Five steps to achieve financial independence
Financial independence is a beautiful thing. But while many of us desire financial independence, fewer of us know which steps to take to actually achieve it. That’s why we’re here—we want to give you the industry tips and tricks you may not know to help you work toward your dream. Read on to learn about five steps you can follow to gain the financial independence you’ve always wanted.
1. Take stock of your current situation
Every good plan has a starting point—and this one is no exception. Take some time to review your current financial portfolio. How much debt do you have? Which bills are you paying on a monthly basis?
Knowing where you are is a key step in getting where you’re going, so give a thorough and honest look at your finances. You can even speak with a financial advisor to get some professional insight into your monetary needs. And while you’re talking to them, ask them to help you set a goal: what does financial freedom look like for you?
2. Start those savings
After you have reviewed the state of your finances, you can begin to plan. To be financially independent, you’re going to need a way to save money. Start by looking at those expenses you don’t really need—there may be expenses you didn’t even realize you had.
Rework your budget to spend less and save more as much as possible and commit to keeping those savings set aside in your question for financial independence. Remember, you may not be able to save what you want to in the beginning. But as you work to decrease your debt and increase your savings, the path to financial independence will become much easier to travel. You’ll also need somewhere to store those savings. Find a savings account that works best for you, so you can keep your hard-earned money safe.
3. Talk to the pros
We already mentioned reviewing your finances with a professional, but it’s a good idea to ask them to help you with the rest of your plan, too. An accountant or tax professional can give you invaluable insight on ways you can be saving even more money, whether it’s through the right type of bank account or through diversifying your portfolio. Having someone guide you through the process also means less stress for you. Ask some friends and family who they trust to take care of their own finances and get to work.
4. Work out your debt
Life happens. Sometimes we deal with unexpected medical issues or find ourselves paying for braces this year instead of next year. But you have the opportunity to rid yourself of that debt as part of your journey to financial freedom. Start with the smallest debts first—as you pay those off, you’ll find more and more room in the budget for some of your larger debts. It’s also a good idea to reach out to your debtors. You might be able to work out a payment plan that works better with your budget, creating the ultimate win-win situation.
5. Prepare to handle your money
When you achieve financial freedom, it may seem like the hard work is over. But just like you don’t stop going to the gym when you get the muscles you want, you don’t stop managing your finances when you achieve the wealth you want.
In order to maintain that wealth, you will need to be diligent about spending your money the right way. This is another chance to talk to a financial expert who can give you some direction on how to keep your wealth from slipping away. You made it this far—don’t stop before you reach home plate!
Gaining financial independence may seem impossible—but it can be done! Figure out your ultimate goal and then take a planned approach to achieve it. This type of independence may not happen overnight, but it can still happen for you. Find some expert help and start working on your plan to financial freedom today.