Financial independence is the moment when your investments start paying more than your expenses. Once that happens, youre free.

Free from havingto work for a living.

Free from having to worry about paying rent on time.

And free from a TON of other financial obligations.

BUT how long would it take the average American to become financially independent?

Assuming you earn $75,000 a yearandyour annual expenses are about $60,000, you need to save roughly $1,500,000 to become financially independent.

When youre done picking your jaw up off the floor, Ill let you in on the process of how to get there:

There are no slick tactics or sexy ways to go about this. If youre the average American who needs $1,500,000 to hit your FIRE goal, you need to work hard and be determined. But the feeling of freedom when you reach financial independence will make it all worth it.

Were using the $1,500,000 goal based on the average salary and living expenses of Americans. If you want to find a number more specific to YOUR situation though, youll have to use the 4% Rule.

The 4% Rule is known as the safe withdrawal rate,or the amount of expenses you should be able to withdraw from your savings each year when you retire without touching the principal. (This number is based on a study from Trinity University.)

Finding out your safe withdrawal rate is the first step to learning how to become financially independent.

So how do you find out how much you need to save? Do two things:

This will give you enough expenses to withdraw 4% for years and years to come.

Heres a handy chart to show you how much youll need to save based on possible yearly expenses.

Using the above information coupled with your annual after-tax income, youll be able to come up with an annual savings rate (i.e., how much you need to save each year).

Luckily, you dont have to strain too hard with back-of-the-napkin math to figure it out, as there are a bunch of retirement calculators online. This one is our favorite. It outlines exactly how many years itll take to save depending on your savings rate.

Play around with the calculator until youve come up with a savings rate that works for you. After that, youll know exactly how much you should be saving every time you get a paycheck.

In terms of the percentage, I suggest you save 65% of your after-tax income, says Mad Fientist. That may seem like a ton but its possible. I averaged around 75% to 80% when I was saving.

Meanwhile, Physician on FIRE suggests you should actually save about 50% of your income to go towards your goals.

When pursuing FIRE, PoF says, keep in mind that youre locking yourself into the same lifestyle as when you reach financial independence. [So] if youre making too many frugal choices that dont jive with your persona, start living the way you want to and base your FI target on that.

Remember our example using the average salary and expenses? Looking at the chart, we know now that the average American needs to save about $1,500,000 in order to retire early. Our savings rate will then be about 32% of our annual income each year in order to save enough money to retire early (well go into how long itll take later).

Everyone that goes for FI has to decide something important:Should you try to live as frugally and retire as early as possible and minimize your expenses, or would you rathertake part in the finer things in lifebut retire later?

Luckily, there are two communities that embrace FIRE in different ways that can help you decide.

Bonus: Struggling to take control of your expenses? Check out my Ultimate Guide to Personal Finance to learn how to automate your finances so you can reach financial independence sooner.

There are typically two schools of thought when it comes to financial independence: leanFIRE and fatFIRE.

Though they sound more like weight loss supplements or descriptions of my latest mixtapethan systems for financial independence, theres no need to be intimidated by them.

LeanFIRE and fatFIRE are just terms for how much you plan to live on when you retire, the Mad Fientist says. Theres no better way. Just test out your spending until you find a method that works for you.

While both have the same goal of achieving financial independence, aspects such as how much you spend, save, and even quality of life can be affected by which approach you choose.

leanFIRE

This approach requires you to have a low spending rate each year (typically less than $40,000/year).

To be leanFIRE is to subsist on a comparatively low level of spending much like most of us did in college, PoF says.

This means adopting a frugal lifestyle and sacrificing certain luxuries like cars. It can even determine the places in the world you can live in (its easier to live cheaply in Norman, Oklahoma, than NYC for instance).

On the other side of the coin, theres a FIRE movement that aims to keep up the benefits of financial independence while still retaining a life of semi-luxury: fatFIRE.

Bonus: A higher salary could help you reach financial independence sooner. Check out my huge free guide to salary negotiation to get the raise you deserve.

fatFIRE

FatFIRE is the system of financial independence that allows you to live a more high-class lifestyle. But it takes longer to complete.

FatFIRE is to be financially independent on a more typical level of spending, PoF says. Id say to qualify as fat, your anticipated spending should probably be somewhere north of the national average.

According to PoF, thatd be an annual spending rate of around at least $80,000. That lends itself nicely to a round number of $2 million saved to have a budget with a 4% annual withdrawal rate, he says.

This is the practice that PoF embraces and his reason might convince you to pursue the lifestyle as well.

Lets assume you dont want to sacrifice your $60,000-a-year lifestyle and want to save enough money to get there. Youll need a higher rate of saving AND earning to do that

which brings us to:

Do you know how long itll take you to save $1,500,000 on a salary of $73,000 and a savings rate of 34%?

More than 26 years.

Thats a long time, and if you want to retire early, you might not want to wait that long.

Luckily theres a way to DRASTICALLY shorten that time: Earning more money.

Earning more allows you to increase your savings AND speed up your financial independence goals. While there are a lot of ways to make more money, the best way is starting a side hustle.Its a big win.

Below are our resources that have helped thousands of readers start their side hustles:

To help you get started, today, I want to show you how to find a great side hustle idea. Its one of the biggest barriers preventing people from starting their own business and making extra income. You can find a great idea by answering four simple questions about your life:

Find an answer to those questions and youll be on the same path as thousands of our students who have found a profitable business idea.

Bonus: Need help coming up with a business idea? Click here to receive your very own PDF of 30 proven business ideas.

A lot of us tend to DREAD the idea of cutting costs and with good reason. Thoughts of not being able to go to your favorite fast food restaurant or your father yelling at you when you change the thermostat just a fraction of a degree often crop up.

Scrutinize and be conscious of your spending, he says. If you see a nice BMW you think you want consider one thing: You could have the BMW or you could be a year closer to not having to work for anyone ever again. Framing it that way helps. Its not like youre saving. Youre working towards your financial freedom.

Conscious of your spending. Conscious spending

I wonder where Ive heard that before?

Conscious spending allows you to know exactly how much money is in your bank account to spend without you worrying about having to make rent and pay the bills, because its already been done for you.

How? Through automated finances. This is the system where your paycheck automatically divvies up and transfers to where it needs to go as soon as you receive it.

Heres a 12-minute video of Ramit explaining exactly how to do it.

NOTE: If youre pursuing financial independence, youre going to want to adjust the percentage of money you put away to savings when you implement your plan. You can choose to save around 65% like Mad Fientist suggests, or you can choose to put half your paycheck into your savings like PoF encourages. Or you could go a different route. Its all up to you and your savings goals.

Using a conscious spending plan also allows you to not sweat the small things you like.

Realize that the small stuff is just that small stuff, PoF says. The biggest expenses are the big stuff like housing, transportation, and travel. Dont rent or buy too much home, spend too much on a luxury auto or lengthy commute, and learn to be comfortable at a Comfort Inn.

Remember: cut things you DONT care about, to focus on the things you do. Dont just indiscriminately cut everything.

You can also learn to cut costs by leveraging retirement accounts that give you amazing tax advantages.

