Are you FIREd up with good financial habits?

Finances can be confidence building and a helpful tool, or it can be a source of misery and stress.

Money is everywhere in our society. Almost every choice we make has a financial impact in one way or another.

Basically, finances are important, very important.

At school we learn about lots of interesting things across various subjects. Money doesn’t get much of a mention even though it’s almost as important to living in this world as being able to understand language.

In some ways, we define how important we are to society by how much money we make a year, by how much money people have accumulated. Many people idolise those who can display their importance to society with expensive cars, big houses and fancy accessories.

Of course, some of those people fund their life with excessive debt and many live a financially unsustainable life. But that doesn’t matter, right?

Where are you supposed to learn good habits when school mostly ignores it and many places in life don’t think it’s ‘cool’?

The financial services Royal Commission unearthed many wrongdoings by Australia’s largest financial advice institutions. Turns out they weren’t on our side.

But there are good sources of learning out there. The Australian Finance Podcast is a great place to start.

Scott Pape’s books, including The Barefoot Investor for Families, is another good way to learn and build habits. Rask’s financial education is a wonderful tool, with many parts of it completely free.

Another favourite blog of mine is Morgan Housel’s at the Collaborative Fund.

The thing is, the only person who truly cares about your financial success and security is you. And you don’t need to make things complicated to do well.

Succeeding with money doesn’t have to need a statistical analysis degree when it comes down to it. As Morgan Housel said: “You spend less money than you make, save the difference, you buy a diverse portfolio of great companies and you be patient.”

There are plenty of people out there trying to live their lives in a very financially successful way that could be inspiring.

For example in the FIRE podcast (Financial Independence, Retire Early), Owen mentioned a blog called Dividends Down Under which is run by a couple in their 20s who want to become financially independent by 40, by investing in shares for the long term and living off the dividend income.

They aren’t alone, there are plenty of Aussies on the path to FIRE with communities all over the internet.

Why does financial independence matter?

The sooner we can take control of our financial lives the sooner we can fully dictate how we want our lives to go. Freedom is empowering.

Sadly, there are far too many people who wouldn’t be able to last long financially at all without their job. That’s why many financial gurus suggest having at least three months of living expenses.

If you’re under a ton of debt, or if you’re living month to month, then you’ll feel like you have to hang onto your job at all costs even if the pay is poor, even if your boss is terrible, even if you have no growth prospects there.

Having good financial knowledge and a strong financial position will give you the confidence to take on the world. Having strong foundations with a good emergency fund can give you that freedom and allow you to take on more risk to invest more money into shares, property or whatever else.

Surround yourself with good information, with good inspiration, with people who want you to achieve your financial goals. Build good financial habits that are easy to follow and hard to break.

Financial independence can be achieved by most Aussies if they put their minds to it (and their bank accounts).

You can do it, we all can.

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