4 steps towards Financial Independence

 

Financial independence is a dream for many, and a goal for some. Yet, financial independence seems to slip through the fingers of the vast majority. You have likely tried your hand at several different approaches, still none have been able to give you the desired results so far.

 

The good news is that financial independence CAN be achieved. By making a few adjustments to your life, you will find yourself starting to pave your way to financial independence. Put on the shelf your idea to work harder or to put in longer hours. Read on to find 4 tips, and start your journey towards financial independence.

 

  1. Eliminate "bad credit" from your life. Having a good credit score can open up opportunities for you.  But living in the credit culture also puts you in a stressful situation. Robert Kiyosaki makes a distinction between good and bad credit. In a nutshell, "good credit" brings you money, whereas "bad credit" takes money from you.

 

  • If you are seeking financial independence, and you are not  already familiar with "good vs bad" debt, start by doing away with credit.
     
  • You probably have a few credit cards in your wallet. Get rid of them or if this too radical, move to a debit card! If you manage to make full payment on time, you can keep a credit card. Just ensure the credit limit is somewhat in line with the amount of cash you have saved.
     
  • If you are not able to buy something with cash (or money you already have in your account), it probably means you can't afford it ... for now! This is all about activating the Warrior archetype by delaying gratification and building discipline.
     
  • Avoid borrowing for frivolous expenses. Those are usually the hardest loans to repay.
     
  1. Treat needs and wants differently. Take a look at your life. Marketing has done a great job convincing us that we need "a lot of stuff". Take a minute and remember the Maslow pyramid. Look at the bottom of the pyramid, this is what we truly need. The higher you go in the pyramid, the closer you get from "wants".

 

How many of the things you have or do can be considered necessities? If you are honest with yourself, you will notice you are probably piling on unnecessary expenses focusing on your wants rather than your needs.
 

  • Creating a list of the things you require for survival is a necessary step for financial independence. You cannot build independence without strong foundations.
     
  • Everything that didn't fit in the list can be eliminated from your expenses each month. Why put that amount of burden on yourself? I am not advocating to get rid of everything outside necessities, the message I hope to convey is to consciously select your "priorities" and create a buffer, a level of safety for you in the long term.
     
  • The things you do to maintain a calm existence can be added to your list of necessities. For example, your yoga class, or meditation sessions may be necessary because of the physical and emotional benefits. But you can save by purchasing guided meditations and working out at home.
     
  1. Develop and tap into your skillset. You are most productive when you are doing something you like or are good at.
     
  • Is your current position bringing out the best in you? Or, can you feel more energised, earn more and increase your productivity in another field?
     
  • Maybe you can move to another department at your current place of employment. Or maybe you want to move on to something completely different. Another company, self employment, remote work ... which option suit you best?
     
  1. Save money at all costs. Even if it is a tiny amount, put aside an amount of money each month. Learning how to save helps you develop an understanding of its importance.
     
  • One way to save is to request a salary deduction each month. That amount can go to an investment account, which limits your access.

 

  • If it cannot be done by your company, automatically transfer a fix amount on the day your salary hits your bank account

 

After reading those tips,  you will certainly think that it is much easier than you probably thought to make some simple financial adjustments. Give yourself a month and then assess how it is going. You'll feel encouraged by the positive results! You will also likely be challenged by uncomfortable thoughts, feelings and habits. When you hit that wall, take our quiz and find out what is driving your money related behaviours. This is the next piece of knowledge you will need before any meaningful long lasting change!