Financial independence: possible for you? We’d never say no! When you want to be able to stand on your own two feet and rely less on taking out loans or handouts from your nearest and dearest, setting goals that could change the state of your bank account is always a good step.
However, that’s not to say achieving financial independence is easy. In fact, it’s one of the hardest things in the world. In a world where home prices are rising by the day and the cost of living still ranks high, you’ll have your work cut out for you.
But the more you know about these difficulties, the better prepared you’ll be to face them. Financial independence is all about making your money work for you, but you can’t do that if you’re unprepared for the challenge ahead. As such, here are three factors you’ll definitely want to have a plan for.
The Cost of Home Ownership
Affording a mortgage isn’t easy for anyone. No matter the house you want to buy, you’re going to need to put down a deposit first and then pay for the rest with a loan. The bigger the deposit the lower the monthly payments will be, but this can be an unrealistic goal to aim for.
Keep this in mind when you’re looking through property websites. If you’re saving for a mortgage, it’s going to take time and more penny pinching than ever.
The Cost of Care Responsibilities
Whether you’re a parent already or you’re thinking of becoming one in future, the care costs will add up over the years and soon enough, the average parent ends up spending nearly $250,000 per child.
If you also factor in the need for home health care solutions for elderly relatives, despite how helpful these services can be, the yearly care costs will make up the bulk of your budget. Prepare for these as soon as you’re able to; anyone can need care help at any point in their life, and you may even require aid yourself at some point.
The Cost of Social Sacrifices
How long has it been since you took a proper vacation? It’s probably been a while, hasn’t it? And all because it’s way too expensive to head out there and enjoy yourself right now.
Budgeting means taking extraneous activities out of the schedule – this adds up to a lot of social life sacrifices. After all, you’re unlikely to be able to go out for dinner with friends as much as you really want to either! And when you can’t enjoy yourself, burnout is much more likely.
Think about this for the future to help you find a balance. Without a social life, you might need to take more time off and even end up relying heavily on a credit card. This can push financial independence further and further away.
Becoming, and staying, financially independent takes a lot of forward planning. Get ahead of these needs ASAP.
What do you think?