Blog — Sisters for Financial Independence (2024)

A waste audit doesn’t have to be strictly at home. Take a look at what is in your office desk bins. If you work in a office, you probably have your individual waste baskets. What trash are you generating? Can you bring some of these things from home instead so that you can avoid purchasing? You would be surprised at how much we spend just at work. If you work in a city like I did at one point (I worked in Manhattan), prices are definitely higher than normal anywhere else. Relative to income this may be OK but it’s still a cost. For me as an example, there was a period of time where my desk trash bin consisted of a few coffee cups, a foil wrapper for my bagel and a Styrofoam or plastic container for my lunch. What this actually meant was that I was spending at least around $25 a day just to eat. If we translate that further, I was essentially spending some of my time at work just to pay for my meals. It's sobering to start quantifying these things because they add up. The solution for me in the end was to have breakfast at home and bring lunch. It took a few habit changes, but it worked out in the end. I would just double dinners or prepped during weekends so that I have some to take to work. This resulted in me producing less waste, but also saving money in the long-run.

Another area to look at is what you are throwing away while you are out and about. Are you buying these things out of impulse or desire or real need? Sometimes, we get caught up in the "basic" lifestyle so we start spending like everyone else. If we want an unconventional life, we have to start thinking, living and spending our money differently. We have to start thinking about the consequences of our consumption. It is actually our consumption that is depleting our natural resources. There is an excess demand for extra stuff. This results in more being made and manufactured. The outcome is not only waste byproducts, but also wasted materials. The lifestyle of product is so short nowadays that it essentially goes from the store to our hands to the trash in a matter of days or even minutes. This means that the flow of our hard earned money also goes from our pocket to the trash pretty quickly. I also write over at Mother Earth Living and I have posed a few challenges if you are interested to see what you are consuming and how it affects the Earth and your wallet.

Continue with your trash audit, going room and by room and figure out what is being wasted. There's a lot of solutions out there to refuse, reuse and reduce. One other thing too, we take for granted that it also costs money to haul our trash away. If you live in a community where you have to pay for the size of your trash bin, it's worth looking into reducing this and saving yourself a few dollars a month.

Some other suggestions:

- If you have lots of packaging in your bins, take note of what they are for. Can you get these things second hand instead so that you can skip the packaging and save some money?

- If you have lots of food items, do a fridge and cupboard audit before going grocery shopping. Have your list handy along with specific recipes for the week. Start saving some jars to reuse for leftover storage and invest in a good Tupperware (I personally like the glass because it's easy to see what's inside though it can get heavy to carry) or stainless still lunch box so that you can bring leftovers to work, on picnics, etc. Learn to store food properly. Save the Food is a non-profit that encourages people to reduce food waste. Download their Save the Food Skill on Alexa and use it to learn how to store fresh vegetables and fruits.

- If you are seeing lots of coffee cups, invest in a reusable cup so that you can make your coffee at home or get a few cents off when you see it at Starbucks or other coffee shops. Make it a point to not get coffee if you don't have your cup. I recommend the Klean Kanteen Stainless Steel Insulated Cup with the loop cap (which I personally use) because you can seal it and just dump it in your bag and it keeps things cold or hot for hours and produces no condensation on the outside. The 16oz is a Grande at Starbucks.

- If you are seeing lots of plastic water bottles, invest in a reusable bottle. Again, I recommend the Klean Kanteen Stainless Steel Insulated Bottle. Bottled water is sometimes 100x the cost of tap water, it's not regulated and contains microplastics.

- If you are seeing lots of mailers and catalogs, time to opt-out of these shopping temptations and curb the online shopping. You can contact the stores to get your name removed from the list or head to Opt Out Prescreen to get your name removed from a few general mailing lists.

- If you are seeing remnants from bad habits like lots of cigarette butts or alcohol bottles, re-assess if this is where you want your money to be going.

I also want to briefly talk about donations because while this isn't trash per se, it is still the discarding of items. We sometimes give ourselves a pat on the back because we are donating items to organizations, but buying things that we don't need or use is detrimental to the Earth as well as to our pockets. Let's not give ourselves the excuse that "I can just donate an item later" when I get bored of it. Let's really think carefully about what we buy and what we spend our hard earned money on. Donations provide deductions, but it will never be as much as just saving the original dollar amount. I also want to drop a bit of reality into our good intentions of donating. Sometimes, some of these items end up in the trash anyways because there is 1) already an influx if stuff in the system that it's difficult for organizations to manage and store it, 2) some of the items are of low quality (like fast fashion) that other countries don't even want to deal with it and lastly, 3) the stuff is just outdated.

Blog — Sisters for Financial Independence (2024)

FAQs

What are the 7 steps to financial freedom? ›

You can too!
  • Save $1,000 for Your Starter Emergency Fund.
  • Pay Off All Debt (Except the House) Using the Debt Snowball.
  • Save 3–6 Months of Expenses in a Fully Funded Emergency Fund.
  • Invest 15% of Your Household Income in Retirement.
  • Save for Your Children's College Fund.
  • Pay Off Your Home Early.
  • Build Wealth and Give.

