Being a household manager, it is important that we are on top of our household’s financial situation. Budgeting and proper handling of our our hard earned money is as important as earning the money itself. Financial independence is being able to afford not working for a number of months and still maintaining the same lifestyle. It is something most of us haven’t really thought of. If we suddenly can’t work, our family would be in danger.
There are several important life events that we need to save for as well. Here are two of them:
1. Our children’s education in the future. Every year, the tuition fee increases almost 12.25%, it is important to save for their future.
2. Our retirement. We need to consider our retirement so that we will have some money to work with when we are old.
Aside from properly allocating the money, we should also be aware of investment opportunities where we can make our money grow. There are several information we need to consider before we can invest. We need to know our family’s monthly income and fixed expenses. We need to know the annuity information, consider inflation rates and or miscellaneous expenses.
Knowing our current lifestyle and evaluating it would be most critical to ensure our way to financial independence. There are those who are called accidental savers, they use this formula when it comes to their savings: Income less expense = savings. Then there are those who are in debt, expense less income = debt and there are those who use income less savings = expense as their formula in savings. If you are the third type, you are on your way to financial independence.
Watch out for my second post where I will share investment opportunities to help us achieve financial independence.