How to Avoid Financial Crisis and Find Stability: Part 3 – Independence in Any Circumstance

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piggy bank and cash financial stability

Part 3 – Independence in any circumstance

I’ve previously posted my reasons for choosing financial freedom.

Well, in honor of National Financial Literacy Month, I thought I would elaborate on one of my most popular posts.


Disclaimer: I do not work in finance. I do not have a degree in finance. I never even took a class in finance. My advice should not be considered a financial service or a substitute for that of a financial advisor. This is simply the method that has worked for me based on my own personal experience.


In 8 Reasons to Choose Financial Independence, I discussed the reasons I fight for financial freedom.

Why I work every day to get out of debt, why I built an 8-month emergency fund and why I contribute monthly to my retirement account.

Today is part 3 of this 4 part series.


Over the past few weeks, I’ve been thinking a lot about what it means to handle my finances as a Christian.

The Christian financial situation is an interesting one. I’ll make a future blog post that goes more in-depth on the issue, but I would like to say I honestly believe the Lord never meant for us to live in debt.

He never intended for us to be dependent on anyone but Himself.

The limits and the anxiety that come from living in financial bondage were not intended by the Lord, and this is another reason I’m willing to make the sacrifices necessary to become financially independent.


But for now, onto today’s topic.


How to avoid financial crisis and find stability:

Part 3 – Independence regardless of the circumstances

1. Reach financial maturity

In the book The Millionaire Next Door, authors Thomas Stanley and William Danko explain a term called “Economic Outpatient Care,” or EOC.

Essentially, EOC means an adult (20-somethings and older) is living a lifestyle above their income level because of their parents’ help. Housing, children’s private school tuition, even country club memberships are funded by the parents. It’s one thing to be in your early twenties existing with the help of your parents. It’s another matter entirely to be a 30-something, or worse, a 40 or 50-something, unable to maintain your standard of living without someone else supplementing your income.

The problem with financial help is that it breeds a mindset of dependency.

It locks the receiver in financial immaturity.

If you cannot afford a house, car, outfit or membership without the help of someone else, you can’t afford it. Period.

This isn’t to pass judgment on anyone who currently accepts financial gifts from their parents. This isn’t to say an individual can’t be successful while also receiving a financial contribution from a third party. It’s simply to say that, for me personally, I can’t stand the idea of taking financial assistance from my parents now, in my early twenties. I can’t even imagine being dependent on my parents’ help once I have a family of my own.

Being financially free now gives me confidence that, regardless of my future circumstances, I will never have to rely on my parents again. And honestly, that feels pretty damn good.


2. Don’t let one emergency control your life

In my previous post, I quoted Suze Orman when she said, “A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.”

As I learned in November, life is full of surprises.

It’s often hard to predict job loss. It’s almost impossible to predict every circumstance you could face in the future.

However, it is possible to be prepared.

With an 8-month emergency fund, there are very few situations that could pop up and put me back into debt. With a fully funded Roth IRA, I have even more cushion in case something unexpected does happen.

In my mind, the worst circumstance would be to have built a financial cushion – say a month or two of security – and then have that cushion not be enough. To lose my job and not find something for three months (or, as in my case, four).

[Tweet “An 8-month emergency fund is an added level of protection against unforeseen circumstances.”]


This session’s homework: Take back one bill from your parents.

piggy bank and spilt coins representing financial gifts

If your parents are currently paying any of your bills, pay them for one month. I’m including health insurance in this homework for those 20-somethings still covered by your mom or dad.

Find out what the cost of that coverage (or phone bill, gas bill, rent) is for one month. Spend the next 30 days saving up that amount of money, and then pay the bill yourself next month.

If saving the money was easy and you could see yourself paying this bill in the future, I recommend taking this burden from your parents. If you can’t reasonably pay the bill every month, set this as a goal for the future.

However, this month, your homework is to pay this bill. This one bill. One step towards breaking the financial ties to your parents.

One step towards financial independence.


Photo Credit: 401(k) 2012

Did you do your homework this week? What about last week? Did you feel a little more mature paying that bill yourself? Leave a comment letting me know how it went!

And don’t forget to subscribe!


Other posts in the series:
8 Reasons to Choose Financial Independence
8 Ways to Avoid Financial Crisis and Find Stability
Part 1 – Save Your Money and Spend Less
Part 2 – Get Out of Debt and Safely Spend
Part 3 – Independence in Any Circumstance
Part 4 – Focus on Giving, Not Earning

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