If you want to find out more about awesome accounts like the Roth IRA and 401k be sure to check out our articles on the topic:

But for now, I want to talk to you about an account with fantastic tax leverages you might not have heard of before: health savings accounts (HSA).

According to the Mad Fientist, HSAs are tax-advantaged savings accounts available for people who are enrolled in high-deductible health insurance plans.

He continues, HSA account holders can contribute pre-tax dollars to the account and can then withdraw money from the account, tax-free, when paying for qualified medical expenses.

So you contribute tax-free money AND withdraw tax-free money.

As of writing this, you can contribute $3,400/year for individuals and $6,750/year for familiesto an HSA. By maxing it out each year, you can reduce your taxable income by $3,400.

In 2018, the contribution limits for both individuals and families will go up to $3,450 and $6,900respectively.

Sure, you cant take the money out other than to pay for certain medical expenses but when you turn 65 you can without incurring any penalties.

That means all that tax-free money is yours, effectively lowering your taxed income over your lifetime by $3,400/year.

You should do all that you can to legally reduce your tax burden, PoF explains. If you max out your workplace retirement accounts and an HSA [Health Savings Account], you can deduct a significant sum from your taxable income. Theres only so much a wage earner can do, but do all that you can to pay the least and save the most.

Once you have your retirement accounts set up, youve taken steps to cut costs, and youre ready to earn more money, congrats! Youre on the road to early retirement.

Now I want to offer you something to dramatically cut down the time it takes to save for retirement even MORE:

This guide will give you the exact systems you need to help you earn extra income on the side and eventually achieve financial independence (if you want it).

Youll find our tactics to:

Download a FREE copy of the Ultimate Guide today by entering your name and email below and start your financial independence journey today.

Read more:

Financial Independence: How to achieve FIRE w/ $1.5 million

There are several myths and misnomers when it comes to financial planning, and individuals can take in a lot advice from many good and not-so-good sources. Mistakes can range from confusing high incomes with wealth to not knowing the importance of taxasset placementwhen choosing your investments. This article attempts to shed some light on these areas and to help provide individuals with some key insights that can lead to a more financially independent life.

This guide to financial independence is part of theHow to GetRichtrilogyfor new investors.

Most people believe the key to wealth is a high-paying job. Yes, it's easier to amass assets if you have more monthly income, but one key to increasing your net worth is to spend less than you make. Ultimately, spending habits are the reason a professional athlete making $20 million a year can quickly go bankrupt while a bus driver can retire a multi-millionaire. It may be a clich, but it is a fundamental reality of money.

To escape the spending trap, you need to understand the difference between income and long-term wealth. While income is an obvious component of wealth, it's not the only factor. Many people see wealth as their total net worth at any given time. In other words, wealth can be thought of as the equity on your balance sheetyour assets minusliabilities.

Thinking long term is an important characteristic of accumulating wealth and achieving financial independence regardless of your income level. There are several considerations for long-term wealth, and they will differ for everyone.

If you are a doctor or lawyer, you need to put in long hours after years of education and specialty training to get a paycheck. That paycheck, however, does not necessarily translate to wealth. With long-term thinking, helping to ensure your jobs security, taking initiative to achieve a promotion, or taking steps that will result in higher sales commissions can all be factors for wealth and ways to move toward financial independence.

Side gigs, private investments, and a host of other variables can also be ways to think long term and accumulate wealth. A few considerations here may include a portfolio of private businesses, car washes, parking garages, stocks, bonds, mutual funds, real estate, patents, or trademarks. Some of these cash generators can be relied on for long-term income in addition to your job or just as cash generators that can pull in money while you take long vacations or sit by the pool.

When you take a look at your personal balance sheet, you may already have organic investments you can rely on in your quest for financial independence. Oftentimes, this is wealth that generatescapital gains, income, and dividends without labor. The more of these investments you can afford, the sooner you can fully achieve financial independence.

Overall, the real value of your income is partially determined by the amount you can invest to achieve a financial independence goal. Setting this goal can be important for keeping your perspective on income in check. At your goal, you can successfully maintain the lifestyle you want without working.

Working with a financial adviser can help you to set a goal for wealth accumulation that allows you to maintain your standard of living without an additional paycheck and achieve the financial independence of your dreams. This goal can be lofty,however, as most peoples annual spending includes a long list of budget items, such as mortgage payments, car payments, clothing, college tuitions, music lessons, entertainment expenses, and more.

The only way to take advantage of investment opportunities is to have the money to invest. In successful investing, there is a certain point where you reach critical mass, and the returns generated on your assets can change your life.

Earning a 10% return on $10,000 is only going to net you $1,000 before taxeshardly earth-shattering. But the same return on a $1,000,000 portfolio is $100,000, which has far more utility despite requiring the same effort and research.

Amassing wealth and becoming financially independent is a slow process that takes time. You do small things every daycut your expenses, generate extra income, and put the money into brokerage and tax-deferred retirement accounts. With time, it begins to amount to something.

As each new opportunity appears, you can react on a larger scale than your previous investments. That's calledcompounding. It's when the interest, dividends, and capital gains your money has earned begin to generate their own interest, dividends, and capital gains, and on and on in a virtuous cycle. It's how $10,000 can grow to $2,890,000 over 50 years at a 12% return.

Not all income is equal. Where and how you hold your assets can mean the difference between being somewhat well off and obscenely rich. Those with little or no wealth generate a lot of taxable income, while those who end up financially independent generate large unrealized gains in the form of real estate appreciation, unrealized capital gains, and profits made through tax-advantaged or tax-free accounts, such as an IRAor401(k).

A physician earning $250,000 per year is going to get taxed heavily, probably paying $95,000 in taxes for a net income of $155,000. Yet, if he had earned the same amount from within a pension plan or IRA, he wouldn't pay a single penny in taxes. That's an extra $95,000 per year compounding for him. At 12% over 30 years, that's an extra $23 million in wealth. That's right$23,000,000 simply because the money is earned within a tax-advantaged account instead of regular labor.

This is why you should do everything you can, within reason, to fully fund your retirement plans, as well as to focus on how your seemingly small decisions help or hurt tax planning. No decision is too small.

Gaining complete control over your time is often one factor in achieving financial independence. You may not have totally reached the investing goal that allows you to maintain your lifestyle without an additional paycheck, but if you have the freedom to spend your time how you want to, that might be the most powerful definition of wealth for you.

If each morning, when you show up to the office, or the job site, or the practice field, or studio, it feels like you are unwrapping a Christmas giftthen you are on track for achieving financial independence.

If you find the profession that gives you that feeling, and you are disciplined in managing the business side of it by controlling costs, you have a huge advantage over your competition. You may continue to work 8, 10, 12 hours a day or two, four, or 10 years longer, not because you need to, but because you love the process and product itself.

According to decades of extensive research by Thomas J. Stanley, Ph.D., author ofThe Millionaire Next Door, the grades one earns in school have no correlation with the economic wealth and success outside the medical and legal professions. That's not to say education isn't important88% of American millionaires did, in fact, graduate with an undergraduate degreebut academic performance is not all it's cracked up to be.

