5 Simple Habits for Becoming Financially Independent
Financial independence is not about what you think you saw on your Instagram feed: a perfect vacation trip to somewhere different (from tropical country to continental one or vice versa, for example), nice car with the new AI tech of self-driving, or even beautiful house with latest interior design trend of modern classic Japandi.
Becoming financially independent means simply feeling safe and comfortable in whatever financial condition you are in now or later on or if you’re striving for work less, live more attitude, financially independent means having sufficient wealth or assets to live on. The basics are all expenses covered in monthly basis and also, having no worry to spend them on something more luxurious.
Do you agree?
Whatever your financial goals are, they would be different to other people, even to your closest family and friends. Some people prefer a getaway once a month, some people don’t. Some others want to ride their cars daily, but the other ones only need a car-ride hailing once a week.
All we want is to be free in enjoying life of our own without financial limitation. But, the essential habits to become independent financially are the same:
1. Save First, Spend Later
You will need enough money in savings to reach your own financial independence. In order to do that, saving money should become a priority over spending it. This first habit will be a real life-saving (pun intended) because you would easily build wealth with money on hand, especially when it becomes a safety net when the time comes so it would not ruin another financial plan in the long term.
2. Say No to Consumer Debt
Credit cards and loans are not the best ways to get the consumable goods you want. When you thought you could control your cashflow by owning a product now but paying an affordable monthly payment later on, actually you took away your habit to consciously manage your expenses. Not to forget that the product will depreciate over time. Of course, it would be different when you buy some rising assets by credits. It still is a win-win.
3. Invest in Rising Assets
Rely on savings alone would not save or even benefits your financial independence plan, you would want to invest the money into some assets that will generate more income for you. Mutual fund, stocks, owning and renting property could be a choice for you. You just need to start small and learn it the long way.
4. Have a Budget and Stick to It
A record of personal or family expenses will be useful in the long run. It would help you keep track of your cashflow mindfully. You may realize that some amount of money could be beneficial if turned into assets or the product your bought last month is a liability. Having a budget also helps you see that some bad financial habits, for example, impulse buying and lifestyle upgrades, would hurt you more than you realize.
5. Take Care of Your Health
Maybe it is not directly related to your plan, but it can heavily affects your performance in making money and maintaining minimum monthly or annual expenses. Investment in good health is an investment nonetheless. A healthy body and mind is the assets that would help you earn some more.
It’s not that hard to start preparing your financial independence plan if you know how. Follow those 5 habits slowly and steadily starting from now. Have a community of like-minded people, share and get advices. Learn and relearn a lot of times and you’ll get there before you know it.
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