[Today we have a guest post from Tom, over at FIred Up Millennial! He blogs about his relentless pursuit of Financial Independence so he can Retire Early. He’s new to the PF family, and we thank him for taking time to become one of our Honored GuestsYou can stay updated with his latest articles and random thoughts by following him on Twitter.]

My Journey

One of the primary goals in my life is to achieve what is known as FIRE — Financial Independence and Retiring Early. This goal may seem impossible to many, particularly those struggling with debt or relatively low incomes. While it can be difficult to achieve, with planning and careful strategizing, it is possible, particularly if you make it a priority in your life.

Following the Financial Kingdom Roadmap has really helped me with my goal of becoming financially independent by the age of 35. As a 20-something millennial, it isn’t always easy to maintain financial discipline, especially in the era where nearly everything is available in just a few clicks or taps.

However, by using the Financial Kingdom Roadmap, I have been able to work towards the goal of financial independence because it gives simple, concrete steps that anyone can take to build a more secure financial future.

I am currently over halfway through the ten (of 12) primary steps of building a financial kingdom, and I am working on the remaining relentlessly. Read on to learn more about how I am achieving financial independence one step at a time.

From Chris — Although achieving FIRE is tough goal for most, we commend you for working towards it!

Step One: Consistent Income

The key to building a financial kingdom is to have a consistent income and to do so, you must have a marketable skill. For me, I work as an engineer at an energy company, giving me a steady full-time income.

I worked hard in college to excel in my classes so that I was marketable as an engineer, and have committed to being an exemplary employee in all aspects. I am always on time, I work hard, and I communicate openly with my employers. Doing this helps to ensure that my primary source of income — my work as an engineer — remains in place.

However, because my goal is not to simply get by, but to achieve financial independence, I am also working beyond my 40-hour workweek. I have picked up several side hustles based on my skills. This extra income can be put towards various expenses, or even put into savings so that I can continue to build my wealth as I work my way through the steps of the Financial Kingdom Roadmap.

Step Two: Consistently Tracking My Budget

The next step that I tackled was to make sure that I knew exactly how much money I had coming in, and where my money was going each month. By closely tracking my money, I could spot places where I was perhaps spending too much, such as on picking up take-out or on my electric bill, and then make adjustments to my budget accordingly.

There are many different ways to budget, but I use a spreadsheet and the Mint app, which make it easy to sync my spending across my credit and debit cards, checkbook, and cash spending.

By tracking my spending, I can make changes to meet my goals. For example, if I am striving to bump up my savings, I can slash spending in a certain area of my budget — such as by cutting cable — and hit that goal by putting the extra money towards saving.

It is only through careful budgeting that I am able to make these types of adjustments.

From Chris — Cable cutting has really helped save money for me over the last two years, it’s always nice to have friends or family who will let you watch any big games if needed lol!

Step Three: Committed to Becoming Financially Stable and Holding Myself Accountable

One of the most challenging parts of any financial plan is truly committing to it. Far too often, people veer off track when something more exciting comes along, like the latest video game system or the chance to upgrade their vehicle. But achieving financial independence cannot occur if you are not truly on board with it — which means making a commitment and holding yourself accountable.

As part of the Financial Kingdom Roadmap, I wrote out my specific goals which included becoming financially independent by the age of 35. I then wrote out a letter to myself that spelled out my commitment, and posted it in a visible place so I could see it often and remind myself of why I was making these sacrifices.

Whenever I am tempted to stray from my financial plan, I simply look at that letter, and know that I am working towards a bigger goal.

Step Four: Maxing Out My Matched Contributions to my 401(k)

The next step on the Financial Kingdom Roadmap was to put at least as much money into my company 401(k) as was matched by my employer.

My company, like many others, matched up to 4% of my salary in 401(k) contributions. That is essentially free money! Failing to contribute at least 4% was like leaving that money on the table, which is why I had to make it a priority to put at least that much into my 401(k) each year. By doing so, I was effectively doubling my investment into my retirement account.

There are also significant tax advantages to contributing to a 401(k); the money that I contribute is not taxed by the federal government. In addition to the free money I receive from my employer, the fact that I am not taxed on my contributions means that I can build even more wealth simply by saving for retirement.

Step Five: Built a Decent Emergency Fund and Continuing to Contribute to It

To continue on my roadmap, I set to work on building an emergency fund — money to have on hand in the event that something unexpected occurred. For example, if my car broke down or I broke my arm and had a big doctor’s bill to pay that wasn’t covered by insurance, I might need access to several hundred dollars, and quickly.

Over several months, I built up an emergency fund of approximately three months of living expenses. This amount will give me breathing room in the event that something unexpected happens. I will continue to build it over time so that I have up to six months of living expenses saved so that I can handle any emergency that comes my way.

Step Six: Using Three Credit Cards to Optimize Credit Utilization and Build Credit

While it may seem counterintuitive to anyone trying to achieve financial independence, I am actively using three credit cards as part of my roadmap. In fact, I use three separate credit cards in order to optimize my credit utilization and to build my credit. This method essentially allows banks to see that I have a relatively large line of credit, but that I use a fairly small percentage of it.

For example, if I have the ability to charge up to $30,000 on my credit cards but carry no balance, then I have a fantastic credit utilization rate. Of course, that is the key — I pay my balance off in full each month, and never charge more than I can pay.

Viewing credit cards as a tool in my financial arsenal helps me achieve my goals. When choosing the best credit card for you, though, be sure to look out for varying interest rates, intro bonuses, fees, and everything else that varies from card to card.

From Chris — 3 months! You are officially knighted in the Duke of Dollars castle!

Steps Seven to Ten: My Current Goals

I am continuing to work on my Financial Kingdom Roadmap so that I can achieve financial independence by the age of 35. Right now, I am drawing up a milestone map so that I can visualize what I hope to achieve by certain ages. This will give me the motivation to continue on my path to success.

I am also planning out a strategy for my health savings account, as well as investing in an alternative retirement account known as an IRA (individual retirement account) to maximize my retirement savings.

Wrapping It Up

While financial independence by the age of 35 may seem to be a steep hill to climb, it is a challenge that I am prepared to take on. Best of all, by using tools like the Financial Kingdom Roadmap, you can too! By committing to your goals and following these steps, you can achieve financial independence and live the life you want to without having to worry about money.

We want to say thank you again to Tom – we hope you keep us updated as you continue down the roadmap. 

May your sword stay sharp fellow warrior!