Thanks for this forum topic! It might end up being my new "daily" if you'll have me. I think what happens after financial freedom, for me, will come helping others join me. I look around at friends and family struggling and I'm just now learning that there's another option, with a little bit of education and effort.
I am not sure there every really is a financial freedom point; its just moving on to the next goal for me. Right now I'm working on building savings while paying down my credit card debt. I've been kind of stuck in this cycle of paying down debt, but then having an emergency and not having enough savings to cover. Then out comes the credit card and back to square one. My plan after paying down the CC debt is to start building a one month emergency fund, then three, then six while staying CC debt free. If I can stay on budget, then I should also be able to have the last bit of my car paid off by Dec 2021 and then, who knows? Maybe a nice family purchase or vacation.
I guess what I look forward to the most is just being under less stress about everything financial. Having relief knowing I can handle emergencies/big purchases without having to rely on a credit card. Just being able to say yes to more things because, yes I can afford that or yes I can do that because I am not stretched too thin.
I think financial freedom is not an actually something a person can pinpoint specifically, rather more of a lifestyle and mindset. Due to this thinking, can one really say what it is they are to do after reaching such a state-of-mind? Perhaps I am just too far removed at the moment to properly evaluate the questions with specificity.
However, I do think, when I reach financial freedom there are two options: continue growing/nurturing the mindset that lead me to financial freedom (to me this is closely related to emotional and mental peace) or revert into old habits/scarcity mindset/anxiety and potentially be in the same financial state or position as before (or worse off) financially.
Goals and "Why" are questions that I find easier to answer.
On Road to Financial Freedom
Reimburse my family member for loaning me the funds for my education Our agreement; retain word of honour.
Establish/Maintain sinking/emergency funds Peace of mind or at least lessen stress in future events
And other goals pertaining to family.
Hi Katie, you are welcome here anytime.
Sarah, I know what the cycle is like. When I was married, we traveled for my ex-husband's job. It was difficult because it took me a while to find work and by the time I found one it was time to uproot to a new location. During the interim I had to rely on Old CC (credit card). I finally paid it off and then divorced, relocated, and all with the help of my old friend there. I'm not sure what happened, when, or how I maintained focus but I paid it off. I'm so scared to fall into a rut of dependency on the credit card but I know I can't/shouldn't be fearful if I stick to the principles I've learned.
Kristen, I asked for the reason you mentioned in the first sentence… I was wondering how people know for certain when they reach that point, but I guess we never really know. I feel as if the debt I have now is manageable but even if it isn't/wasn't does that mean I should put my life goals on hold? I love to travel but if I wait until my student loan gets paid off I'll be on a ventilator on a beach with a pina colada in both hands. I want to be able to travel while I'm still able regardless of finances.
I feel that after all the debt is paid, I'll still have to make other large purchases that create more debt just to increase my credit score.
Does that make sense?
Living life while you're able to enjoy it is so important! Even if I don't have a vacation in mind, I save a small amount each month to a vacation account so that it's ready when the need arrives. It's not so much that I feel like I'm ignoring my debt or retirement savings, but it adds up and gives me enough encouragement to be able to stick to my other goals. Putting a vacation on a credit card is so easy to do (I've done it too many times in the past) and I know I need to stay out of that trap; my current approach has been working for me.
I am at the tail end of getting most of my shorter term debt paid off. If I can stay consistent, I will be there by the end of the year. I am working on a car payment and the credit card. I have paid down about half of my student loans and my interest rate is pretty good, so I am taking my time with those. I was very lucky to have graduated when costs were rising, but interest rates were manageable. I've been taking advantage of the pause in payments on my federal loans to get caught up in other areas (paying the same premium to my SL but paying the interest I would have paid to other debt). I really hope they extend the pause until the end of the year, I know it would help me and a lot of others.
One dream I have post short term debt is to buy the family a small vacation home somewhere (or an RV we can take/park somewhere). Its gonna take a few years to get there but I think it will definitely be worth it. I have a sinking fund set up for it right now, but its still pretty small. Once I get to the end of the year though, I'm hoping I can commit to saving that much more.
I really do love the concept of sinking funds! It makes so much sense saving for the expenses you know are coming. Plus I put mine in a high yield savings (well not so high yield right now) and earn a little interest until its time for them to be spent.
I've heard about benefits to using the credit cards on small purchases for the reward points, but are the rewards really worth it?
I'd like to know if people end up in deeper debt just for the perks offered with the card (i.e. Bonus miles, 3x points for grocery purchases) or do the points really help with debt management in some way?
