Financial independence: Many people believe that enjoying financial independence means enjoying a stable job, through which they get a wonderful salary, and they do not depend on others to pay the daily expenses.
Of course, working in a job that provides you with a fair monthly profit so that you do not go through difficulties to bear the burdens of daily expenses is an important matter. However, know that this does not at all mean the dream of achieving the desired financial independence.
In fact, it is essential to maintain a certain character of quality and a stable model in life, by enjoying the money available, without having to retreat from certain dreams and plans for the inability to advance them.
In other words, financial independence is a concept that goes far more than achieving high numbers of thousands of dollars.
(Despite the fact that the more money we earn, the more our lifestyle tends to change as well, and additional expenses may arise with it).
What you have to understand is that regardless of the money you earn now, in order to be able to reach independence, there is a chain of practices that you must start implementing, which is what we talk about today in this post.
Would you like to know the Seven Practices to Achieve Financial Independence?
Read this post to the end, and you will realize its importance in achieving your dream goals.
1. Control your expenses
As we talked about at the beginning of the post, achieving financial independence means being able to maintain a good quality of life, thanks to the money you earn.
So, the first practice you should take is to monitor and control your expenses in line with the money you earn.
What does this mean?
When we think about control, we think we must stop spending money on those matters that may seem superficial, or are only aimed at personal satisfaction and well-being. But that is not what we want to talk about.
We all deserve to spend a little on ourselves, on those things that make us feel better, whether we eat at a different restaurant, buy new shoes, invest in a hobby or take a trip somewhere.
But every time you spend money, always remember the money that you earn.
The calculation method is always the same, regardless of whether you earn a lot of money or less. You can never spend more than you earn. That sounds obvious, right? In practice, however, it may seem a bit more complicated than we imagine.
Most of the time, what we do is this: Suppose we earn about $ 2,000 a month in money.
When we think about using that money for personal expenses, we remember the full total amount that we earn, and so we end up spending a lot more money than we should.
The truth is that before you decide how much money you can invest on something that may not seem very necessary, you should analyze your essential and essential expenses first.
First, think about the amounts that will be deducted from you when you get this amount of $ 2000, due to income tax, tax for social insurance, union discounts … etc.
After these discounts, set aside the amount you spend every month on rent, water and electricity bills, food and all household expenses.
And what is left of the salary is really the amount that you have to control better.
Before spending everything, set aside part of the amount or invest it (we’ll talk about that in the following paragraphs), and set a percentage to spend on yourself.
Perhaps you will not be able to achieve your dream of traveling to the place of your dreams within 3 months, but if you know how to control your money well, you may be able to make that trip during a period of 8 months, for example.
2. Use organizational charts and tables
Organizational charts are great to show us what we’ve actually spent. In order to reach financial independence, it is very important to know how much money you earn and how much money you spend.
In the first advice, we talked about how to control your expenses. Tip # 2 complements the first tip.
When you set up organizational charts to organize your bills, whether daily, weekly or monthly, you can ensure greater control over your financial gains.
Make a table of all the amounts you spend throughout the month, even if it is a candy bar that costs a few cents.
When you can document all of the money spent, it becomes much easier to devise strategies that can help you save more money.
If you are not sure how much you spend every month, you may be going through a state of financial instability, and you will not be able to think of a way to control your expenses.
Therefore, document all movements of your personal funds, even if they are primarily personal expenses.
3. Beware of credit cards
A big mistake many people have is dealing with the credit limit available to them on their credit card, as they think it represents the amount they can spend per month.
This is not true, after all, when you buy with a credit card, this means that you do not have that amount that you want to spend at the moment, and you have to pay it in the next month.
We’ll give you an example:
Imagine that you earn about $ 2,500 net per month (after subtracting all the rebates), know where to spend this amount, and can afford all of your basic expenses every month. However, you do not have enough money left to spend on yourself, and you invest the remaining amount or save it.
Somehow, you have a credit card and it has a $ 1000 credit limit, since you don’t have money to spend you decide to use the bank card, and you think you can use the full credit limit on it.
Herein lies the big problem. There are some people who can control their expenses by thinking of how much they earn, but when the issue is the credit card, people tend to go over the limit and spend money that they do not have.
The more you use the credit card, the more money you owe to the bank, not to mention the high bank commission that you have to pay, which increases the amount of the amount that you owe to the bank.
So, don’t buy with a credit card unfairly, just use it whenever the need arises. Carefully analyze if you have the money to pay your credit card bills in the next month, without having to withdraw some money from the money you save.
4. Seek to develop professionally
The higher a grade in the career ladder, the more we get reward, and when that reward is related to salary, the better. Always try to improve on the professional level to increase profits and profits.
Invest in the field of education: follow educational courses that can help you in the job you are holding (there is a very good option for those who do not have time to go to educational institutions, is to follow educational courses online ) Participate in the events and activities that exist in the market, follow the lectures related to the market sector .
Don’t be afraid to grow and change jobs. It is very good to have a new challenge, and that could be a step forward in reaching financial independence.
But beware of moving only because of the salary because it is higher, because you will do a job that you do not like, and this is what generates you frustration and loss of enthusiasm. (If you’re struggling with a loss of enthusiasm, we have a post that teaches you: 9 Modes of Self Motivation .)
5. Think of additional profitable activities
If you have a natural talent for playing a musical instrument, crafts and crafts, decoration or any other activity that is different from what you normally do, what do you think of practicing it as an additional profit activity ?
Naturally, this doesn’t have to be a stepping up routine, and so you need to look for something that you know to do that doesn’t cause you a loss. However, if you can add another activity on weekends to your weekly work and tasks, you will have another additional source of income at the end of the month.
And since you can have everything you need depending on the fixed income source you get, use that extra money to invest or save to reach financial independence in the future (because if you don’t win the lottery, you probably won’t be able to reach that financial independence between Overnight).
6. Set achievable goals
It is very good to set specific goals in order to get there. When we talk about financial independence, this is also important.
Think about the goal you aspire to reach, in the short, medium and long term. But remember to set achievable goals. Thus, you can save money with concentration, and when the time comes to invest this money in what you have planned, you will not have big surprises. You will rather be ready to spend what you need.
However, something very important is not to be complacent about your goals. Having taken the dream trip you took never means that you have to stop frugal. Rather, when you can achieve the goal, set other goals.
This way, you will always have the incentive to maintain financial stability and control over it, which will help you a lot to reach financial independence.
7. Learn to invest your money
The last piece of advice you should start applying to reach financial independence is learning to invest the money you save.
It is not very common to make financial investments, but you should start by thinking about how the money you save can generate more profit.
Maybe you’d rather keep your money the same in a postal savings account – a savings account and earn some of the commission that the bank pays you. But the problem begins when we start to overuse the money we deposited in the savings account.
We are not talking in this post about how you should invest your money, but if you are interested in this topic, find people who know how to invest money in some of the investments that may be profitable for you. Always think about entrepreneurship , and look for new opportunities that can make you grow and develop.
It is time to gain financial independence !!!
As you saw in this post, you can reach a state of financial independence, through these seven tips and practices, you will be well prepared to achieve your dreams.
Do not be fooled and think that financial independence can be achieved overnight, we ourselves have mentioned that to reach this, you must have a lot of focus on your goals, know how to spend your money carefully and cautiously, and learn to control and monitor all the amounts that go out and enter your account.
And remember, the most important thing: keep your earnings well above your expenses.
Is there a practice or method that you followed to achieve financial independence that was not mentioned in the text? Share it with us via the comment space! Peace be upon you and the mercy of God.