How to be financially independent

Finance

How to be financially independent

Financial independence is one specific thing that every single person wants to achieve in their life. Being financially independent means doing anything you want without worrying about money. Gaining financial independence does not happen overnight, it takes years of hard work and immense struggle to achieve that position.

Financial independence is when a person has no debts to pay off and can live on their own hard earned money for the rest of their lives. Achieving financial independence involves a lot of sacrifices which may make a person uncomfortable. One of the most important factor to gain economic freedom is to create a proper plan . Expenditure must be planned and done accordingly. Here are a few steps that can help a person to become financially independent-

 

  • Planning-

One of the essential steps in achieving financial independence is planning. One must have a realistic goal set that can be completed in the future. The goal set at the age of 20 by a person might be different when they turn 30. This is perfectly fine as one matures through time so does their way of thinking and understanding things.

 

2) Budgeting-

Having a proper expenditure plan is equally important — a good way to start this to by calculating the necessary expenditure and then preparing an expenditure chart and following it  accordingly. It’s highly important to have fewer expenses compared to income. It is always a good idea to invest a certain amount of money in shares as it provides returns with profit.

Budgeting-Tools

 

3) clearing of existing debts-

It is highly critical that one has clear all prior and existing debts to start becoming financially independent. Loans usually affect the expenditure level thus no budgeting plan can be made until debts haven’t been cleared.

 

4) Career is important-

It is one thing to loved what you do, but if it is not helping you generate high income, then there is not much to it. To become financially independent one has to clear the breaking point and create extra income that can be saved or invested. An excellent way to go about this is to talk with financial experts and get their expertise on how to handle finances.

 

 5) Know how to generate extra income-

It is always good to generate extra income by doing various other forms of work. One can be a part-time consultant and earn a little extra cash by doing so. Acquiring assets such as real estate, cash investments and stocks are great ways of generating additional income.

 

 6) Always be Financially aware-

It is essential to know where you stand on the financial ground. One has to be completely aware of their income, expenditure, and savings at all times.

 

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