- Keep the record where your money goes to. At least for a few years . It will help you to understand your needs and the split between your essentials and the rest.
My original goal to achieve financial independence was $60,000 a year. Percentage wise it goes like this (simplified):
- You can have accumulate your wealth towards one item at the time using the projected interest rate. For my financial independence plan it is 3%.
So to have the items for life I need:
- Some of the items like "Joy" might look inflated, but they represent our desire to travel and a safety net, as I think some of the items are underestimated (such as medical).
- Essentials are big ticket items, but you do need them. Lets say if I am on target this year, I should have about $200,000 in my nest egg . I can strike out either car or bills. I do not need to worry about them for the rest of my life.
- The other incentive might be of your choice to reach the ultimate end goal, for example to treat yourself with new car or year of travel through the beautiful national parks..
This is quite simple, but helps me to make the achievement more real, rather than something I need to do for the next XX years.