‘I Became Financially Independent at Age 18’ (2024)

FAQs

Can you be financially independent at 18? ›

There's no one-size-fits-all answer to this question. Some people begin covering all their own living expenses starting from age 18. Others become financially independent in their 20s or 30s.

You need to decide how much you want to earn and how much money would be enough for you to live your life in efficient manner. After that, you need to make investments and find ways to generate passive income in the long run. This will help you in becoming financially independent.

Among the key findings: 45% of young adults say they are completely financially independent from their parents. Among those in their early 30s, that share rises to 67%, compared with 44% of those ages 25 to 29 and 16% of those ages 18 to 24.

You can only qualify as an independent student on the FAFSA if you are at least 24 years of age, married, on active duty in the U.S. Armed Forces, financially supporting dependent children, an orphan (both parents deceased), a ward of the court, or an emancipated minor.

A student age 24 or older by Dec. 31 of the award year is considered independent for federal financial aid purposes.

If your passive income (income from investments and interest on savings) meets your outgoings, you get to decide how you work, who you work with and how long you work for; you're not at the mercy of employers and employment contracts. This gives you greater negotiating power when it comes to your next role.

To prove your financial independence, you must be able to document that you have been totally self-sufficient for one full year prior to the residence determination date, supporting yourself, for example, through jobs, financial aid, commercial/institutional loans in your name only, and documentable savings from your ...

Some people may feel financially independent after accumulating enough assets to lead a modest lifestyle, while others may strive for a higher level of financial independence to afford luxuries, increased consumption, and a higher standard of living.

Is a 22 year old a kid? ›

It isn't really an adult but not really a little kid. It's a late adolescent. Young adult.

In this case, financial independence means having enough in your savings and investment accounts — around 25 times your annual expenses — so you can retire early. FIRE devotees are dedicated to saving and investing as much of their paycheck as possible in order to retire long before the traditional retirement age.

Many people don't start investing until they're in their 20s or 30s. But getting a head start comes with distinct advantages. Investing early can help you develop financial literacy skills, learn about risk management and build a strong foundation for future financial success.

Someone between the ages of 18 and 25 should have 0.1 times their current salary saved for retirement. Someone between the ages of 26 and 30 should have 0.5 times their current salary saved for retirement. Someone between the ages of 31 and 35 should have 1.1 times their current salary saved for retirement.

50/30/20 rule — This rule budgets your money based on the following percentages: 50% for necessary expenses, 30% for other expenses and 20% for savings. You can alter these percentages to fit your needs, and if you don't have many expenses, you may want to contribute more toward savings.