Being financially independent is a life goal for many people, but achieving this important life milestone is more easily said than done. There’s no miraculous formula that solves your financial struggles overnight.
However, there are some easy-to-follow steps that can definitely bring some aid to your financial situation. These tips require dedication and sacrifice but the payout is worth the hassle.
Knowing how to handle your finances in order to reduce debt-induced stress, may clear your path to achieve other important goals, like being able to save for the future or retirement. It can also boost your credit score which is very important when you’re on the path towards becoming financially independent.
Stick to a budget
Everyone says that making a budget is important, and it is indeed a useful tool…when you actually use it! More than just making a budget, it is vital that after making one, you commit to it.
A budget helps you create spending plans so you have more control over your income and this clear picture helps immensely to achieve your financial goals.
In order to come up with a good budget, you need to make one that is tailored to your expectations. You need to define the purpose of your budget. For example, it can be a budget that helps you spend less than you earn or one that allows you to save the same amount every month.
It may be one that helps you to pay off debt, start a retirement fund or maybe it can be aimed towards much bigger goals, like saving to start a business of your own. It comes down to your personal financial circumstances and only you know what your financial life goals are.
When people don’t make budgets, they can sometimes lose control over their money and end up spending it on things that are not going to help in the future or your big plans.
If you are no longer single and if you have already started a family, then it is important to change your current perspective about your budget-making skills and start including it in your life.
It is also important that you’re not so hard on yourself so you can learn to recognise the small achievements. For instance, if you create your budget responsibly and after a couple of months you were able to get rid of a small portion of your debt, you need to recognise that as a victory that puts you closer to your dreams.
Pay off the debt entirely
The biggest obstacle people encounter when trying to achieve financial independence is debt. Getting rid of debt should be a top priority in your quest towards becoming financially independent.
A good idea is to pay a little extra than the amount reflected on the statement, little by little you start decreasing debt. You can also choose a credit card with the lowest balance and start paying that one. Another method is choosing the credit card with the highest interest rate and get rid of that one first.
Remember to recognise the small victories, and looking at the big picture. Once you manage to pay your debt completely, you should make your best effort to remain debt-free. Try to use your credit cards only for emergencies, you can even try to start an emergency fund.
Have clear financial goals
This task requires time and introspection, you need to sit down and write what your financial goals are right now, and which ones are your financial goals for the future. It may be a trip around the world, start a new business, invest in something or maybe you’re looking to retire early.
The important thing is that you know that depending on how well you handle your finances now, you’ll have less trouble achieving them. Keep making a top priority of the goals that interest you the most and focus on them.
Prioritise them in a way that it´s clear which ones are short-term goals and which ones are long-term.
Boost your income.
It’s no secret that the more income you have, the closer you get to your goals, therefore if you find yourself struggling with your finances but want to become financially independent, maybe it’s time to look for ways to improve your earnings.
It is easier to say this than doing it, but right now there’s a solution that people are currently exploring and it’s to find out if there’s a PPI claim that can be filed in order to get the money back.
This is known as the PPI scandal and basically what happened was that banks were deliberately charging their customers with insurance policies without their consent or when it was not necessary for customers to have one. It affected people who were granted loans, mortgages and credit cards and banks did this for many years.
Once the government discovered this, they forced banks to give the money back to their rightful owners. Therefore people are finding out if they were affected by this in the past, and get the money back.
You are just one click away from confirming if you can boost your earnings by filing a PPI claim over mis-sold insurance policies.
The final date to file any claim is August 29th 2019, so it’s wise that people hurry and find out if you can start a claim process. This is tax-free money that will surely help you boost your finances and get you closer to your dreams.