Independence Day

Some 236 years ago, the “founding fathers” decided that enough was enough and they decided to declare independence. It could be argued if they did that for less of a reason than we have today to declare “independence” from our governing body. That is not the reason I am writing this article. Rather it is in recognition that independence, if truly declared comes at a cost. For those who declared independence 236 years ago, it demanded blood, sweat, and tears.

For those who wish to declare financial independence, it will demand savings and reigning in control over one’s desires. This often is associated with budgeting. Many people ask me why is that I focus on budgeting with my clients rather than worrying as much about investments and their respective allocations. This is not to say that I do not worry about the allocations. I just always believe you should focus on the areas where you get the most impact. Time and time again when it relates to finances this comes down to budgeting/cash flow. It comes to budgeting in the front end in being able to save enough to possibly declare independence financially and it comes down to budgeting in the back end once one has declared financial independence in order to maintain it. All too often it is the budgeting in retirement which can be even more important than the budgeting during the accumulation period. The reason for this is that often when one is retired, there may not be an option to try to increase income otherwise. Budgeting of expenses at times like this becomes of paramount importance. After all, making certain that your investments are sufficient to last twenty to thirty years including the effects of inflation is one that requires discipline and careful attention paid to one’s expenses.

The good news is that if one is attentive to one’s budget and allocates one’s savings appropriately, one does have a very good chance in being able to declare financial independence without having to worry too much about having to go back under someone else’s financial rule.

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