Why then, do parents, teachers, and counselors continue to tell children that they won't be successful if they have a C- GPA? Statistically speaking, according to Stanley, it's because often these people are themselves not financially successful. Therefore, they have no idea what it takes to achieve financial independence and thus buy into the great myth that good students go further in life. They measure analytical intelligence only and not the creative intelligence that is responsible for sparking innovations, societal advancements, and crafting solutions in niche markets that so many others miss.

They also fail to realize that most millionaires wear blue jeans, overalls, or work shirts, not a suit and tie. They eat McDonald's and Burger King. They live in ordinary, well-established neighborhoods. Most own their own business.

Statistically, if you want to guess who is going to be wealthy and financially independent, you'd be more likely to guess right choosing a self-sufficient student in shop class who paid for their own car, gets decent (but not spectacular) grades, has a job, and enjoys what they do than selecting someone from the honor roll. It's counterintuitive, but it's often true.

No matter how successful you are, unless your spouse is equally disciplined, frugal, and investment-oriented, your efforts toward a better, financially independent life are going to feel like struggling in quicksand.

The emotional, financial, and social toll that marrying the wrong person can take on your life will overwhelm almost any progress you can make in your career or pocketbook. As you try to build a life, they will be out spending your money, making it nearly impossible for you to achieve financial independence.

It may sound surprising, but a tremendous amount of success is based on proper temperament and psychology. How can you focus on your work and creating the life you always dreamed of if you are worried about the situation at home? To truly build a life, you need to have the kind of support that allows you to take risks because you know, no matter what happens, there will always be someone waiting for you at home who loves you unconditionally and shares your overarching financial goals.

Billionaire investorCharlie Mungerhas remarked that entrepreneurs can thrive if they specialize in an overlooked economic niche, much like animals in nature. Often, these niches are extremely lucrative but not likely to win you friends at cocktail parties.

Conjure up images of a multi-millionaire. What do you see? High-tech 20-somethings on a yacht? Molecular biologists? Although there are a few, most of the big money is in industries such as waste management, pizza, clothing stores, trailer parks, candles, and shipping.

Consider the case ofSam Walton. He built a tiny dime store from the corner of Arkansas into the biggest retailer in the world, amassing a family fortune of more than $191 billion.

There's nothing particularly exciting about selling 50-cent flip-flops and bottles of cheap cologne in small towns, but Walton was on a mission to bring affordable goods to everyday Americans. He was a man possessed with vision. He built his company one store at a timeone might even say one checkout at a timewith no fanfare or red carpet walks.

Business owners represent a disproportionately large segment of the millionaire population. It's hard to believe, but there's a good chance that the biggest hardware store owner or plumber in your town has a net worth many times that of the highest-paid doctor. Part of the reason is a concept we've discussed called capitalized earnings. Another reason is one Dr. Stanley mentioned in his book. Doctors are pressured to buy status symbols to convince their patients they are successful. Not the plumber. They can put more money into retirement accounts. Over decades, the result is millions in additional wealth for the guy who unclogged toilets instead of arteries. That's not something you learn about in school.

It is almost always a mistake to provide gifts of cash and support to those relatives who are unable to generate high incomes on their own or who are constantly in financial trouble.

Consider the incentive system you set up. One son becomes a physician and one daughter an attorney and you say they don't "need" your money, while at the same time you provide free rent, board, and bailouts for their sibling, who sits at home in credit card debt but refuses to look for work.

You have managed to effectively turn that child into a financial and credit junkie; its unlikely they'll ever get over their addiction. The child may tell you that they only need one more loan, but the fundamental, underlying problem is theinability to manage money. The support you give to your relatives should help them become financially independent themselves, not create a dependence on you. That's one way to ensure you'll never have financial freedom.

Read the original here:

How to Become Financially Independent - The Balance

Balloons flying free

Retirement can be defined as achieving financial independence in the third stage of life - typically after age 62 when you can claim Social Security.

Theres also a rapidly growing movement around FIRE (Financial Independence Retirement Early) where people aim to achieve financial independence and gain complete control over their scarcest resource, their time, at a much younger age. There are multiple FIRE communities with tens of thousands of people online who are trying to achieve financial independence in 10-15 years vs a traditional career of 40 years; one of the most active is ChooseFI. Theres even a movie coming out about it in 2019 Playing with FIRE.

Its worth noting that early retirement is still the exception with less than 1% of the population retiring before 50.

Traditional Retirement Still Dominates

What is Financial Independence

JD Roth, one of the original personal finance bloggers, defines it this way: 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.

Hes even written a handy article on the six stages of financial independence - which is a great way to break down the problem and assess your own progress.

How to Achieve Financial Independence

To answer the question of how to achieve financial independence its worth examining the approach taken by the FIRE community since they have a bigger hurdle than traditional retirees, because they cant yet use Social Security or Medicare and have to fund a longer time period.

So lets look at the method used by FIRE and then we can explore some of the additional levers that traditional retirement people can use.

FIRE Method

The FIRE method basically comes down to a few core ideas - cut your expenses, save > 50% of your income and invest efficiently. Frugality is key for FIRE and youll see why below.

The typical approach to achieving FIRE is:

Traditional Retirement Method

Even though FIRE is hard to achieve and may by very hard for people with children, special needs or who live in HCOL (high cost of living) areas, there are still lessons for folks pursuing traditional retirement.

Traditional retirement provides for some key benefits for older people since they can take advantage of mortality credits - basically the fact that they have a shorter life expectancy means higher benefits in programs and products like Social Security, Medicare, Annuities and home equity products like Reverse Mortgages.

The retirement planning method that we follow at NewRetirement is:

The good news is that the body of knowledge about how to plan and achieve a secure retirement is growing. As more people enter retirement the market is getting more efficient with lower fees and more transparency across the board. A great way to get started is to use a simple retirement calculator to see where you stand and take the first step.

Read more here:

Achieving Financial Independence at Any Age - Forbes

Updated: February 12 2020 | Grant Sabatier This article includes links which we may receive compensation for if you click, at no cost to you.

We live in such a remarkable time. Its never been easier in history to make enough money to live a life you love.

People even 20 years ago would be so jealous of the opportunities we have today to live the life we want. We can work anywhere. Travel the world for less. This is at the core of the FIRE (financial independence retire early) movement.

And there are so many incredible blueprints for living a non-traditional life where youre stuck in a cubicle all day doing work you hate.

Theres a growing movement of people choosing to live life on their own terms. And Im part of it. Were the FIRE movement.

It truly can change your life. FIRE definitely changed mine. But when I started my own financial independence journey in 2010, there wasnt a movement yet.

We were a relatively small group of people all over the world using money as a tool to create more freedom in our lives. We figured out that the higher your savings rate the faster you can retire early.

Between 2010 and 2015 I launched a bunch of side hustles, saved upwards of 82% of my income and invested my money so it could grow.

This helped me reach financial independence and retire at the age of 30. I wrote an entire book about my journey and a step-by-step blueprint that anyone can follow titled Financial Freedom: A Proven Path to All The Money You Will Ever Need(Penguin Random House).

FI stands for financial independence.

While there are many definitions of financial independence, a simple way to sum it up, is you have reached financial independence when you are free from the worry of money.

For some people, this happens when theyd gotten out of debt and for others its the moment when you no longer have to work for money.

