A simple term like “financial independence” can mean a broad range of things depending on the person. For some, financial independence might mean having enough money to travel around the world on a private jet, eating at amazing restaurants and living in an oceanside villa. For others, it may mean being able to cover all of your expenses without the help of parents or a partner. “In every case, it’s living the life you want, not a life you must live,” says Amber Miller, a fee-only certified financial planner (CFP) in Minneapolis.
According to a recent survey of Millie readers, more than one-third of respondents said that financial independence meant supporting themselves financially while also investing in their future and paying off debts such as student loans.
A majority of those who said they believe they’ve achieved financial independence did so the old-fashioned way—by “working hard.” Those who confessed they hadn’t yet achieved it cited a wide range of barriers, including not making enough money, having to care for parents or adult children and not understanding the basics of personal finance. Some worried that inflation would also hinder their goals.
In general, most Americans doubt their ability to become financially independent. According to a poll conducted by the personal finance company SoFi, 7 in 10 Americans worry they will never achieve it. But financial independence is possible, states Kevin Mahoney, a CFP and the host of Financially Well, a finance podcast for millennials. “It’s really just tied to what you want your lifestyle to look like,” he says. “Some people require a lot of money, but some don’t require much money at all.”
For advice on how to overcome common barriers to attaining financial independence, we turned to the experts. Here’s what they had to say about your concerns.
The Barrier: “I don’t make enough money in my career.”
The Solution: Erika Wasserman, the founder of Your Financial Therapist (and a certified financial therapist), notes that this is a fixed statement that hinders our ability to save. Remember that you can start small. If you’re living paycheck to paycheck, investing extra money that you don’t have might seem impossible. But there are minor steps you can take that won’t totally disrupt your life. For example, make a list of everything you spend money on over one month and see where you can save $1 or $5—maybe it’s canceling a subscription you don’t really need or eating out less.
Mahoney also recommends looking into new opportunities, like switching jobs, asking for a raise or experimenting with a side hustle (like putting your expertise to work). “It’s a little nerve-wracking, but there are things you can do to increase your wealth,” he says. In fact, a recent survey by ValuePenguin found that nearly half of Americans who switched jobs received a pay increase. “For this reason, you might want to intentionally plan on jumping employers every few years,” Mahoney says. If you want to stay with the same organization, research other positions that might pay more and talk to your boss.
The Barrier: “I don’t know how to invest.”
The Solution: The most important thing to realize, says Miller, is that if you don’t know how to invest, you’re not alone. “No one teaches us this stuff!” she says. So the first step is educating yourself. One great resource is the Savvy Ladies Helpline, which offers independent advice for women of all ages from volunteer CFPs. Mahoney also suggests reading books like I Will Teach You To Be Rich by Ramit Sethi, The Psychology of Money by Morgan Housel or The Index Card by Helaine Olen and Harold Pollack.
Another valuable option, says Miller, is talking to a CFP who works on a fee-based structure, meaning they won’t earn commissions on the financial products or transactions they recommend to you. “Find your person and ask all your questions,” Miller recommends. “The right financial planner won’t make you feel stupid, she’ll explain things in an understandable way and help you make the right decisions for your unique life and future.”
Plenty of free online resources also focus on the basics of investing. Check out these six female “finfluencers” who offer high-quality financial advice on their platforms, research different investment options and see what savings products your bank has available (like high yield savings accounts, IRAs or certificates of deposit).
The Barrier: “I like to splurge on things (social outings, vacations, etc.).”
The Solution: Just because you like to splurge doesn’t mean you can’t also save, notes Miller. “There’s room in any budget for ‘fun stuff,’” she says. The trick, she adds, is to pay your bills and your future self first—in the form of retirement accounts and investments. Then, set aside a fund for your splurges, such as vacations, concerts with friends or a really expensive and totally unnecessary party dress.
While it can be hard to motivate yourself to save small amounts for a future goal, admits Wasserman, it helps to create a visual tool, such as a thermometer or graph that you fill in every time you hit a savings goal (even if that goal is $20). “When we give ourselves these small ‘wins,’ we get a small hit of dopamine,” she says.
The Barrier: “My partner and I split everything, so we rely on each other for money.”
The Solution: Splitting expenses with a partner is actually a great way to save money and build wealth, says Miller, and it doesn’t signify you aren’t financially independent. But whether you should merge your savings and combine your bank accounts is another question you should consider carefully (check out Millie’s article “To Merge or Not to Merge” for some guidance).
Whatever you decide to do, it’s important to remember that close to 50% of marriages end in divorce, says Kaysian Gordon, a CFP and volunteer at Savvy Ladies. “Before entering into any financial agreement, you should understand what happens to your assets if the relationship doesn’t work out,” she says.
It’s also valid, and smart, to ask parents or other family members about potential inheritances. “It’s not greedy to understand what may impact your future,” says Miller.
The Barrier: “I worry that the financial advisor I am using will somehow steer me wrong.”
The Solution: Mahoney is the first to acknowledge that some people don’t trust financial advisors. But in today’s world, he adds, there are plenty of things you can do to vet someone before hiring them. “More and more advisors are active online through blogging, podcasts, YouTube videos and other forms of content,” he says. “Read or listen to what they say—and check their credentials and client reviews—to get to know them before committing to anything.”
If you already have a CFP and don’t trust them, find a new one, Miller recommends. “You should feel 100% confident that whoever you’re working with is helping you towards your goals.”
Millie content is licensed from Meredith Corporation, publisher of Millie, Real Simple, InStyle and more.
Brienne Walsh is a writer based in Savannah, Georgia. She contributes to Forbes, Rangefinder and MarketWatch, among other publications.