Personal Finance, Uncategorized

Financial Independence when you are Poor

Tips for financial independence

When you are living in the trenches of paycheck to paycheck, financial independence can feel like an impossible goal.  Every time I read an article about how many millions you need to retire, I have a panic attack.  How will we ever save that much?  I wonder.

I’m not sure if we will ever be millionaires, but even at our lowest income points (hey there, law school!), we followed these principles to help us work towards a financially secure future.


Saving is the keystone of financial independence.  If you are serious about moving beyond “just scraping by,” you have to develop the discipline and desire to save.  

Start saving from every paycheck, using an automated deposit setup so you never forget.  See how much you can shrink your budget so you can save more.  Save your emergency fund, then start saving a chunk of change to invest in the stock market, or in your own business, or in a rental property.

If you’re wondering how much should be in your emergency fund, you can read my thoughts about it here.

If you really are scraping by, start a side-hustle and save every cent you earn from it.

On that note, don’t just stick your precious savings in a traditional bank savings account.  Find a high-interest account so that your money will grow faster.  I wrote all about high-interest accounts, how we use them, and why in this article a few months back.


Grow your knowledge by learning a new skills.  This can mean higher education, but what I really mean is a continuous cycle of learning.

Learn about personal finance and how to budget.  Once you’ve mastered managing the money you have, start learning how to grow it.  Learn how business and the economy work.  Start investing and working to increase your net worth.

Maybe you want to sell hand-made luxury soap.  Even if you know how to make soap, do you know about the luxury soap market?  Do you know what it means to scale a business?  Do you know graphic design and marketing?

Any and all of this knowledge can help you start on the path to financial independence, regardless of your household income.

Work hard

If you already have a day job, finding time to start a side hustle or take a free economics course can seem impossible.  Have the dedication and grit to work in your free time and evenings, instead of checking out in front of the television.  Developing the discipline to stay focused and dedicate yourself can help you throughout your life, far beyond improving your personal finances.

Work hard at your job.  Make yourself indispensable, then ask for a raise.  Get a promotion.  Hard work will set you apart as a generation of lazy millennials dominates the workforce.

Balance your resources

Time, money, and knowledge are just some of the resources that we use to manage money.

Working toward financial independence requires that learning to weigh carefully when time or money is more valuable.

One thing I ask myself often is, “Do I have more time or money?”  When I have more time than money, I make home-made meals instead of eating out.  I sew my kids Halloween costumes, instead of buying the overpriced Walmart version.  I spend time learning how to pick a good stock and manage my investments instead of handing them over to a firm.

As I’ve started side hustling, I’ve found my time is becoming more valuable.  Eventually, there may come a point when time is more valuable to me than money.


Prepare for retirement by investing.  If you ever want to get out of the rat race, really get out of it, you need an exit strategy – namely, a retirement fund.

If your investment resources are small, try micro investing with an easy-to-use app like Robinhood.  We put a few bucks into there every month, and my husband is experimenting with day-trading as a hobby.  You can even use this link to sign up and get a free stock!

If you have successfully saved up a bigger chunk to invest, open up a 401k or Roth IRA.  The benefits of each type of retirement account depend on your own needs, and I’m not going to recommend a financial institution because we manage our own retirement account right now.  However, this is a great opportunity for you to go learn!  A great place to start is my Retirement pinterest board – you can find articles there about everything from Roth IRA conversion to calculation your financial independence number.

Stay Motivated

Cutting down your expenses, putting money into savings instead of going out to eat… it can get exhausting.  Remember to treat yourself once in a while, but keep it reasonable!

My favorite way to stay motivated is to read about other people who are improving their finances.  My list of favorites is here.  Keep in mind that some of these people are a few years ahead – some of them have made their millions already.  Don’t let it get you down – let it give you hope!  They have great advice about how they got there!

The Takeaway

Financial independence is a bit of a nebulous concept.  For me, financial independence means having a healthy retirement, a strong emergency fund, and living without wondering how you will pay the bills.  These are the steps we are following.  Some months, making that retirement contribution is painful.  But having our wealth grow (slow as it may be) brings me financial peace that we are prepared for the future.  Even if you’re poor, you can start saving and learning to change your financial outlook, too!


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How to work toward financial independance

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