Being financially independent suggests that you are in control of your money rather than the money controlling you. It may sound strange but your income does not always determine how independent you are financially, it is a lot about your choices, priorities and attitude. People who are struggling to manage their monetary situation may consider financial independence and success as a far away dream, but these five tips will help your dream become a reality very soon: Taking yourself towards a sound financial equilibrium is somewhat similar to building a thriving business. This can be a tedious endeavor that needs skill, planning, persistence and of course some luck. Bearing in mind the long road you have to travel, there is all the reason to start with it today. If you can implement the lifestyle and mindset summarized here you will surely be on your way to building a secure and snug financial future.
1. Plan your Finances
It is important to identify your goals to achieve them and a financial plan is one that has to be uniquely yours. It has to be a financial strategy that has been carved to carry you from where you stand today to the place you want to reach in the future.
Financial security does not happen by accident and it will not happen overnight. As businesses have quarterly goals, revenue targets and business plans, it is best to approach life with a long-term financial strategy comprising of a chain of interim actions and targets. You must have a customized plan.
2. Invest in Your Self
For businesses to grow they have to invest in themselves and this same formula applies to us also. Prior to starting a career, one needs to invest in education to find better opportunities and increase potential income during our working years. If you are not able to go for higher education due to some personal reasons or adverse circumstances, you can think of starting a business. It is essential to remember that investing in your business or even yourself is not a one-time venture. To keep up with the modern day competition and situations, it is crucial to keep developing to take yourself to the level above! Whatever your profession, you will be able to generate better income by adding new skills and the process of acquiring new skills is an investment that will have to go on through your lifetime. Enlarge your interests and always be prepared for new opportunities. In fact it is also possible to continue developing your skill sets even after you retirement. Many of us find a second career very fulfilling and it can also build an income stream to make your later years bright.
3. Stay Out of Debt
Managing debt is a critical exercise for individuals as well as successful businesses. As far as possible don’t rack up debt. It is true that education and house cost is mostly beyond most of our reach to pay in cash. Stick to the fundamental of not purchasing if you can’t pay by cash! It is best to clear the education loan before you buy your home.
While managing expenses at home do not stretch your budget. Just buy what you can afford comfortably and pay off the debt as soon as you can. Paying high interest on consumer goods is pure waste of money and erodes your financial foundation.
4. Save and Invest Your Money Regularly
Make a savings plan. This is like paying yourself first! In fact if you leave it for the last after meeting all other financial requirements, there are good chances that you will never have a decent saving account or investments. It is best to decide and set aside at least 5 to 10% of your income as saving. This can be done easily by having cash automatically deducted from your pay check account and saved into a different account. It is a good idea to save money on a monthly basis. Contribute to a retirement plan in your workplace or otherwise. After a savings account and retirement plan, if you still have some money make some other investments!
5. Be Patient
We all want to become rich fast but patience is an essential attribute for long term financial independence and success. Setbacks can happen even after making the best financial plans. You may lose job or investments or some tragedy strikes your family, don’t let that distract or discourage you from the long term saving plan you have made. The journey is surely long and the road may be tricky but you can do it with a positive attitude and patience!
Shruti Kumar is a very successful and proactive freelancer contributing on knoji.com, blog writer for Tajo website that provides Finance Solutions in Europe. Shruti can write on different topics including Finance, Health and Travel. She is very versatile and has numerous years of writing experience with an MBA in International Business as well as a degree in arts, fine arts and diploma in Multimedia applications.