Credit card rewards points are so worth it for me! The trick, like you alluded to, is not to over spend for them. I treat my credit card like a debit card, meaning that I don't charge anything that I couldn't immediately pay off, and move that money to a different account to make sure I can pay off the card in full when the bill comes (5% cashback isn't worth 15% interest charged, for example). I also don't charge anything that I wouldn't have purchased anyway, a similar approach to couponing - you're not saving any money if you buy something unnecessary just for minimal reward. I suggest doing the math to see exactly what the reward will be to avoid getting caught up in the hype. Paying utility bills with a credit card is an easy way to get started earning rewards.
Has anyone had any luck convincing their employer to increase their 401k (or other retirement investment account) match? My company "matches" at 10% of 2% of my salary that I contribute annually. That's outrageously low and I'm looking for suggestions on ways to convince them to increase the benefit in order to keep employees. Their argument against increasing the benefits is that the employees don't care about retirement so it wouldn't be worth it, but I feel like that is a sad excuse. I work in HR and I feel like I'm talking to a brick wall when I make employee retention suggestions that are mature and responsible. They always end up paying for a free food day instead of something that will actually help people in the long-term.
Katie, I actually just switched all my small bills to my credit card for auto-pay. I'm still a little nervous, but I don't have any issues paying those bills otherwise, so this should be the easiest hurdle for me to jump over.
As far as the retirement, I have no idea of how to get them to increase the benefit but you should keep trying. The worst they can say is no. The company I work for pays 10% but I'm not sure. I'll definitely find out this week. I do know that they have a significant increase after vestment.
For me, the credit card rewards were worth it when I could max them out and pay the bill in full every month. When I lived rurally, I shopped a ton online and used mainly rakuten and an amazon rewards card. I ended up earning enough cash back each month to pay for a large portion of my groceries (which I also ordered online). One or two emergencies and cash lent out to relatives and it just fell that much behind and slowly snowballed. Now that we are back in the city, I have easier access to things (and usually better prices) and I've been able to get back on track and reduce the usage of it. I am planning on still keeping the credit card for big expenses, but only if I have enough to cover.
Katie, that 401K percentage does seem really low. I'm at a smaller sized company that's in a commodities based market so I thought I was pretty low at a 4% match fully vested up front ( I had up to an 8% match at a larger company, but took five years to get fully vested). It definitely factored into my decision to work where I am at now. I chose the lower percentage because I really enjoy my work, the people I work with and the company does make up the difference in other ways (bonuses when he company does well etc).
It is so refreshing to hear people talk about their retirement and ways to make things better. At my job, no one really talks about retirement or taxes or salaries.
@ Katie P I am relatively new to the workforce and employer benefits, so I have not yet asked for a better match-rate. (I am allowed to contribute up to 6% with a match of up to 3% [half of my contribution]). IF the company is not willing to put more emphasis on retirement, (by all means continue trying to advocate for it) perhaps try gathering/providing free resources for those who are interested in retirement? If people take-to these resources [more so than expected] perhaps it will give more data for your case and maybe loosen a few bricks in that wall you feel your talking to.
Disclaimer: This is my speculation only.
I do not shop much (due to not being the primary decision maker in my family), but I find that making the criteria for credit-card rewards shopping to be: a) can I pay in full right now if the bill were due and b) would I have purchased this product/service anyways.
I know the primary decision maker puts bills and groceries on the family card and that in a few months we have enough cash-back to pay for a lower-expense bill (like Netflix). Really whether credit card rewards is worth it depends on:
Personal oppinion; however, I believe with so many different credit-cards out there that there is probably one that'll fit whomever so long as that person first knows how take advantage.
These chats are so encouraging! I'm not going to give up on trying to get my employer to be more competitive in the 401k match benefit, because I do enjoy the job. That was a really great suggestion to get more employees enrolled in the benefit first, then I'll have the numbers/support on my side!
@Katie P. Glad you are not giving up. (Sounds like your the type of person I like in HR.) I have yet to look into it, myself, but my employer-retirement sponsored account sends me a statement with some "fun financial facts" attached. The most recent suggested a website called: americasaves.org
Perhaps, this might be a resource you could use to gain interest?
On the topic of credit cards rewards (only being worth it with responsible credit card use): I'll leave today's daily article here since its topic has been relatively recently discussed within this thread/topic-within-our-little-"guild" so others who do not read it today who maybe have the same questions can potentially find it easier. https://www.saverlife.org/money-101/how-to-manage-what-gets-charged-to-a-credit-card
Both links should lead to the same article, I just wanted others to know the article also helped with the topic of "are credit card rewards worth it?"
I was wondering if who ever picked the article of the day had been reading this thread! :) Sure felt like it.
I am closing out this month on target with my debt paydown! Nothing really feels as good to me as when all those budget numbers become reality. Next month, my goal is to manage back to school spending and getting my husband through a minor medical procedure. I've been saving ahead so I'm in a good position this month to start. Then its looking ahead to holiday spending.
