5 Steps Toward Financial Independence
Whether you’re a brand new grad or regrouping after a layoff or other financial difficulties, you may find that it’s more difficult than you’d imagined to wean yourself from any monetary help you’ve been getting. Though most of the process is straightforward, it’s always good to remember what it takes to achieve financial independence.
1. Get a Job
While finding a job in your niche or industry is great, any job is better than none at all. With job markets still sluggish, getting your foot in the door anywhere will help you towards your financial goals. Once you’re in, it doesn’t mean you have to stay. Getting a job that will hold you over, though, may mean the difference between making it on your own and moving back in with the folds.
2. Know Your Expenses
It’s easy to get overwhelmed with the different types of expenses you have, particularly if you aren’t used to paying them yourself. While writing a check here and there will get the bills paid, you’re more likely to achieve financial independence if you’re intimately familiar with your expenses.
Knowing approximately how much you pay each month in certain categories will also help you find any problems. If your electric bill suddenly skyrockets, you’ll know you need to investigate to find the source of the extra charges.
3. Commit to Saving
Being financially independent doesn’t only mean paying your own way now, but making preparations to do so in the future. Plan ahead as soon as you have some extra money, and it will go far towards ensuring your financial independence even if something bad happens, like you lose your job or face a large, unexpected bill.
Put your savings away after your regular expenses are paid and before you buy anything else. This will help your savings grow and make sure that you stay committed to it in the long term.
4. Prioritize Essentials
Make sure you know how much money you’ll need each month, and categorize your expenses. Determine which ones are necessary, which are high priority, and which ones you can eliminate if you need to. This will help you know what to pay first, as well as how much money you need to make to achieve your goals.
Prioritizing your expenses also gives you a good idea of how much you need to make each month. If your expenses are high, consider lowering them by finding roommates or changing your lifestyle for a few months, until you can get more income.
5. Give Yourself a Deadline
Decide when it’s realistic for you to achieve your financial goals and make that your deadline. Once you have that in mind, you’ll know how long you have to find a job, find a place to live, and figure out your personal budget.
Deadlines provide fantastic motivation. With one in place, you’ll be more likely to follow through on your intentions and to do so in good time. Of course, your deadline isn’t absolute. If something falls through or your situation changes, you can always move it back. But don’t move it unnecessarily, because then it isn’t a deadline at all.