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Personal Development

Financial Independence When You Are Poor

When you are living in the trenches of paycheck to paycheck, financial independence can feel like an impossible goal.  Every time I read an article about how many millions you need to retire, I have a panic attack.  How will we ever save that much?  I wonder.

I’m not sure if we will ever be millionaires, but even at our lowest income points (hey there, law school!), we followed these principles to help us work towards a financially secure future.


Saving is the keystone of financial independence.  If you are serious about moving beyond “just scraping by,” you have to develop the discipline and desire to save.  

Start saving from every paycheck, using an automated deposit setup so you never forget.  See how much you can shrink your budget so you can save more.  Save your emergency fund, then start saving a chunk of change to invest in the stock market, or in your own business, or in a rental property. If you really are scraping by, start a side-hustle and save every cent you earn from it. On that note, don’t just stick your precious savings in a traditional bank savings account.  Find a high-interest account so that your money will grow faster.


Grow your knowledge by learning a new skills.  This can mean higher education, but what I really mean is a continuous cycle of learning.

Learn about personal finance and how to budget.  Once you’ve mastered managing the money you have, start learning how to grow it.  Learn how business and the economy work.  Start investing and working to increase your net worth.

Maybe you want to sell hand-made luxury soap.  Even if you know how to make soap, do you know about the luxury soap market?  Do you know what it means to scale a business?  Do you know graphic design and marketing?

Any and all of this knowledge can help you start on the path to financial independence, regardless of your household income.

Work hard

If you already have a day job, finding time to start a side hustle or take a free economics course can seem impossible.  Have the dedication and grit to work in your free time and evenings, instead of checking out in front of the television.  Developing the discipline to stay focused and dedicate yourself can help you throughout your life, far beyond improving your personal finances.

Work hard at your job.  Make yourself indispensable, then ask for a raise.  Get a promotion.  Hard work will set you apart as a generation of lazy millennials dominates the workforce.

Read also: 14 Things You Can Do Today To Improve Your Finances Tomorrow

Balance your resources

Time, money, and knowledge are just some of the resources that we use to manage money.

Working toward financial independence requires that learning to weigh carefully when time or money is more valuable.

One thing I ask myself often is, “Do I have more time or money?”  When I have more time than money, I make home-made meals instead of eating out.  I sew my kids Halloween costumes, instead of buying the overpriced Walmart version.  I spend time learning how to pick a good stock and manage my investments instead of handing them over to a firm.

As I’ve started side hustling, I’ve found my time is becoming more valuable.  Eventually, there may come a point when time is more valuable to me than money.


Prepare for retirement by investing.  If you ever want to get out of the rat race, really get out of it, you need an exit strategy – namely, a retirement fund.

If your investment resources are small, try micro investing with an easy-to-use app like Robinhood.  We put a few bucks into there every month, and my husband is experimenting with day-trading as a hobby. If you have successfully saved up a bigger chunk to invest, open up a 401k or Roth IRA.  The benefits of each type of retirement account depend on your own needs, and I’m not going to recommend a financial institution because we manage our own retirement account right now.  However, this is a great opportunity for you to go learn!

Stay Motivated

Cutting down your expenses, putting money into savings instead of going out to eat… it can get exhausting.  Remember to treat yourself once in a while, but keep it reasonable!

My favorite way to stay motivated is to read about other people who are improving their finances.  Keep in mind that some of these people are a few years ahead – some of them have made their millions already.  Don’t let it get you down – let it give you hope!  They have great advice about how they got there!

Read also: Whats A Good Allowance? How to teach your children REAL money lessons

The Takeaway

Financial independence is a bit of a nebulous concept.  For me, financial independence means having a healthy retirement, a strong emergency fund, and living without wondering how you will pay the bills.  These are the steps we are following.  Some months, making that retirement contribution is painful.  But having our wealth grow (slow as it may be) brings me financial peace that we are prepared for the future.  Even if you’re poor, you can start saving and learning to change your financial outlook, too!

Frequently Asked Questions

How much money do I need to be financially independent?

Financial independence means living a life without having to worry about how your needs will be met, or rather knowing that your needs will be supplied comfortably. Contrary to popular belief, financial independence is more than just having enough money to meet all of your preferred living needs. Financial independence entails being able to overcome psychological anxieties in order to fully live free.

The typical household income in the United States is about $68,000. As a result, $68,000 is considered a respectable middle-class salary. If you didn’t have to work for your $60,000 annual salary, your life should be better, if not great. To be deemed financially independent, a family would need to invest between $1,360,000 and $2,720,000 based on a cautious 2.5 percent – 5% annual return.

It is impossible to predict how long your money will endure. There’s always the risk of a worst-case scenario wiping away a large portion of your assets. However, after you’ve hit the savings goal outlined above, you’ll be in good condition if you opt to live off your nest egg.

How can I save money on a low income fast?

Even if you have to go outside the box, it is quite feasible to save money even if you aren’t making as much as you would want. Consider making it a challenge to boost your savings using a conservative approach to budgeting that does not eliminate the enjoyable aspects of life.

Spend first, then save. Set aside, say, 20% of your earnings for savings each time you are paid before doing anything else. This way, you’ll be saving money every month and will know how much you’ll have at the end of the year. Even if you have obligations to pay, make sure you save something for yourself since crises usually arrive at the worst possible time. This is important for learning how to budget money on a limited salary since it emphasizes forward-thinking.

Budgeting may seem to restrict your spending, but it allows for more regulated spending. It keeps you from overspending. You’ll know precisely where to spend your money once you start budgeting, which will help you bridge the gap between your savings objectives and real saves. So, organize your spending and savings, allocate your money appropriately, and begin monitoring it properly.

Gas and electricity are required. You cannot survive without heating, hot water, and enough lighting in your house. There are few characteristics that may help you distinguish between energy providers, so moving from one to another is unlikely to result in a visible difference in the quality of service that you get. Not all vendors provide the same price packages or charge the same amount for the services you want. You may simply switch energy providers online, perhaps saving £100 or more over the course of a year.

How do I stop being reckless with money?

We overspend for a variety of reasons. It’s possible that we’re unaware of our genuine spending habits. Perhaps we are overestimating our income, costs, debt payments, and spending. Finally, our bank account balance falls below our expectations. Whatever the reason, if you’re ready to take charge of your money, these seven ideas will help you stay on track.

According to recent study, persons who have exhausted their willpower are more likely to spend more money and buy more products than those who have not recently used their control. According to study, less willpower might lead to decreased spending control. People who are continually confronted with difficult financial choices, such as those who are less financially secure, drain their willpower more easily.

Shopping on the spur of the moment and without thinking are frequent practises that contribute to overspending. Before you buy anything new, whether it’s clothes, a tool, or a small appliance, put it off for a day and assess your options. Do you really need the new clothing item? Can you borrow a tool from a neighbour or use one you already have?

It might be tough to make the decision to save money. Furthermore, pushing oneself to make the same decision many times every month might be impractical. You are more likely to spend your whole checking account balance. Unless you automate your saves, you risk wasting your targeted savings and ending up with insufficient funds.


I’m a writer, new mom and foodie. I love sharing what I know while making others feel beautiful. On this blog, I share my healthy lifestyle, simple meals, fitness tips and experiences.

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Kara Bout It