Yes very strange task indeed.
It's literally pointless when points don't get added to the account.
Hi everyone!!
I did not overspend and I set up autodrafts for monthly bills as we discussed. I think I may even be able to pay those with one check and will still have enough to contribute to emergency and travel funds.
I have to admit, I did giggle when I read the article of the day.
*Maybe sometime in the week they can give advice on speaking with HR about increasing the retirement benefit.
I have been saving for retirement since I got my first job after college because I really wanted( still want) to retire early. I waited until I passed my 6 months probation and scheduled an appointment for our retirement advisor to come speak to and enroll me in the service. Unfortunately, the advisor was not the fund manager type of so my retirement funds were sitting with no real growth for YEARS. I even had a difficult time getting them to switch the IRA to a new company but, I'm confident in the new retirement company and my financial advisor is AMAZING and also helped me to establish a trust fund for my son. He's still young so there will be a lot of good growth even if I don't contribute regularly.
James, don't fret, my friend… they will deliver your points. I think the people in this thread have had similar problems and had success in getting their points,a so your deliverance is not far.
I have applied and reapplied for the PSLF program, and there was an article about it last week. I have been calling the student loan company for a month and a half to get the number of qualifying payments that I've made and always get a different answer on when to call back for the update. I checked the website yesterday just in case there was a letter in my account about the payments and read that they will no longer be servicing govt student loans and they will be sold to another company… again. This is my only/final debt and it seems like it should have been done long ago.
Why does it only take 5 years to pay off a car, 30 years to pay off a mortgage, but 50 years to pay off a student loan?!? 
I never had student loans, having not gone to college, but I've been starting to think about a 529 plan. Does anyone have anything to share about that? I've heard that it can be used for your children or yourself, which is something that appeals to me. Since I didn't choose to go to college, I've always thought it wouldn't be a good use of my money to fund savings for my children and have them end up not going to college either. I'm starting to see the error in my ways. The way I see it, out of my four children, one of them is bound to choose college and if a 529 can be used for myself then I could always be a 70 year old grandma taking college courses to keep my mind active if they don't.
I thought about starting a 529 for my son, but he's young and there is no telling what plans he will make for his future. At that point my job will just be to sit back and watch. I tell him all the time, "I can see a million possibilities for your future. It's going to be very interesting to see what you choose for yourself." I've already established a savings and trust for him so if he decides to go, the money will be there.
There is nothing wrong with you being 70 years old going to classes to keep your mind active. You can even start before/after then. I'm not sure how old your children are, but maybe you should ask where they see themselves in the future and how you can support their goals? It's just a suggestion. When my son was 2 to 6, he said he wanted to go to the Navy like his dad. He is 10 now. He mentioned college once when I made him pay for his fast food with his allowance. He said I was making him waste his college money on food, LOL. I told him I would teach him to cook so he could save.
If all else fails, your kids could get summer jobs and save for it themselves. That would take quite a bit of burden off your plate.
I've only dug into 529 accounts very minimally. Eventually, I would like to start one with for my daughter. I don't know too much about how beneficiaries work for them, but I do like that they are tax deferred. As long as you are spending the money on educational costs, I believe you do not pay tax for withdrawals. So I would assume if a student changes their mind about college, you would just have to pay regular taxes on the withdrawals if they are not used for education expenses. I have been meaning to look into my states 529; I might try to do that this week. There are certain types of 529s where you can prepay tuition for a certain university, but I am not sure what happens when a student decides to attend a different university. Anything that allows me to save and have to pay less taxes is a win. I am not sure if they limit your investment choices within the 529, so that may be a drawback.
Huh. I remember attempting to look into 529 before (Saverlife does have a brief article somewhere on this site referring to them), but I cannot remember why I decided against. I think it was because I thought that if the money was not used for education [or other very specific exemptions] than it was forfeit…
I chose to simply invest [and also started an employer sponsored retirement account] would suit me better….but I hadn't thought about simply using the funds for myself to keep my mind active. Definitely something to look into (assuming the growth is [expected to be] good.)
It's so great to hear other opinions and experiences with college savings options! This topic makes me think about the bigger idea of financial guilt. For me, I've sometimes felt like not having a savings account for my kids' college made me a failure, or like I'm not providing for them. I know that's not true (they have food, shelter, and love) but the pressure of society can cause me to feel inadequate. Does anyone else have areas of finance that cause them guilt? What are some ways to overcome those feelings that have worked for any of you?
I often fall into the trap of neglecting my own needs when it comes to spending. It is easy for me to spend on my husband and daughter, but when I need something new, I usually waffle on whatever purchase it is. I'm not sure if its guilt, but its in my nature to take care of others before I take care of myself. I have been trying to get better at it, but its a hard habit to break.
