Financial independence gives you more than a healthy bank balance; it gives you options and the ability to shape your life on your own terms.
When we talk about financial independence, we often picture retirement: leaving the workforce, traveling more, and finally having the time to do what we want. But financial independence isn’t only about the future. It’s about the decisions you can make today.
It’s the ability to leave a job that isn’t right. To step away from a relationship that isn’t healthy. To say no to something that doesn’t align with your values, and know you’ll be okay.
Writer and speaker Paulette Perhach joined Jean Chatzky this week on the HerMoney Podcast. She has spent years thinking about this kind of freedom, and her work has sparked conversations among women of all ages about what it really means to feel financially secure.
Here’s what we can learn from her approach—and how to apply it to our own lives.
Financial Independence Starts Smaller Than You Think
Jean Chatzky: When people hear financial independence, they imagine, I think, a big number, and you’ve said that the amount is deeply personal.
Paulette Perhach: I think it’s knowing what does this cost right now? I live in New York City, and that number has another zero on it. But I also speak Spanish, and I would be comfortable spending six months in Mexico living very frugally.
For example, I saved my first 250; that’s my first two nights in a hotel, in case I need to get out of a situation. I saved a thousand, which buys me two weeks to look for a new job. What do those numbers mean for your life? If you have four children, that’s going to be a lot different than someone who’s single. If you live in an expensive city, that’s a lot different than someone who is living in a suburban or a low-cost-of-living state.
Financial Independence Looks Different as You Approach Retirement
Jean Chatzky: I want to talk specifically about retirement. You write that the highest luxury you’ve known is being taken care of by the woman you were last year, and taking care of the woman that you’ll be in the future. How does financial independence evolve as you think about and get closer to retirement?
Paulette Perhach: It definitely gets more serious, and that idea that it’s on you, and also that the elder work of taking care of other people. For me, I think about taking care of my mom and being able to be the person who provides. Not only that, I don’t need anyone to take care of me; I can also take care of others. That’s really inspiring to me.
The zeros line up when we’re talking about retirement, yet the fun and games of being young are definitely not over. I want to have a deeper level of joy in travel. I definitely want to be traveling in retirement.
Financial Independence Is Ultimately About Self-Love
Jean Chatzky: When you think about using this money, how do you recognize the scenarios where you actually do need to start thinking about bailing yourself out?
Because I think you’re right. I think we’ve all been in scenarios where we make excuses. We deal with discomfort. We deal with things that don’t feel okay, but we’ve dealt with them for so long that we just let them slide. How do you recognize when you’re at the point where you have to take some action or at least give yourself a little distance?
Paulette Perhach: I think it starts with mindset. [Financial independence allows you to be] in situations that feel very empowering, not just acceptable, but empowering. Imagine you have any choice; what would you choose? [Financial independence allows you to] give yourself more and more choices and raise your standards higher and higher.
One of the greatest joys of my life has been not just experiencing acceptable behavior at work, but truly being impressed by and admiring the people I work with. Creating an environment where this admiration is possible allows you to move up a kind of hierarchy of needs, both professionally and personally.
MORE ON HERMONEY:
- How to Build an Emergency Fund When You’re Living Paycheck to Paycheck
- Mastering Change: Maya Shankar On Life’s Unexpected Shifts
- Ask Jean: Can I write my thrift store purchases off as charitable donations?
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