Becoming financially independent is a goal shared among many people. It makes sense. After all, when you’re financially independent, you have enough money to do what you want – within reason, of course – and you have money in savings too. You can enjoy your life without worrying about day to day finances. It sounds like a dream, but the fact is that with a little hard work and planning, it’s possible to achieve.
Set A Goal
Before you can do anything else on your journey to becoming financially independent, you need to set a goal to aim for. Simply saying you want financial freedom is too vague and won’t help you; you need to be more specific, and the goal you set will be unique to you.
Some examples of these all-important goals include owning your own house or paying off your debts within a certain timeframe. You might even want to retire early and travel. Once you have this goal in mind, everything that follows becomes easier.
Live Below Your Means
Once you know what you need to save for or have money available for, it’s a good idea to start living below your means. In other words, you don’t spend every penny you earn (and you don’t put anything onto credit cards), and instead, you aim to spend as little as possible. Everything that’s leftover can be put into a savings account, helping you to move closer to becoming financially independent.
If you find this is difficult because of the debt you have to service each month, you might consider a debt consolidation loan from OneMain Financial. If you do this, you might be able to pay off multiple debts and have just one monthly payment, which could be less than you’re currently paying. You’ll also have an end date for when this is paid off, and you’ll potentially be paying less in interest too. When you do this, you should have some extra money to put away to help you become financially independent.
It’s important to remember that debt consolidation may lower your interest rate or monthly payment, but be sure to consider origination fees and the length of repayment, which can offset the savings or even increase the total you pay over the life of the loan.
Not everyone will be comfortable with investing, and not everyone will have the means to do it, but if you like the idea and you’re happy to try it, investing can help you towards becoming financially independent.
You’ll need to take plenty of expert advice and never try to make money through investments on your own, but it could be the ideal solution. Of course, no investment is going to bring you money right away, and in some cases – such as when you invest in property – it can take many years to bring you the money you need to be financially independent. However, if you have a long-term plan to work towards, investing could work out. Never invest any more than you can afford to lose. However, this is a golden rule to keep in mind at all times.