RE stands for retire early.

As surprising as it may seem, there are also many definitions of early retirement.

For some, it means the moment when you check out and never work again for the rest of your life (aka old school retirement).

But for others retiring early simply means theyve gotten to the point where they no longer have to work, but they might keep working, or switch to a job that they are more passionate about.

When you put FI and RE together you get FIRE.

But FIRE is more than just about money or personal finance optimization, its more about life optimization. The central question is What makes you happy? and aligning your spending and saving, and financial life around maximizing your happiness.

With that goal in mind, the FIRE movement also integrates psychology and philosophical concepts from other movements like Stoicism and even Buddhism.

Financial Independence Retire Early (FIRE) is ultimately a personal journey.

There are also many facets of FIRE that have spring up over the years:

New pockets of the FIRE movement seem to be popping up every day.

As you can see what FIRE means is ultimately up to you. Thats the beauty of it -- you truly can create your own path.

While the origins of the movement are hotly debated and evidently the term FIRE was first coined in an old Motley Fool forum sometime in the early 90s, the FIRE movement largely began in 1992 with the publication of one of my all-time favorite books, Your Money or Your Lifeby Joe Dominguez and Vicki Robin.

In the book, they outline a simple yet transcendent idea: that whenever youre working your actually trading your life energy for money. So whenever you buy something you should think about it in terms of hours of your life since you can always go out and make more money, but you can never get back your time.

To explore the 9 Steps in Your Money or Your Life check out the Free 5 Day Your Money or Your Life Email Course.

Hanging out with Vicki Robin the Godmother of the FIRE Movement on Whidbey Island, Washington

When I read Your Money or Your Life in August 2010 it completely changed my life. Over the past few years, Ive had the opportunity to become close friends with the co-author Vicki Robin and she graciously wrote the foreword to my book.

I feel so grateful to be able to work closely with Vicki to help make financial independence available to everyone.

But back 8 years ago when I started my own financial independence and early retirement journey, there were very few people on the FIRE path. In fact, I only knew of a handful of what are now known as FIRE bloggers.

Today there are thousands of bloggers documenting their financial independence journeys, an incredibly active financial independence subreddit, hundreds of podcasts, and even a documentary about the FIRE movement that Im in called Playing with FIRE that will be released soon and includes others members of the financial independence retire early community.

Im so stoked about it. Check out a preview of the documentary below.

Also, any good movement needs a folk song and there wasnt one about the FIRE movement so I wrote one. Heres me playing my FIRE movement folk song.

For anyone interested in the FIRE Movement, heres how it works.

Its simple in theory (which is why I could sum it up in a 90-second song) but is a little more challenging in execution.

To make it as simple as possible, here are the 9 steps to reach FIRE (financial independence retire early).

The biggest problem with mainstream personal finance and money advice is its all about the money!

But whats more important than money is life. You can always go out and make more money, but you can never get back your time. So before you even start thinking about the money, first think about what kind of life you want to live. Seriously, write it down.

What does the perfect day look like? Why is it perfect? What are the 10 things that make you happiest?

When I did this exercise I quickly realized that most of the things I enjoy most in life are actually pretty inexpensive or even free. It doesnt cost any money to walk my dog in a park on a Saturday, play guitar with my friends, or board games with my wife.

Once I started thinking in terms of the life I wanted to live and what I enjoyed most, it became easier to prioritize where to spend my money and where to save.

At the end of the day money only matters if you live a life you love. Ive always believed that money is not the goal, time is. But you need to think about what kind of life you want to live -- what is important to you?

Its always easier in life to chase that next thing -- whether its the next job promotion, raise, or save 1 million dollars.

Whats harder to do is take the time to figure out what actually makes you happy and what kind of life you want to live. But once you look within instead of just outside, the easier it will be to plan for financial freedom.

The next step is to figure out how much money you need to live that life awesome life! I remember being in college and dreaming about driving a Maserati and living in a big lake house, but now when I see a Maserati driving down the road I dont see $200,000, I see $1,200,000 in 30 years!

In 2010 when I started my financial independence journey, I didnt set a goal for how long it would take. All I knew was that when I did the math I was never going to be able to retire if I was only able to save 5-10% of a $40,000 -- $50,000 income.

The math I did was pretty simple. If I was able to save $5,000 per year maximum, even with an expected compounding rate of 6%, I would have about $433,000 in 30 years. While that might seem like a lot of money today,its not going to be that much in 30 years, because of two expected variables--taxes and inflation.

You will need to pay tax on that money when you take it out, assuming a 30% tax rate that cuts the after-tax value to $308,000, which when adjusted for 2% annual conservative inflation amount (it could be higher than this even!), then the future value of that money after taxes and inflation is approximately $170,000.

While $170,000 is still a lot of money, its not going to be in 30 years. It definitely wont be enough to live on for 20+ years.

Typical wisdom is that you need 25x your annual expenses to retire early. When I did this calculation, I anticipated my annual expenses would be at least $50,000 in the future (who knows if I will actually be able to live off $50,000 in the future--I sure hope so!).

But it was the best starting point I had, so by simply multiplying 25x by $50,000, I determined that I would need to save $1,250,000. Thats a big number, but it was my target.

You can sit down with a piece of paper and see how much money you need to retire early by checking this calculator I built.

Saving is an opportunity to live a life you love. Its not a sacrifice. As long as you view it as a sacrifice youre always going be in a scarcity mindset.

The only way that youll be able to reach financial freedom and FIRE is by saving as much money as you can and investing it to grow.

Remember what I said about living differently? A 50% saving/investing rate is more common than you would think amongst the FIRE (financial independence early retirement) crowd. I know a lot of people that save this much each month because they get it.

Saving 50%+ of your income is definitely going against the status quo, but thats how you fast track wealth. If you want to go deeper, here are two posts onhow much money you should be saving and my investing strategy.

The easiest way to monitor how much money youre saving is by tracking whats known as your savings rate. Your savings rate is simply the percentage of your income(s) that you are saving.

To calculate your savings rate, you want to add up all of the dollars that you save, both in pretax accounts (for example, 401(k)s and IRAs) and after-tax accounts (brokerage) and divide it by your income.

Here is an example of how it looks if you have a $100,000 income and are saving 40 percent.

Its pretty simple. The more money you can save the faster, and bigger, it can grow. The average savings rate in the United States is currently around 3.2%, which based on simple math means that a majority of Americans will never be able to retire.

But if you can get that savings rate to 20%, 30%, or even 50% youll be able to cut years and even decades off of your retirement.

Keeping a budget is really hard and its what stops most people from really fast tracking their financial independence.

Im not going to tell you to create a budget or cut back on all of your expenses. What you need is to balance how much you spend. Ive always viewed saving as an opportunity, not a sacrifice.

But you do need to find a way to reduce how much you are spending so you can increase how much you save.

The easiest way to do it is by cutting back on your housing, transportation, and food costs. The average American spends 70% of their money on housing, transportation, and food, so if you can spend less on them (say 25% or so, then you can bank the difference). If you move to a smaller apartment, walk to work, and cook at home, you could realistically increase your savings rate to 25%+ or even higher.

