What is Financial Independence?

I recently stumble to JD Roth’s definition of Financial Independence, which sums up perfectly. He defines, “ Financial Independence occurs when you’ve saved enough to support your current spending for the rest of your life Independence occurs when you’ve saved enough to support your current spending habits for the rest of your life financial Independence occurs when you’ve saved enough to support your current spending for the rest of your life without the need to earn more money. You might choose to work for other reasons – such as passion or purpose – but you no longer need a job to fund your lifestyle.”

Here are five steps we, Mocha and Muffin (M&M), started saving for our way to financial stability:

Tracking our Expenses:

The money came and went, but we both had no idea where our money went, and we did not want to look at our spending. The reason being is that we thought we did not spend money on things we do not need and we believed that we spent on things we absolutely needed. We considered ourselves as “savers.” However, we started using Mint in January 2019 to look at what we are spending our money on and track all our monthly expenses. Started creating a monthly budget

You read everywhere that creating a budget is a path towards cutting your expenses. And, I cannot stop emphasizing how important creating a budget is towards financial stability.



Once we started using Mint to track our expenses, we also utilized Mint to create our monthly budget. On the first of every month since January 2019, I sat with my wife to create our monthly budget. We reflected on our previous month’s expenses and created a monthly budget for the current month. Creating a budget also helped us to identify our monthly expenses and then identity our income, fixed, and variable cost. Cutting our expenses:

You don’t have to spend a lot on necessities and basic needs items. You can still live off a simple life with a regular salary if you cut your expenses. After we started tracking our expenses, we started noticing where our money went, and we can cut our expenses. We started spending on things we absolutely need instead of the things we want. Eventually, we started saving over 65% of our monthly take-home salary (we both had a regular job with standard pay).



Here are some of the expenses that we cut, adjusted our Budget, and contributed more towards our “Emergency Fund.” No accumulated debt:

We started this early by not incurring a monthly car loan. We paid off one of our cars, and the second car is an essential commuter car with 0% APR. We maintained our monthly car payments at a very minimum. We both graduated from university without any student debt, and we both make full credit card payments. Start Investing:

Our checking account started increasing, but money did not grow by sitting in our bank accounts. So, we started investing money in the market (typical bank account yields 0%). We use Robinhood to buy and sell our stocks. Robinhood is a free buying and selling platform, and if you sign up using this link – you would get a free stock today.

We believe that the first step towards financial independence is through saving your ways to financial stability and by cutting down on “un-necessities” items.

Warren Buffet says this through a beautiful quote, “If you buy things you don’t need, you will soon sell things you need.” Also, stop impulse purchases, save, and start investing.