Alyssa Davies amassed in 2015, when she was just 25, a debt exceeding 13,000 euros for mismanagement what he did with his money. At the time, he spent his time celebrating, shopping more each week and spending on what he wanted. Faced with this unsustainable situation, she decided to learn more about personal finance and to capture her path to a life of savings in a personal blog. Thanks to her process of obtaining financial freedom, the young American was able to cope with that credit and today she has a net worth of over 115,000 euros.
At first, his main purpose was to pay off the outstanding debt and for this he tried to do so reduce all fixed expenses which he had to pay every month. In other words, she searched for a cheaper home, changed her mobile rate, and stopped buying certain items like makeup or clothes. Also, every week she drew $ 20 into a savings account to create an emergency fund for possible accidents. Once he was able to pay off his debts, Davies planned his retirement. “When my partner and I decided to have a second child, we realized we needed to save enough money to be able to retire safely in the future,” he says in Grow.
To make it happen, they followed a movement similar to FIRE (“Financial, Independence, Retire Early”), in this case CoastFIRE, whose goal is for each person to establish an investment plan that helps them have enough income to retire. beforehand . Now Davies, 31, is saving enough to have an investment of $ 100,000 and be able to retire at the age of 35. To do this, he followed a three-step plan which is based on re-education in relation to saving and obtaining additional income.
The easiest way to retire early and stay on budget is to earn more income each month. To do this, Davies opted to obtain extra money through social media collaborations or doing freelance work for other companies. That additional income is always invested to keep generating more profits.
focus on investments
To focus on investing, he had to do it set aside other short-term projects. That’s why try not to spend money on home renovations or cheap travel. “Sometimes I don’t go to certain social plans that I could afford because I know this situation is temporary,” says the young woman. Despite the demands of this system, Davies has decided to reserve a portion of his income for less essential things, such as buying new clothes or eating out.
Re-educate to save
Ultimately, the key to success in this financial plan is to change your mindset. In the beginning, its main purpose was to create a savings fund for your children’s universityhowever, she realized that one of the best ways for her children to move forward in the future was to be totally independent financially when she retired.
So now your priority is create your savings account from which you can earn passive income once you retire. Likewise, she hasn’t stopped making smaller contributions to her children’s funds.