force you to make hard decisions.

With your finances, the pressure isn’t the same. You expect to stick around another 50-60 years.

The urgency just isn’t there.

You keep telling yourself that you’ll get around to maintaining a real budget for your household, but you don’t.

You understand how critical little details are when planning your big day but in normal life, you politely leave important details of your financial situation untouched – like nasty food at a tasting.

I completely understand how planning a wedding is different than planning your finances- more fun, romantic and sentimental.

Whether we want to face the truth or not, we spend many months (or years) planning one day that honestly has very little return on our money.

Then, we’re reluctant to spend an hour out of the month planning for things that impact our day-to-day life or our retirement years.

Your budget doesn’t have to be in a fancy binder or spreadsheet. My mother keeps hers in a $.50 notebook.

I know that personal finances can be a scary world. It can feel so overwhelming it downright sucks at times.
I’m confident that you can tackle it. You just may need a little help.

One of the keys to creating a sense urgency is by setting realistic financial goals with deadlines. Start with very simple, but deliberate, tasks to give you some relief. One of the first things you can do is grab the most recent copy of the FIIRM Ultimate Financial Resource Guide! It’s filled with tools to help you earn more, save more and do less! 

 

2. Who can you trust to make it happen?

Once you have an idea of how much money you’re working with you for your wedding, you start talking to vendors that you want to hire (If the day isn’t perfect, the bridezilla hiding just beneath the surface may show up & show out. It’s best for everyone that you get what you want?.

You interview vendors, read reviews, taste test and ask your friends for recommendations. You want to make sure the people you hire can execute your plan well.

When it’s time to pick your insurance agent, financial advisor, or tax preparer are you as diligent?

Do you come up with a list of questions? Do you know what the right person “feels” like?

If you aren’t a “numbers” person, thinking about budgets, retirement accounts and tax strategies is probably similar to how I feel about golf. I’ll play if you put a gun to my head.

However, the times when I’ve enjoyed golf the most is when I play with a great group of ladies or have had an instructor at every hole.

Sometimes you just need the right people around to help you get through it.

Today the internet makes it easier to pick the right professionals. You can read reviews, listen to podcasts and read blogs to get a “feel” for a person before you hire.

Be patient and diligent. Never worry about asking too many questions and shop around.

No one plans or completes a wedding alone. Please, please stop thinking you should know how to handle your finances without help.

3. How engaged are you with your own success?

When it comes to a wedding, you first celebrate the possibility.

Celebrate your successYep, before you got married you may have had an engagement party to celebrate the possibility of getting married. You celebrate the progress you’ve made in a romantic relationship.

Don’t get me wrong. I am not bashing engagement parties, but how many things do we actually celebrate before we accomplish it?

It’s not very many. The main two, that I can think of, are marriage and babies.
Think about it.

Hardly anyone celebrates their new job just because they got the interview. Most don’t throw a housewarming party before they close on the new house.

The celebration of love & life is a beautiful thing. I’ve been to some awesome birthday parties and amazing weddings.

But my busy moms, devoted wives and hard working women, also need to embrace celebrating financial milestones!

When you make strides in improving your financial situation, you have accomplished something worthy of a celebration.

The relief you feel after getting your “financial house” in order is no small accomplishment.

Paying off all your credit cards or even just a major one is bragworthy!

What if you celebrated increasing your contribution to your retirement account?

What about a celebration after you’ve made your first investment in the stock market or watched the stock price double?

Why am I beating the crap out of this topic?
Because I truly believe if you value your money and its real purpose then you must show the universe, yourself and your family that you mean it!

As you make progress improving the way you manage your finance house, ACKNOWLEDGE IT!

Show the universe you appreciate the prosperity you are receiving.

Plus, if people can celebrate things like kite flying day and national lasagna day (which sounds delicious by the way) I’m certain you can find a way to celebrate your financial milestones.

An engagement party shows that you are excited about the possibility of a life filled with love & happiness. You are expressing your optimism and openness to receiving joy.

The same logic applies when it comes to your personal finances.

Naturally, you only want the closest of the close involved. Those that have heard you cry your eyes out over your ex-boyfriends or loaned you a few dollars in your time of need.

Besides, the celebration doesn’t have to be anything over the top.

Something as simple as a gourmet latte & great dessert with your closest friends could be enough! (Ice cream is not the devil, btw.)

After you start acknowledging your financial milestones you can start a new trend with your friends.

How cool would it be to attend your best friend’s financial student loan payoff party inspired by you?

Sounds very grown-up, doesn’t it?

Getting your financial house in order is real grown-up work.

When you’re really serious about it, it won’t seem odd to do the things I mentioned above. And it definitely doesn’t have to be perfect. There’s no such thing as a perfect wedding nor a perfect marriage. It takes patience and commitment to make either work.

Trust me – your personal finances require the same efforts.

Allow me to help start off your progress.

Say your financial vows and commit to yourself by clicking the “I DO” button to find the resources you need to help you save money and keep your finances on track. The best thing about this guide is that we did all the work for you.

You’re ready to take this head on!!

Ready to get your finances in order
I ________ (your name), pledge to make my personal finances a priority like a Bridezilla planning a wedding!! I pledge to be patient, communicate my goals and celebrate my success with cake (or wine, or donuts or chocolate…)!

 

I DO!

 

Nikki Tucker

Nikki Tucker

Founder & Managing Director

 

Nikki is a 16-year financial services professional and the founder & primary personal financial strategist for The FIIRM Approach. She helps female breadwinners avoid common financial mistakes during a divorce or after a recent uncoupling. She is keenly focused on helping women confidently maintain their financial security with proven strategies for living with a budget, managing debt, and improving their credit score. TAKE ACTION & LEARN about the tools that can help make your new money life easier. Grab your FREE 2019 Ultimate Resource Guide HERE.  

 

Pin It on Pinterest