Becoming and staying financially independent can be a difficult task, particularly when you’re more than happy to spend on your credit card, or live every month pay-check by pay-check without having much room for any savings. You could have a lot of money on your credit card or be reliant on pay day loans but consistently buying things on top of these can leave you in serious financial difficulties. Saving for the future is becoming more important than ever, with the future of state pensions becoming increasingly uncertain and the biggest piece of advice is ‘save early and safe often’. Saving to be financially independent becomes easier if you fall into the habit of saving. Here we have advice on how to stay financially independent.
- Earning & Saving Extra Income
When you first start out in a job, you may often find that your expenses often matches your income, which make it hard to begin saving. Whether it’s buying lunch every day or getting the bus in instead of walking just so you can have that extra twenty minutes in bed it all adds up. To achieve financial independence and to stay independent, it is important to cut out some of the basic expenditures in order to save your money. In addition to this, if you’re looking to establish a financial base away from your every day job, you might want to consider taking on an extra job. This will help you to kick start your savings, eventually getting you into a habit of saving monthly. Developing good savings and expense-reducing behaviour from a young age is really important. This doesn’t necessarily mean that you have to take on an extra job however. You can also earn money through building an investment portfolio, whether it’s in stocks or in residential developments. Developing multiple streams of income is one of the only and most important ways to truly become and stay financially independent. You can also learn how to be financially independent by taking up financial literacy courses (you can read the reviews of such courses at https://devinschumacher.com/reviews/). That way you can have multiple ideas for side income. This allows you to fall back on something if one of the streams of income dries up.The most important part though is ensuring that you are earning more than you spend each year. - Tracking Expenses
Financial discipline is the epitome of financial independence. Pay attention to the way you spend money, and you may be able to make slight changes that can seriously influence your financial position, allowing you to put more money away into savings and to be financially independent. The best thing to do is to ensure that you are not spending more money than you are making. Whether that means getting your hair or nails done only once a month rather than twice, or making pack lunches instead of going out for lunch every day, you can save hundreds of pounds a month. - Fall Into Saving Habits
Falling into saving habits is by far the easiest way to remain financially independent. If you start by saving 10% of your pay slip every month, which might sound like nothing, you will eventually rack up a lot of money. You can then gradually increase that percentage if you want to, and you will slowly learn that you do not actually need to spend all of the money you earn every month. You could also get more info about different savings accounts and the benefits they have. Afterall, your savings can help you live a comfortable retirement or even help out with unexpected bills so making the most out of your savings account can be really beneficial. - Handle Debt Responsibly
Understanding that debt does not necessarily prevent you from being financially independent is important. At some point in your life you will have some form of debt, whether it’s a credit card, a pay day loan or a mortgage. Paying off debt steadily but within your ability to do so helps you to reach financial stability. When it comes to paying off debt, it is important to put the high interest debt at the top of your priorities. Things like credit cards and pay day loans tend to have a high interest (unless you’re lucky enough to get a 0% interest) and so need to be paid off quicker than others. Things like your mortgage or student loans are meant to have gradual payments, and so are not high priorities. As long as you can afford to pay your loans, and still have some money at the end of the month then you will be financially stable. One rule to follow is to only take on debt for investments not for lifestyle such as holidays and clothes. Continually increasing credit card debts is simply irresponsible. - Don’t Trust Anyone But Yourself With Your Money
This is key to staying financially independent and if you are looking to invest or are simply looking for advice, it is always good to remember that the money that people are giving you advice on isn’t there’s, it’s yours. All markets are prone to rising and falling so if anyone tries to assure you that they can predict the future shouldn’t be believed. Also, no matter how good a track record someone has in investing, that doesn’t mean that they can’t suddenly begin to lose money. You need to make your own informed decisions when it comes to your money, particularly when it comes to investing, in order to stay financially independent. When you’re making financial projections for yourself in the future you should always create three scenarios (everything going to plan, everything being mediocre, and everything falling through) should allow you to be able to survive financially.