By reducing what I spent on my housing, transportation, and food costs, I increased my savings rate to 40% and sometimes as high as 80% while I was fast tracking my financial independence. The only way I was able to fast track was by cutting way back on my living expenses and investing the difference.

Focus on where you spend the most money to save the most money. Cut back your housing expense as much as you can through a strategy known as house hacking where you rent or buy a 3 or 4 bedroom apartment or house and rent out the other room. Youre going to save a lot more money doing that than by cutting out things like your $5 latte.

Im not here to tell you what to buy or not to buy, but its important to recognize that whenever you buy anything youre actually trading your future freedom for it.

At the end of the day it comes down to a personal choice, but I was happy moving to a smaller apartment, moving closer to my office, and eating out less, to bank the difference. And I definitely was able to bank the difference--saving at least an additional $13,000 per year by cutting back.

While I dont have the exact figures, I estimate that cutting back for 2 years, before buying my first home, I was able to save about $25,000 that I invested in 2011 and 2012, and that cutting back is now worth more than $100,000 in my investment accounts. Im going to continue to let it grow and hopefully making that decision 2 years ago will compound in 20 years into a lot more money. It was totally worth cutting back on my three biggest expenses. Try it out.

When I was on my own financial independence journey I calculated that for every $100 I saved I was buying a week of freedom in the future.

Not all debt is created equal. There is good debt vs bad debt. Some debt you lose money on and some debt you can make money with.

Good debt is debt like mortgage debt you use for investing in real estate or building a real estate empire or in some cases student loan debt if it helps you get a better job or make more money over your career.

Bad debt is credit card debt since the interest rate on it is probably over 20%. Pay down any credit card debt you have immediately since you are losing money with it.

While there are a bunch of different debt payoff strategies, the best strategy is simply to pay down your debt with the highest interest rate first, which in most cases is going to be credit card debt, then any personal loans, followed by student loans, and then mortgages.

The simple rationale is that compounding works both ways, meaning that just like your investments can grow and compound over time, so can your debt.

So whenever youre paying off a debt you want to pay down your highest interest rate debt because its like getting that percentage return on your money.

If you pay off your 20% interest rate credit card its like you made 20% because your debt is no longer growing, as opposed to paying down your student loan balance with a 5% interest rate where youd only be getting 5% on your money.

Since your full-time job is where youre likely currently making the most money, its important to try and get paid as much as possible.

The simple fact is that most people deserve a raise, but theyre too afraid to ask for one. The impact of a single raise of a few thousands of dollars can actually add up to tons of additional money over time.

Just getting 1 percent bigger raises each year can make you literally hundreds of thousands of dollars richer over the next twenty to thirty years by investing and compounding that small raise difference.

A simple study that looked at an annual 3 percent versus a 4 percent raise each year showed that after thirty years the 4 percent raise was worth $578,549 more when that small 1 percent difference was invested in the stock market.

This is because your future earning potential is impacted by your base salary today. Most people are underpaid in their roles, but many dont do anything about it.

Eighty-nine percent of Americans believe they deserve a raise, but only 54 percent plan to ask for one in the next year.

We typically spend more time planning for a vacation than working to improve and optimize our careers, which is a missed opportunity.

In reality, most of the jobs that will exist in 20 years havent even been created yet, so while traditional advice is that you should become an expert in one thing, its actually more valuable to have a broad range of complementary skill sets.

For example, if you know how to use Google Analytics, you should also learn about branding and how to start a blog.

A side hustle is anything you do to make money outside of your full-time job.

While you can make money doing literally anything, the best side hustles are the ones where you can make money doing something you actually enjoy and where you can control what youre getting paid and when you work.

Far too many people drive for Lyft or Uber and are limited by the hours in a day they have to drive and what they get paid because the rates are set by the company, not the drivers.

While there is an infinite number of side hustles that you can launch, I like the side hustles that you can do online because they give you the ultimate flexibility to make money from anywhere in the world and on your own time.

Some of the best current side hustles are learning how to become a virtual assistant, start a blog using Bluehost (check out how to make money blogging), and running Facebook ads.

Its essential to switch from a saving to an investing mindset. Its not possible to fast track financial independence by keeping your money in a savings account--investing is an essential ingredient.

I have made more money through investing than anything else and most of it in my sleep! Just recently, I was looking at my investing returns over a 90 day period and realized that I had made over $15,000 in gains from one of my investments, which is more money than I made in 6 months working at my first job after college. If you really want to make money, then you need to be investing as much money as you can.

Investing your money is what really accelerates your ability to reach financial freedom faster because your money starts making money and then the growth accelerates.

While you can invest in literally anything, the most dependable investments are stocks, bonds, and real estate. You need a short term investing strategy (money youre going to need in the next 5 years) and long term investing strategy (for the money youre going to need in 10+ years).

Note: Its always worth keeping at least 6 months of expenses saved in high-interest online savings account for any unexpected emergencies in whats known as an emergency fund.

Your short term investments should be kept in a high interest online savings account and your long term investments for retirement should be largely kept in low cost highly diversified index funds like the Vanguard Total Stock Market Index Fund (VTSAX) or something similar that holds most of the stocks in the U.S. stock market.

More here:

The FIRE Movement | Financial Independence Retire Early

Fueled by the news of ballooning student loans and pernicious credit card debt, a small but growing group of Americans are taking control of their money.

Part of the financial independence, retire early or FIRE movement, they are committed to saving money from their corporate jobs and even taking on side hustles to build additional income.

Aiming to save money - oftentimes 60% to 70% of their incomes - a group of Americans are taking ... [+] control of their personal finances, and participating in the financial independence, retire early movement.

Their goal? Build a substantial nest egg and then retire. Although many end up working in what they call retirement - running blogs or taking care of kids - the idea is to achieve financial independence, whereby they can choose their activities, rather than be tied to a workplace for a paycheck.

Inspired by the 2008 personal finance book Your Money or Your Life by Vicki Robin and Joe Dominguez, they promote what many Americans would consider to be unusual tactics to cutting costs from driving 30 year old cars to living in 52 square foot room.

And while every FIRE practitioner takes a different tact, here are three of the bigger names in the movement on how much theyd saved by 30, as well as a tactic they used to up their savings rate.

Fidelity recommends that the average American to have one year of their salary saved for retirement by 30. So if you make $50,000 a year, you should have $50,000 in a retirement account. Heres how these money experts in the financial independence, retire early movement compared.

Jillian Johnsrud of Montana Money Adventures

Saved (with husband) : $375,000, plus a pension valued at $400,000

Jillian Johnsrud and her husband saved nearly half a million dollars in order to fund their ... [+] Financial Independence, Retire Early lifestyle with five children.

My husband and I committed to saving half our income when we got married. Because we never earned six-figures that meant driving older cars, having a roommateeven after we had kids and finding low cost meals. I was passionate about travel, so we accepted a duty station in Europe and were able to travel frugally by driving and camping. We also opted to buy a home that needed a lot of work and slowly learned how to fix and upgrade it ourselves, which came in handy in the rentals we bought next.

Julien Saunders of Rich And Regular

Saved: around $20,000

By 30, Julien Saunders had saved over $20,000 in order to reach financial independence, retire early ... [+] by his late 30s.

