The Investor Mama’s 5 Steps to Financial Freedom For Parents

As a mum, I know the idea of personal finance and investments can be intimidating and overwhelming, especially if you are in debt. I’m here to tell you that it’s okay. No matter how much debt you currently have or how little you’ve been saving until now, I truly believe anyone can reach FI once they acknowledge it is feasible and have a willingness to achieve it. It will take time, you will need to make changes, but it is so worth it. 

Financial freedom is also attainable by anyone, but it will take more effort. If you are reading this article that means, you are at least curious about learning more, and that is a good thing. However, before diving down the rabbit hole of FI, I encourage you to first identify your “Why” and motivation

For those of you new to these concepts, there are many ways to define Financial Independence (FI) and Financial Freedom. Many people use these words interchangeably but I like to differentiate for goal setting purposes. I define FI as when you have enough money to cover all of your needs through passive income streams. 

Essentially, if you stopped working tomorrow (which many of you are due to COVID-19), you would have enough money coming in to cover your basic living expenses. I define Financial Freedom as when you have enough money to not only cover your needs but also all your bucket list items. This includes family holidays, going out to restaurants with your partner or spouse once in a while, being able to pay for all of your kid’s extracurricular activities, etc.  

Here are my top 5 reasons why financial independence and freedom are important. Please use these as a guide to inspire your own why.

More Choices

Being financially free or FI allows you more choices. If you have enough money coming in, you can decide not to work or to pursue activities that provide meaning to you. These projects may be fulfilling but might not make as much money in the beginning. If you have job flexibility, it allows you the time to choose what you want to do, with whom you want to do it, when, and where you want to do it. If you love your job, then kudos to you; keep working but maybe cut back on your hours or decrease your workload so that you can free up time to do other things you enjoy as well.

I was recently furloughed because of COVID-19, but because we’ve used delayed gratification for years and saved/invested more than we earned, I can take my time to find the right next steps for our family. I don’t have to jump at the first thing that pops up. It is extremely freeing and has significantly reduced my stress levels while not working.

The point is, you have a choice. If you truly love your job, I would ask you if you would continue to do it for free. If yes, then great, keep going! If you wouldn’t continue working your job, wouldn’t it be nice to figure out what you would do for free?

When you have financial independence, you have the choice to follow your passions, cultivate new skills, network with incredible people, do whatever you decide without being constrained by a boss or someone else’s dreams.

More Quality Time

Reason #2 is extremely important to me. I value my family time, but it’s hard to always be present. This is true especially now when you’re running around doing a million things, all while having a job to do every day and for many of you, overseeing your kids virtual school. If you are working, even while home, you may get an hour or two in the morning to focus on your children and maybe a couple of hours at night with your kids.

Even then, I ask you if you are fully present with your family during this time, or if your mind is wandering to a million other things? Are you constantly checking your phone for an email or text?

Now, what if you didn’t have that job to worry about? If you have little ones, you can be home with them and not have to worry about juggling work and school.

Or, maybe do work you enjoy with flexible hours, allowing you more time to be present with your children. If your kids are older, you can help them get ready for school without rushing to get ready yourself. You can be present when working on their homework with them, take part in an activity they enjoy instead of throwing them in front of an Ipad or tv. Granted, not having a job won’t solve all of these issues, but it sure helps to allow you to focus on the things that truly matter.

Peace of Mind

Imagine having no debt, not owing anyone anything. Now imagine having a savings account with $10k as an emergency fund. Let’s take it a step further. Imagine maxing out your retirement accounts every month (contributing $19,500 per person in 2020).

You have a net worth that is growing larger every day. If you got laid off tomorrow, you could take your time figuring out the “right” next step.

If your hot water heater stopped working, no problem, you can pay someone to come out tomorrow.

Your car breaks down and you have a $5k bill to fix your engine and brakes. No problem, you are covered.

As I describe these scenarios, how do you feel? I don’t know about you, but having a solid financial safety net is comforting. It sure gives me peace of mind. If the big bad wolf comes knocking, having enough money to cover your living expenses sure takes away your worry and puts you in control of your future.

Healthier Living

When you are FI, there are a lot of health benefits. First, your stress levels will likely decrease since you no longer have to worry about deadlines, meeting other people’s expectations, or going through the daily grind. Even commuting to and from work (if we ever get to do that again) can cause anxiety, especially if you are running late. Also, you don’t have to worry about how you are going to make ends meet, what happens if you lose your job, or if a family member suddenly gets sick?

Second, being FI and not having to work gives you time to prepare your food instead of eating out all the time; a much healthier option. No more getting home late all the time and rushing to get the kids washed and ready for bed.

Now you can be home early to have dinner ready for your family. You can even spend a few minutes planning your meals for the week to save even more time and money. You can also plan low-cost healthy meal options and go to the supermarket whenever you want. No longer do you have to go on nights and weekends during peak hour when everyone else also does their shopping. This saves you time and energy at the store. If you can go on a random weekday, you can get in, get out, and get quality produce.

Finally, you can build an exercise regimen that you can stick to since you can control your time. Working out consistently can be difficult to manage with a family and a full-time job. When you reach FI, that changes. You can create an intense or lowkey workout when it’s convenient for you.

More Adventure

This reason is my favorite! Reaching FI and not having a full-time job allows for more adventure in your life. If you want to take a holiday especially when things open up again, you don’t need permission. If you want to stay for a month, a year, whatever, you don’t have to rush back to meet your allotted two weeks. Have you ever noticed that 2 weeks usually means only 10 days and not the full 14 since it accounts for weekends?

That’s just not right! Two weeks should mean two full weeks!

Reaching FI allows you to say yes more. Yes, to try new things. Yes, to new experiences. Yes, to learn a new skill set. Yes, to more time with your kids. Yes, to take care of aging parents. Yes, to all the things you want to do but can’t because you have to go to work. This is what fires me up!

Conclusion

I hope these five reasons get you excited for a life of freedom. A life on your terms. I know these reasons burn inside of me every single day and keep me motivated on our family’s journey to FI. Some of you might be thinking this all sounds great, but I have a ton of debt and there is no way this is even feasible. It’s just a pipe dream.

More About Finances: