Becoming financially independent is crucial to finding the way to wealth and a more secure future. It’s a future where you’re not reliant on anyone else, self-sustained, and you’re not tied down by any hefty financial ties that keep you in one place for too long. It’s the ultimate way to assure your freedom without the risk of having no financial security to fall back on.
Here, we’re going to look at the different ways to make yourself financially independent and to enjoy the freedom that comes with it.
Get smart about your money
You cannot become financially independent if you’re not smart about your finances. It’s as simple as that. You have to know how much you have, how much you will have, how much you can spend, and how much you can save. To that end, while you should be keeping an eye on all your accounts as closely as possible, the right apps can make it all a lot easier. For instance, budgeting apps like http://wally.me/ make it a lot easier to track your expenses and to see how much you should be setting aside for your financial goals every month. If you lose track of your finances, it’s easier to slip back into relying on creditors and other people to make up for the mistakes you might make. The more you monitor something, the more likely you are to avoid making those mistakes.
Build your safety nets
People how aren’t financially independent will often use the safety nets that society provides for them. They’ll take out loans that end up costing them more than the mistake would have, they turn to friends, they rely on the Bank of Mom and Dad. It’s not a good way to live and it will crush your confidence if you rely on them for too long. Build your own safety nets. Take the budget that the last tip helped you build and set a savings goal of an emergency fund that’s strong enough to sustain you for three to six months of no employment.
Find the best insurance rates for your car, your possessions, and your ability to make income. If you have your own safety nets, then you don’t have to rely on the others around you as much.
Downsize your obligations
We’re all taught by society that assets are the measure of success. A better car, a bigger house, a new pool, etc. etc. The truth is that many of these will hold us down for a very long time. If you have a family you need to support, then a big house might be necessary. If you’re an independent, a smaller one can still be a good investment, especially with services like https://sellhousefast.com making it easier to move through the real estate market.
But don’t tie yourself down for decades by making obligations that are bigger than you need just because society tells you that’s what your goal should be. Having fewer ties makes it easier to move for work, and to put money in more lucrative places.
Look for new savings opportunities
Similarly, the traditional route for saving money is the bank accounts that most of us get when we’re teenagers and keep until we’re retired. It pays to look for other savings methods, however.
For instance, many millennials started shifting long-terms savings into cryptocurrencies, which have started to reveal just how lucrative they can become, compared to stale insurance rates offered by most banks. Credit unions are a great option for avoiding many of the unnecessary fees and costs associated with banks, as well.
Stay out of debt
If there is one commonly known tip worth following, however, it’s that you should stay out of debt as best as possible.
Making use of your credit can be a good thing for building a credit history that allows you to get the best deal in the future, and sites like cryptocurrencies can help you find those that best fit your means and your needs.
However, debts are just another obligation and, unlike property and assets, they’re an obligation that always, without fail, result in a net loss. Financially independent people have to avoid lossy obligations no matter what, so ensure debt is always your last resort. If it means having to cut costs, downsize your home, or work extra hours for some time, then do it.
Diversify your income
Working longer isn’t the only way to make more money, and that’s something you’re going to have to learn as time goes on.
Diversifying your income is the single best way to not only meet long-term savings goals and to avoid debt. It’s also a way of ensuring that you’re not so reliant on any one job that leaving it or losing it is going to become a crisis. Alongside the protections named above, having a side hustle, looking for investment opportunities, and even starting a small business can guarantee that you always have an income, even if it’s solely passive.
Always keep the goal in sight
In the long-term, the goals of the financially independent individual are much as the same as any other. To make sure that you can retire, have something to pass on to your family, and to not have anxiety about your social future. Living as a financial independent simply means that the road to get there is one with more freedom and more opportunity. So, make sure you’re tracking your long-term goals and putting enough away every month and every year so that you can meet them.
For instance, sites like https://www.kiplinger.com offer retirement calculators to help you figure out how much you should be putting away, based on income and age, to ensure a good retirement.
When you’re financially independent, you can stop living in fear. If you need to move, it’s much easier. If you want to switch careers, you have both the security and the income to do so. But it also doesn’t ignore the obvious goals of savings, investments, and retirement that you need to sustain your future.