In 2010 I was 30, and I had about $20,000 saved, between a savings account, a traditional IRA carried over from my twenties and one year of contributions to a 401k. It was during this time, I realized how little joy I got from cable and decided to cut the cord for good.

I then took it a step further and downgraded my cable internet to a high speed DSL service which was significantly less expensive and worked just as well for my needs.I've not had cable TV since and didn't regain cable internet until 2018. Every little bit helps!

Steph and Cel of Incoming Assets

Saved (together) by 30: $211, 658

Vancouverites Steph and Cel love to travel, and thanks to their frugal lifestyle they can visit far ... [+] flung destinations, while still working towards their financial independence retire early goals.

The only expense we ever really curtailed was lifestyle inflation. When we first met our income was very low and our spending reflected that. Then as we went from poverty-level income to normal income, we just kept our spending the same. Early on we did cut out a weekly home grocery delivery service that we had been using for a few years, though that was also inspired by their warehouse getting a nasty aphid infestation.

Originally posted here:

This Is How Much These Finance Experts Saved By 30 To Retire Early - Forbes

Like a lot of millennials, I long assumed I'd never be able to retire, so I didn't bother saving for retirement. I also felt like I could barely make a dent in a savings account for most of my 20s anyway, as I was busy paying off debt and trying to find a decent-paying job.

However, as I approached 30, my mindset changed. I started to think more about what I wanted my future to look like, and not just a year or two in advance, but a decade or two. I also watched my dad and stepmom retire in their early 50s, more than a decade before most of their peers.

Suddenly, I wanted to be able to retire early. The only problem was that I felt way too far behind.

My savings account balance hovered around $0 for most of my 20s. The few times I managed to save up money, or contributed to my 401(k) for a few years, I just as quickly drained it to travel or move across the country.

At age 29, I finally paid off all my debt and started a small emergency savings fund. By the time I turned 30, I was debt-free, and I'd built up my emergency savings fund to cover a year's worth of basic living expenses. However, by my 30th birthday, I still had $0 saved for retirement.

I kept saving, though, and a few months into my 30th year I had enough extra money stashed away to invest in index funds with Vanguard. I opened an account and finally started my retirement fund with a $10,000 balance.

I decided to set a goal for myself to retire by 50, despite having just started saving at age 30. That would give me 20 years to save and invest enough money to retire.

My dad's original goal was to retire by 50, so it seemed like a good age to me. Learning about the FIRE movement (financial independence, retire early) also inspired me to do this. It's all about changing up your lifestyle so you can increase your savings rate as much as possible, and then investing all of your savings until you have enough money invested that you can draw a salary from the dividends your investments earn.

Most members of this movement aim to retire much quicker, often within the next 10 years, or in their 30s and 40s. They do this by living frugally and saving at least 50% of their income, (a lot save 75%). In retirement, they often continue to live just as frugally.

To be honest, I'm not interested in living frugally, now or in retirement. So, I decided to meet the FIRE movement in the middle and give myself 20 years to save for retirement and achieve "financial independence," meaning I could live off my investments. To achieve this, you need to achieve a net worth that's 25 times your annual living expenses.

Using an early retirement calculator, I set my age to 30, my annual income to $80,000, my annual expenses to $45,000, and my current net worth to $10,000. These numbers gave me the magic age I was looking for: financial independence by 50.

With my savings rate at 44%, this plan is considered too spendy for most people in the early retirement movement. However, I felt that it was a reasonable compromise that would allow me to fully enjoy my life now while still achieving financial independence early on in life.

Under my current plan, my monthly expenses have to stay below $3,750 so that I can save $2,917 each month. If my income increases dramatically, I'll try to increase my savings rate along with it instead of falling prey to lifestyle inflation and spending all of that extra money. That way, I might retire even earlier, or I have an extra cushion in case my income ever takes a hit.

Switching to remote work and self-employment has, ironically, helped me save a lot of money. I have control over my income and can learn new, lucrative skills that allow me to demand higher rates and make more money.

I can also work from anywhere in the world, allowing me to live in low cost-of-living areas while making a higher salary. I moved abroad where I can afford to live the lifestyle I want without going into debt.

My strategy for keeping my savings rate up is to focus on keeping my three biggest fixed costs to a minimum: housing, transportation, and food. To be fair, I don't always keep my food costs to a minimum. But I make up for it by finding places to rent that are extremely low cost, by either living outside of city centers or renting with roommates, and getting around on foot and by public transportation. I don't own a car.

This won't work for everyone. Your own preferences and needs will dictate where you can and can't cut costs. However, if you're willing to make some big changes to your current life, it's possible to retire a lot earlier than you think.

Excerpt from:

My plan to retire by 50, even though I've never saved for retirement - Business Insider

The 50th anniversary of the first Womens Liberation Conference in Oxford was planned as a celebration of social struggle and triumphant survival. But on Saturday morning the event quickly turned into an angry and full-throated demonstration of the ongoing arguments inside the movement.

The alleged no platforming of feminist historian Selina Todd the night before the conference prompted loud protests from the packed hall at the former site of Ruskin College, the spot of the original meeting in 1970. This is cowardice. How can we do this to a woman who has worked all her life on behalf of other disenfranchised women? asked Julie Bindel, the radical feminist writer.

Organisers said that Todd had not been banned from the conference, but was asked to give up her short thank you speech slot on behalf of the Oxford University history faculty in response to a boycott threat from other speakers.

Author Lola Olufemi, a billed panellist who had pulled out of the event when she learned of Todds involvement, said in a statement that she felt the conference planners had not done enough to investigate Todds alignment with the Womans Place UK group, which she regards as transphobic. I have seen first-hand how middle-class white women with social capital have used their gatekeeping power to harass trans people, threaten them with defamation, actively work to curtail their rights, refused to extend solidarity, and then claim victimhood, she said, explaining why she withdrew from the event.

Womans Place UK is pushing for government ministers to consult more widely about changes to the Gender Recognition Act, which would allow people to legally self-identify as a man or a woman without medical approval. It rejects accusations that it is transphobic and trans-exclusionist. Its founders say it aims to ensure that womens voices are heard and our sex-based rights upheld. However, critics say it is trying to limit the rights of trans people.

Todd was re-invited into the hall after a show of hands in favour from a large majority, among them at least 15 women who were at the 1970 conference, including Sheila Rowbotham, Sue OSullivan and Sally Alexander, the activist played by Keira Knightley in the new film Misbehaviour.

Todd did not appear at the morning session, but a statement issued in criticism of her treatment and distributed around the hall said: Selina Todd supports the right of women and girls to same-sex spaces (such as refuges). This is enshrined in law. Her opponents believe the law should be changed. They arent willing to engage in respectful debate with those who disagree, preferring to silence feminists.

The text of Todds undelivered speech to the conference opened with thanks to Ruskin College, the trade union-sponsored educational establishment now based outside the city in Headington, as the place where her parents had met in 1967. Of feminisms future, she would have said: Weve got far to go and its easy to despair. But history reminds us feminism never starts from a good place: it is borne from oppression.

The BBC presenter Samira Ahmed also addressed the conference, saying she was concerned by the no platforming of Todd as she believed it was important to listen to each other.

