How do you achieve financial independence?

Different people can have different goals and parameters when it comes to financial independence. For some people, buying a big house, a car and a lavish lifestyle could be the parameter of financial independence. On the other hand, for some people, financial independence could be to have enough bank balance. People choose their financial independence in their own way on the basis of their priorities.

Financial independence is a mark of how comfortable a person is living his or her life with proper savings and investments and zero debt.

How to Be Financially Independent?

1. Set Your Priorities

The first step and the most basic step towards gaining financial independence is to set your priorities. Whether you want that luxury car, lavish bungalow or are you okay with a smaller one but a good bank balance and cash in hand, you really need to think about all these things and sort things in the initial stage only. Your priorities are going to set the future course of action in the long run.

2. Budget

The second and the most important step towards gaining financial independence is setting up a budget. Budgeting is the process to set up a budget for oneself by measuring income and then subtracting your expenses form it. Once you have done that, you will get an idea where you are spending the most of your income. So, if you want to be financially independent, it is always a better idea to budget your expenses.

3. More Income, Fewer Expenses

In order to sustain a good life and be financially independent, it is always better to follow the principle of more income and fewer expenses. Your expenses should never exceed your income. It is always a good idea to save at least 10–15% of your income every month. Living a luxurious life and spending all your income on a lavish lifestyle will always act as an obstacle in your way of achieving financial independence.

4. Consider Your Career

Financial independence cannot be achieved without a steady income which can be achieved only through a good career. If you feel that you are not getting enough income from your current job and you deserve more, then you can try and reconsider your career. One cannot really save and invest a good amount of money without a good salary.

5. Invest Regularly

In order to be financially independent, it is very important to invest regularly a fixed amount of your income. you can go to your bank and ask about the number of options that are available for investment purposes. There are many options which banks offer such as fixed deposits, recurring deposits, mutual funds in which you can invest money and get some interest from the bank. This also helps you to keep track of how much money you have saved in a particular period, for e.g. on a monthly or yearly basis.

6. Track your Financial Independence

Financial planning is not just confined to making set financial decisions and investment plans. The real struggle begins once you have planned all this. You need to be flexible when it comes to financial planning and track your financial independence on a regular basis.

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Originally published at askopinion.com.