Most people wish to be financially independent and avoid relying on another person or the government for their needs. People often rely on credit cards or loans for major purchases, but once they’ve paid off their debts, they feel a great sense of accomplishment. For most people, becoming financially independent, even on a low budget, marks a crucial milestone in young adulthood.
True financial security comes from being able to provide for your own needs, such as housing, food, insurance, and transportation. Furthermore, you’ll be able to save money for the future, which may be difficult if you depend on someone else financially. A savings plan and investments will ensure that you have money for retirement. Investments are a crucial part of financial independence, says Drew F. Catanese in his book “A Pathway to Financial Independence for Young Adults.”
Becoming financially independent may improve your self-esteem, proving that you can take care of yourself. Taking care of yourself rather than depending on someone else financially will allow you to see yourself as an intelligent, capable, responsible person, which will further motivate you to stay financially independent. Furthermore, if you have the ability to contribute even a small amount of money to the charities of your choice, that may also improve your sense of self-worth and happiness.
Without having to worry about paying someone else back, or paying off your debts, life will become far more simple and stress-free. Living within a small budget can turn out to be surprisingly easy, as Rich Brott outlines in “35 Keys to Financial Independence.” It may involve eating breakfast at home and bringing a travel mug of coffee to work instead of stopping for breakfast, and similar strategies, as he points out.
If you don’t depend on anyone else financially, you’ll have more opportunities, such as the chance to start your own business, relocate or take courses. You’ll be in a much better position, financially speaking, to have children. You’ll be able to spend money on pursuits you enjoy, within your budget. You’ll be able to save for a trip or pursue your hobbies, and indulge in other luxuries once in a while. Knowing you’ve earned these rewards with your own efforts will make them much sweeter.
A loved one such as an aging parent might need your help down the road, and knowing you can provide this assistance will also give you a sense of security. Becoming financially independent allows you to provide support to others when you need to, rather than depending on others. You'll be happy that you've saved and invested wisely when you can help your child through college or afford quality health care for your aging parent.