Speaking about her recent battle for equal pay, one of four key demands back in 1970, she said: I never thought I would have to make a sex discrimination pay claim. I thought it would all be sorted.

Other demands of the original conference were improved education, 24-hour nurseries, free contraception and abortion on demand.

The mood of the 40th anniversary events was comparatively warm and nostalgic, according to accounts. The 50th birthday row, it seems, was much more in keeping with the fiery debate of the first conference, which had been called for by Rowbotham and was initially focused on womens collective history until it was realised so little had ever been recorded. Instead it turned to contemporary issues, and in a then radical twist, men ran a creche so that any mothers were free to speak.

Alexander, who as a student helped set up the first event, said she recalled it as episodic and chaotic. We had expected 100 women and 600 came, she said, going on to praise the calm manner of Sue Vickery who chaired the 1970 event. We were feeling our way, she said, and borrowing the vocabulary of other movements, like the civil rights campaign. We used the word woman then with a sense of enthusiasm and pride. The phrase Womens Liberation raised fear then for ourselves and for others, and sometimes it still does.

Seven other national Womens Liberation Movement conferences followed the initial Oxford event in 1970. Further central demands were added along the way, including legal and financial independence for all women, an end to discrimination against lesbians, freedom from intimidation by the threat or use of violence or sexual coercion, either in or outside marriage, and an end to laws and assumptions that shore up the male domination of women.

Most pertinently though it had different significance then a controversial decision made at the Birmingham conference put the right to a self-defined sexuality at the top as a preface to all the other demands.

See the original post:

Echoes of 1970 as row breaks out at celebration of feminist conference - The Guardian

Like many of our late-middle-aged peers, we have too much stuff. The garage is full of tools, utensils, scraps of wood and metal, bicycles and bicycle parts, coolers, boxes of old magazines and newspapers and stacked storage bins filled with things I couldnt bear to get rid of. Alas, theres no room for our cars.

And then theres the house and basement. We have about 4,000 books, more than 250 prints, paintings, ceramics and sculptures and the usual array of furniture, electronics, clothing, appliances large and small and enough kitchen stuff to equip a medium-sized restaurant.

It wasnt always thus. During my 20s, I lived on a medium-sized sailboat, and had no stuff. There was space for everything necessary and no space for anything else. It was great until real life intervened and I found myself married with kids, living in Rockrimmon.

And so began the era of acquisition and accumulation. We bought stuff and replaced it with better stuff. We moved into a bigger house, and bought bigger furniture. Marie Kondo had yet to tell us that we didnt own our stuff it owned us.

We were obedient consumers, doing our part to fuel the stuff-based economy. At the time, it seemed like an endless and beneficent cycle buy things, keep the good stuff, preserve tangible memories, care for treasures passed down from past generations and eventually give everything to the kids and move to Florida.

But what if the kids dont want any stuff? Gen X, Millennials and Gen Z seem more attracted to uncluttered lives, reduced carbon footprints and the freedom and flexibility of stuff-free lives. They prefer clean, spare spaces without much visual clutter. They dont want to be burdened by oriental rugs, shelves of books, antique furniture or gilt-framed 19th century landscape paintings.

Their preferences may combine with other trends to reconfigure our economy locally, as well as nationally. Downtowns explosive growth has been strongly influenced by minimalist adults who prefer urban amenities to suburban commutes. Automobiles are seen as expensive pains in the butt, not buoyant symbols of freedom and mobility. And climate change? Its real, its happening now and we have to radically alter our lifestyles to prevent it from destroying civilization. Every one of us ought to travel less, walk and bike more and temper consumption.

Consider FIRE, the movement to combine frugal living and savings rates of 50-70 percent of income to achieve financial independence within 10-15 years and retire early. The concept, first framed by Vicki Robin and Joe Dominguez in their 1992 book Your Money or Your Life: Transforming Your Relationship with Money and Achieving Financial Independence, is to stop trading your time for money to buy consumer goods.

Youre buying back your life, said Robin, Your one wild and precious life. Minimalists remind us that time is irreplaceable and that We spend money we dont have to buy things we dont need to impress people we dont even know.

Do these related phenomena signal a major cultural shift?

If so, legacy companies like Ford may go broke and our easternmost suburbs may stop expanding long before they reach the Kansas line. Amazon may hire a couple thousand folks in Colorado Springs, but many more may lose their jobs as retail outlets continue to close or shrink.

Given our military/military contractor economic base, were well positioned to avoid the worst of the coming cultural storm. And if Americans follow Greta Thunbergs example and avoid international plane travel, our visitor industry should thrive. Forget Rome, Paris and Bangkok come to COS!

Cultural shift or not, its difficult to believe that a country headed by a luxury-loving billionaire from Queens would ever forsake the high life.

Yet as tastes change, so do the prices of the baubles once prized by wealthy American strivers. Less-than-pristine collector cars havent drawn much interest at recent auctions, while second-tier Midwestern regionalist art from the 1930s has cratered.

And unlike the FIRE folks, I didnt make good investment decisions. I sold my 1969 428 SCJ Mercury Cyclone for a few thousand bucks before the prices of rare muscle cars exploded and am still holding on to my Midwestern regionalists, although theyre worth a lot less than I paid 30 years ago. Meanwhile, Im trying get rid of the junk. Anybody want some old newspapers?

But first I have to reread them all

Read the original here:

Hazlehurst: What do we do with all this stuff? - Colorado Springs Business Journal

Giving up your job to look after a family member or friend may not be something youve given much thought to, but two in three UK adults can expect to become an unpaid carer during their lifetime, according to Carers UK.

About 600 people a day quit work to look after for someone who is older, disabled or seriously ill, and the emotional and financial impact on these individuals can be huge.

While research suggests unpaid carers save the UK economy about 132bn a year, the main carers benefit, carers allowance, is just 66.15 a week if you care for someone for at least 35 hours a week.

Four carers tell us how they make ends meet.

Mary Adeson, 33, is an auditor and lives in London. She has helped care for her mother, Caroline, 57, who has schizophrenia, with her two sisters since she was a teenager

From a young age, my twin sister, Hannah, and my sister Heide, 27, and I have looked after my mum. Shed often feel really depressed. We didnt realise she had a mental health disorder until she was repeatedly sectioned after a number of incidents over the years. We didnt want to put additional pressure on her, so we learned to manage ourselves. We became very self-sufficient.

By the time I was in year 11, I had part-time jobs. Hannah and I had to go to work as mum wasnt able to. We couldnt depend on her to pay the bills, and letters would pile up. Hannah and I just split the costs. When I was at college I worked evenings and weekends and then over the holidays. I always worked while studying.

Now I work full-time as an auditor and still live at home with my mum and Heide. We both handle all the finances. While my mum receives disability allowance, we dont claim for carers allowance. With my salary, I dont feel like its necessary.

Do I feel like Ive missed out on any luxuries? For a long time now Ive always just worked out what my budget is. I know how much Ive got and what my expenses are, so nothing comes as a surprise. I felt more of an impact when I was working during school, college and university. It was difficult paying for accommodation as well as dealing with my financial responsibilities at home. But I just had to find a way to make it work.