What is the formula for financial freedom? ›

50-20-30 rules is an easy way to know how to achieve financial freedom in 5 years. Split the cash-in-hand into 3 equal parts as per the rule. 30% of income is spent on wants, 50% on needs, and 20% is set aside for savings and investments.

What are 10 steps to financial freedom? ›

10 Steps to Achieve Financial Freedom
  • Understand Where You Are At. You can't gain financial freedom if you do not have a starting point. ...
  • View Money Positively. ...
  • Pay Yourself First. ...
  • Spend Less. ...
  • Buy Experiences Not Things. ...
  • Pay Off Debt. ...
  • Create Additional Sources of Income. ...
  • Invest in Your Future.

How much money do you need to be financially independent? ›

Americans say they'd need to earn about $94,000 a year on average to feel financially independent. That's about $20,000 more than the median household income of $74,580.

What are the 5 pillars of financial freedom? ›

The five pillars of financial planning—investments, income planning, insurance, tax planning, and estate planning— are a simple but comprehensive approach to financial planning.

What is the 50 20 30 budget rule? ›

Those will become part of your budget. The 50-30-20 rule recommends putting 50% of your money toward needs, 30% toward wants, and 20% toward savings. The savings category also includes money you will need to realize your future goals.

What is the 4% rule for financial freedom? ›

The 4% rule for retirement budgeting suggests that a retiree withdraw 4% of the balance in their retirement accounts in the first year after retiring and then withdraw the same dollar amount, adjusted for inflation, every year thereafter.

How do I calculate my wealth number? ›

Your net worth is your assets minus your liabilities. It's what you have left over after you pay all your liabilities.

What is passive income for financial freedom? ›

Through investments, royalties, rentals, and revenue, passive income is money you earn without the need for ongoing work. It's not linked to a regular job and doesn't require your constant attention. This means more freedom, flexibility, and cash for you.

How to retire early? ›

To retire early, you may need to max out your employer's retirement plan, individual retirement accounts (IRAs), health savings accounts (HSAs), and any other investment vehicles you use. Within your investment accounts, you might allocate funds to stocks, bonds, mutual funds and other investments.

What makes someone financially successful? ›

Successful savers and investors understand that they must have a sense of personal agency in the outcome of their situation—or what some in the behavioral finance community call an “internal locus of control.” They understand that they have choices as well as responsibilities to learn and understand those choices, that ...

How to be smart with your money? ›

5 steps for getting smarter about everyday finances
  1. Get a clear picture of your financials—now and down the road. ...
  2. Tomorrow's plans start with today's budget. ...
  3. Make your money work smarter, not harder. ...
  4. Remember that monthly bills can impact future goals. ...
  5. Use a banking app to save time and stay on top of your finances, 24/7.

Can I retire at 55 with 300k? ›

On average for a comfortable retirement, an individual will spend £43,100 a year, whilst the average couple in retirement spends £59,000 a year. This means if you retire at 55 with £300k, an individual will run out of funds in approximately 7 years, and a couple in 5 years. So, on paper, it doesn't look like enough.

At what age do most become financially independent? ›

Among the key findings: 45% of young adults say they are completely financially independent from their parents. Among those in their early 30s, that share rises to 67%, compared with 44% of those ages 25 to 29 and 16% of those ages 18 to 24.

Can you retire with 500k at 40? ›

The short answer is yes, $500,000 is enough for many retirees. The question is how that will work out for you. With an income source like Social Security, modes spending, and a bit of good luck, this is feasible. And when two people in your household get Social Security or pension income, it's even easier.

What are the Dave Ramsey 7 steps? ›

Dave Ramsey's 7 Budgeting Baby Steps
  • Step 1: Start an Emergency Fund. ...
  • Step 2: Focus on Debts. ...
  • Step 3: Complete Your Emergency Fund. ...
  • Step 4: Save for Retirement. ...
  • Step 5: Save for College Funds. ...
  • Step 6: Pay Off Your House. ...
  • Step 7: Build Wealth.
5 days ago

What is the 30 day rule? ›

The premise of the 30-day savings rule is straightforward: When faced with the temptation of an impulse purchase, wait 30 days before committing to the buy. During this time, take the opportunity to evaluate the necessity and impact of the purchase on your overall financial goals.

What are the 7 steps to Dave Ramsey's baby steps of savings? ›

Dave Ramsey's post
  • Put $1,000 in a beginner emergency fund.
  • Pay off all debt using the debt snowball.
  • Put 3–6 months of expenses into savings as a full. emergency fund.
  • Invest 15% of your household income for retirement.
  • Begin college funding for your kids.
  • Pay off your home early.
  • Build wealth and give generously.
Mar 19, 2024

What are the 3 building blocks of financial freedom? ›

The main aspects in achieving financial security is budgeting, reducing expenses, eliminating debt, and increasing savings. These four aspects are the building blocks to financial freedom and will help you kick-start your financial success.

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