Reaching financial independence is not always something that comes easily or quickly, and can require both planning and commitment.
However, whilst it may seem daunting at the beginning of your journey to economic security, it is possible for people of all incomes to reach a stage where they feel financially independent.
AppJobs have interviewed a series of experts who have reached financial independence and are enjoying the fruits of their hard work, and collated their comments to show a list of top tips and techniques to help others achieve this too.
Covering a variety of financial challenges, from getting out of debt to going on holiday without constantly checking the bank account, these snippets of advice may be the kickstart you need to achieve economic independence.
Set yourself reasonable expectations
With incomings and outgoings varying significantly from person to person, it is important to focus on setting personal goals that work for you.
Eric Rosenberg, finance, travel and technology writer in California emphasises the importance of ‘taking some time to analyse your lifestyle and find out where you can make realistic changes in the first instance to become financially free.’
Finances often depend on a variety of factors, from your living location, relationship status, career, hobbies, and interests. Rosenberg advises to ‘start by setting reasonable expectations, timelines, and goals for what financial freedom means to you and how you can get there.’
Once you’ve considered all the aspects of your life and lifestyle, you can then work on creating a budget plan that works for you and is a reasonable, realistic adjustment.
Your income can increase forever
According to the Money Advice Service organisation, the savings figure to work towards to ensure a financial cushion for yourself is to have three months worth of essential outgoings available in an account you can instantly access.
Whilst it is crucial to put savings away to ensure financial freedom, Rosenberg offers a useful reminder that ‘unlike expenses, which you can only cut so much, income can increase forever.‘
Exploring new ways of earning money is a way to not only speed up your journey to financial freedom, it also can allow the journey to be less stressful as you’ll have some extra cash.
Robb, from A Richer You advises to ‘Increase your income as much as possible.
Ask for a raise, start a side hustle, or start a business on the side.’
With the gig economy in Britain accounting for a staggering 4.7 million Brits, side hustle jobs are the up and coming way to earn some extra money.
Give up the monthly payments
In a world where the option to buy now and pay later is available at a simple swipe on our phones, it can become easy to rack up a significant number of payments each month, from transferring money for a high-tech television, sofa or even a holiday you’ve booked.
By January 2019, there were 60.1 million credit cards issued to UK residents, highlighting the popularity of this payment method currently.
Advice from Chonce at My Debt Epiphany suggests that these quick and fast payments can be dangerous due to our disengagement with paying for things directly ourselves, as they come out of our bank accounts each month without us even realising.
Chonce advises to avoid these monthly payments because ‘when you say no to most forms of debt, it frees up your money and allows you to actually choose what you do with it’.
Every little, helps
On the journey to financial freedom, the end goal can often feel a long way away and can leave people feeling deflated and impatient.
Having said this, it’s important to note that the journey to financial independence is a marathon, not a sprint, and saving small sums of money each day and month, have a great impact a year or two down the line.
Jon Dulin from Compounding Pennies highlights that ‘saving $20 a month doesn’t seem like a lot, but over 20 years it is close to $5,000 before adding interest into the mix’.
And this applies to your outgoings too, as ‘If you go over your budget $100 a month, in 10 years you overspent by $12,000!’
The Money Advice Service organisation reinforce that despite your incomings, anyone can start to save.
You just have to begin with small amounts. For example saving just £3 a day adds up to an impressive £1,095 in one year.
It may not seem like a lot at the time, but in the long run this can really help provide you with that financial cushion.
With a variety of tips and tricks to help save some money each month, it’s important to think about the techniques that suit your lifestyle and begin implementing them to start your journey to financial security!
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