I do have to watch my spending, and Im quite mindful about the future. I worry about what will happen if mum gets worse and we need to pay for her to go into a home. Im always thinking about how to make my money work harder: I invest in stocks and shares and art, and I have a pension. I dont have the luxury not to think about it.

John Stefanyszyn, 64, lives in Sheffield and looks after his wife, Joanna, 46, and his niece, Lauren, 20, who both have ME

My wife has had ME since she was 14, but in the past year shes also suffered from pudendal neuralgia. Shes in constant pain and has to spend a lot of time in bed. While a nerve-block injection last June improved her condition slightly, the past year has been very dark.

Im between a rock and a hard place trying to survive. I stopped working as an NVQ enroller about three years ago to care for my wife. I receive a carers allowance of just 66.15 a week. Fortunately, I receive a private pension of 400 a month from my 16 years working in the civil service and as an Investors in People manager. Without that, Id be destitute.

My wife receives employment support and personal independence payment (Pip) of about 700-800 a month. But with outgoings such as mortgage, insurance, car and groceries, we struggle every month. We have to sit down and look at what goes in and out.

A year ago, I thought about redecorating downstairs, but now were struggling to get that done because of the cost. Fortunately the Sheffield Carers Trust managed to sort out a holiday for us to a B&B in Scarborough in October. But otherwise theres no way you can pay for holidays and sustain your life. Without my pension wed be absolutely screwed I dont know how we could afford anything. I try to stay on top of things but its difficult. For the past three years Ive also looked after my niece. Shes in her own flat, and carers go to visit, but I look after her advocacy and fight for her rights.

I spend half my time worrying about money and the other half battling for basics and being an advocate. Its a constant fight for resources across the board, and it takes time, energy and capability. Sometimes its easier to just give up and let injustice walk over you.

I do worry for the future. If anything happens to me, who will look after my wife and niece? You do go through some bad moods, thinking you are better off dead. You dont choose this life. Its not fun, its just basic survival.

Helen, 48, lives in Salisbury and cares for her daughter, Maja, 21, who has Kleefstra syndrome, a rare genetic disorder, and has specialist learning and physical support needs

Maja was born with Kleefstra syndrome, which means she has floppy joints and isnt so stable. She didnt start walking or talking until she was eight. She functions like a four- to seven-year-old, depending on the activity. She can write and has a good vocabulary. Shes really sociable but shes prone to low moods and mental health problems.

Maja attends a specialist college on Monday to Friday, 9am to 3pm. We live on benefits as its difficult to find a job because of the holidays. Last summer Maja had eight weeks off, then theres Christmas holidays and so on. An employer that flexible just doesnt exist. I always try to keep an eye out for a job. I receive income support of 87.60 every two weeks and a carers allowance of 66.15 every week. Maja receives personal independence payment of 350.60 and 588 in universal credit every month.

Waiting five weeks for her universal credit to come through left me in debt. Ive a 500 overdraft now. I dont seem to be able to get out of it. Im recently married but my husband doesnt live with me, so Im financially in control. I pay the bills, but he does help out because he feels like he should but, at the same time, he has property elsewhere and has bills to pay. Its difficult to get a break. I receive income for a carer to come in for three hours a week.

When Maja was 18, I received 43 nights of care per year, and she would go to a respite centre in Salisbury, which she loved. This was taken away in July. Maja misses it terribly. I miss it too. An overnight break is very important for us both.

Im grateful that I live in the UK and that we have a benefits system at all. However, the problem is that if youre a carer like me, my daughters condition isnt going to change. If it does, it will only get worse. What I mean is, there is no cure for my daughter this is a permanent situation. So we live on benefits.

I put money aside for Majas pocket money and her needs, clubs, activities and special holidays, but we cant afford to replace old clothes, shoes or broken furniture, electrical appliances and to generally maintain and upkeep our place. My choice has always been: do I give my daughter a myriad of opportunities and experiences, or use the money to maintain my home and garden better?

Syreeta Challinger, 38, founder of a lifestyle store, lives in Frome, Somerset, and cares for her husband Rob, 42, who is paralysed on his right side and has aphasia and epilepsy after having a brain haemorrhage and stroke in 2014

Rob and I had been living and working in Hong Kong for several years when he suffered a brain haemorrhage and stroke while on holiday in Sydney. It resulted in Rob losing his speech and requiring 24-hour care. As we hadnt been recently residing in the UK, we were unable to claim any benefits for the first two years, and we moved in with Robs parents in Lincoln.

I managed to keep my job and work remotely, but it meant commuting to Hong Kong every three to four weeks. Commuting to another continent is not good for anyone, never mind with what we were going through. I ended up quitting to become a full-time carer.

Over the years Ive applied for so many jobs, but once you tell employers your circumstances and that you potentially require flexible working, youre not such a suitable candidate any more. I did work part-time in a local shop for 8 an hour, but having worked in high-end roles before meant I was probably too can-do for the job.

At the moment, Rob receives Pip of 350 a month, and I receive carers allowance of 66 a week. What are you supposed to buy with 66 a week? It hardly covers a food shop. In the summer we moved from Lincoln to Frome to be closer to friends. Were renting a bungalow, which is doable through financial support from family members and savings from the good jobs we had in Hong Kong. However, were literally on zero now.

The focus this year has been figuring out how to get back to supporting the three of us our son, Grayson, was born in the summer. Rob doesnt receive employment and support allowance any more, as Im attempting to work. A job coach at the Department for Work and Pensions advised that I would be financially better off if I didnt work, but Im just 38 I dont want to be staring at four walls every day.

Im trying to figure out a solution that works around Robs needs. Im excited but also extremely scared about how were going to make this work, but I have hope now Rob doesnt need 24/7 care, his speech is coming back and he communicates through drawings.

In 2016 I launched Moments of Sense and Style, a lifestyle store selling products that align with our story and offering a message of courage, strength and hope. I spend 10 hours a week on it but Id love to market it more. For the future, I want to get on top of the bills and then have a little fun again and maybe take a holiday. Things have been really stripped back for us since the incident.

The proposed closure of UK borders to low-skilled workers after Brexit has caused carers to be dragged into the discussion.

The home secretary, Priti Patel, has been heavily criticised in some quarters for suggesting employers could plug the gap with some of the 8 million Britons between the ages of 16 and 64 classed as economically inactive a cohort that includes those with caring responsibilities, long-term sick and retired people, and students.

Helen Walker, the chief executive of Carers UK, says caring for a loved one round the clock can mean a real struggle to make ends meet. Many carers have to manage on a reduced income, and the majority spend that limited income or savings on the cost of care, specialist equipment or products reducing their financial resilience.

Our research shows that financial hardship worsens for carers the longer they are caring, with double the proportion of carers in debt after 15 years of caring, compared with those in their first year. More than half of unpaid carers save nothing for retirement. This has huge implications for carers and the economy in the long term, with many left drained of money in later life and in need of support from the state and our social care system which in its current form is already creaking.

Carers UK wants the government to increase the carers allowance and allow unpaid carers to earn more and keep their benefit. We must see unpaid carers put at the heart of a reformed and sustainable adult social care system, says Walker.

Read more here:

Its just basic survival: the financial toll of being a carer - The Guardian