Everyone wants to have a car, house, tons of home appliances, and other stuff by the time they get old and they don’t want to worry about their spending. They all want to be financially independent. That means they want to have enough money to satisfy their fancy expenses and other needs. To become financially independent, a person must follow through with all the 7 steps mentioned below.
1. Maintain a monthly budget
A person needs to have a journal where he plans all the expenses and gains that will occur in the upcoming month. That way, he will be ready to tackle any unnecessary expenses. Having a monthly budget will also help the person put some extra money aside as savings.
2. Keep updated on financial issues
If someone wants to be able to wisely spend money, then he should have basic knowledge of the current finance market trends. Such as, what are the new IPO issues. What is the new repo rate? Or what’s the current interest rate of the bank on a savings account? The person may hire a financial advisor if he is not confident with these involvements himself.
3. Investments are key to financial growth
An entrepreneur should always learn the art of investing. Learning to invest in the share market can give great monetary returns that will motivate the investors to invest again and grow their capital. Investing in exquisite government shares is always secure and is less likely to be risky.
4. Set goals in life
Setting any type of goal and later achieving that goal motivates us to go further and further in life. After completing a certain goal such as saving your first 50,000rupees, you should reward yourself by eating out at a restaurant or going to the park. That way you will develop a sense of achievement and before you know it, you would have completed your goal a second time.
5. Analyze your spending pattern
We all have different needs and that creates different expenses, having a clear understanding of someone’s expenses helps them remove some unnecessary expenses from their monthly budget. For example, if someone eats twice at a five-star restaurant every week, after scrutinizing the expenses he might not prioritize eating out anymore and save money instead.
6. Pay off the debts
Debts are such a headache when you are trying to save money. You can take different planned methods to pay your debts. There are customizable options for selecting the duration of the payment and as the duration of the payment goes higher, the rate of interest will also be higher. Everyone is recommended to use credit cards, but not frequently, as they add more debts.
7. Savings savings savings
We can’t stress enough the word “SAVINGS” as it is the best way to be financially independent. Saving at least 50% of your total income will easily keep you covered for any unexpected or emergency expenses.
Being financially independent is not a state of mind. It is a lifestyle that people want to choose along with their career. It may take some time to set your financial records straight and all the future planning is done but in the end, opting for a future with better savings will sure, help in the long run. Don’t forget to follow the above steps you become financially independent.