When money’s tight, you often make decisions in your life out of necessity. Financial independence affords you the ability to vacation, see family and friends, and pursue your passions. The good news is you can achieve financial independence by adopting a budget, establishing savings, and spending less without compromising your quality of life.
Owe Out Less Debt
It makes sense that the less you owe out then the more money you keep. Reducing debt benefits you for several reasons. First, no money comes for free. Whether you owe money for a mortgage, car loan, or on credit cards, there’s additional interest. Secondly, if you don’t owe out large sums to creditors from multiple sources, a medical emergency or an unexpected job loss is something you can get through more easily. Third, and most importantly, you get to enjoy more of your money.
If you’re currently over your head in credit card debt, owing $10,000.00 or more, applying for a consolidation loan through a company like Old Dominion Associates may prove beneficial. It will reduce the amount required to repay monthly and help raise your credit score a bit by paying off credit card balances.
Advancing Your Career
One way to pay off your debt quickly is to increase your annual earnings. You can accomplish this by taking on a part-time job as a driver for Lyft or Uber or becoming a freelance writer online from the comfort of your home. If there’s room for advancement in your current job, acquire the skills needed for the position, and then apply.
Identify Your Goals
Gaining and retaining financial independence takes time and commitment. To remain on track, it helps to list your short-term and long-term goals. For example, maybe you want to buy a home within 3 years and own your own business within 7 years. If you feel like you’re moving away from good spending habits, review the list.
Controlling Poor Spending Habits
Trying to justify purchases by telling yourself you deserve it, or that it’s just this time, will prevent you from sticking to your financial plan. Instead, if there’s something you really want, you can accept that it’s out of your price range and do without, or save up money and pay for it cash. Around the holidays is an especially vulnerable time for someone with poor spending habits. It gives them an excuse to buy things for themselves when buying for others.
Lend Money Cautiously
Money is something that people have trouble asking to borrow and even more problems repaying. Considering this, if someone needs to borrow a few thousand dollars to pay past due bills, it will take months or even a year before they are able to repay you. If you can’t go the long stretch without the money in your savings, then don’t lend it out. People will promise to pay it back quickly, however, coming up with large sums above and beyond your needs takes time.
A Rainy Day Fund
Everyone will experience good financial times and ones that require access to cash fast. Having money set aside for these times will allow you to remain afloat, virtually unaffected. An unexpected home or auto repair, or a few days lost at the office due to an illness, won’t cause stress or missed payments on bills.
When you’re young, putting away money for your retirement isn’t at the top of the to-do list. However, it should be. Years go by quickly and before you realize it, you’re now well into your forties without a dime invested in your retirement. Many employers offer entry into a 401k
As part of their initial benefits package. If you don’t have one available, no problem, you can open a 401k of your own.
Achieving financial independence will allow you to make decisions based on preference instead of monetary constraints.