Tips for Financial Independence

Being financially independent is a big goal in life for many of us. For many people, it appears impossible unless you happen to make the right choices. However, for the vast majority of us, financial independence follows some smart money management. If you have always wanted to be financially independent, but you are not sure where to start, try incorporating these simple tips into your spending habits. 

Importance of budgeting & money management 

No matter how much money you have in your accounts, or what your regular wage is, you should have a budget. Many people use the 70/20/10 rule. 70% goes to pay for housing and food, 20% goes directly into savings, and 10% is as an entertainment budget. It is a good spending culture to instinct in you to save. Starting a savings plan early in life is one way to ensure that you have sufficient funds when you can no longer work. Knowing how much money you have and where it is going is known as money management. Only by seeing where your money is regularly going, be it on a subscription to a streaming service or a new outfit every week is necessary. You must be sure to include these expenditures in your budget. Realizing that because you do something often does not make it a necessity, it is the first step to managing your money. 

Money Management Tips 

Increase your savings habit by using these easy tips to help you save big: 

  • Invest

You may think you have a long time before you can save as much as you need. Or you maybe you assume the interest rate on your account will be enough. However, due to inflation, that little sum is going to be worthless and less each year. Once you have started to save money, the next step is to invest it. It will put your dollars to work for you and grow bigger before your own eyes. Also, it can quickly increase the amount you have saved into a large fund. 

  • Shop Around for Your Utilities

One of the easiest ways to see huge savings each month is to compare different rates from different utility companies and choose the one that works for you. For example, you might be able to find a plan that best fits your needs and saves you money by comparing your Eversource rates in Connecticut. The thing about utilities (power, water, etc.) is that we need them regularly, and different companies offer the same services for different rates. Do not just choose the first offer here, instead of doing a little independent homework to determine your next move. 

  • Pack a Lunch

When you start saving your money, it is quite impossible to see your small amounts accruing into…anything. Well, if it is just five dollars you are saving every day by bringing lunch to work, it can add up. Think about drinks. Many people find it more worthwhile to make coffee at home and pack it up into a travel mug than stop at their local coffee shop every morning. The same suggestion goes for water in a reusable bottle. Not only can this be a lot healthier, but you get to decide what goes into your body. Also, it is more cost-conscious with less disposable packaging, so this route is also safer for the environment.

 Easy ways to save your way to financial freedom 

To maintain a budget and see progress on your path to financial independence, you have to be committed to maintaining it. That might mean pretending your savings account does not even exist, and only using the funds from a checking account. Becoming independent is a lot scarier and requires more work than just becoming ‘self-reliant’. However, with some simple tweaks to your lifestyle, it is possible to attain.

Here is a simple way to earn your financial freedom:

  • Set a goal

  • Set a budget

  • Track your spending

  • Live below your means

  • Build an emergency fund

  • Be responsible!

  • Invest

The key to every financial freedom is to stick to your budget. Focus more on saving every bit of your income. Remember, these tips are a continuous process which can be achieved by discipline and commitment.