သူထန်ကိုယ်ထန်(မြန်မာ)
Are you looking forward to discovering how to achieve your financial independence? Next, check out the 10 tips we've separated for you!
1. Start as soon as possible
Financial independence is a long-term project. After all, it can take many years for you to catch up. When we talk about getting started, we are referring to planning and defining a plan of action.
The reason is that, without planning, it is very difficult to achieve a goal of this size. If you want to achieve financial independence, start today. Among the tips that are in the next topics, check what can be done now and take the first steps.
2. Make a financial plan
Planning is important for financial independence just as a map or GPS is important for a long trip. Before traveling, you need to know where you are going and what you need to do to get there, right?
to do good financial planning toward independence, the first step is to know your finances.
List all this information to get to know your finances in depth. Maybe your income is not enough to pay all your expenses. In that case, find ways to reverse the situation to stay positive.
3. Pay your debts
Debt is very harmful to financial goals. The bigger they are, the less you are able to save money. Not to mention the costs of fines and interest, which are like drains. After all, they easily drain money.
If your salary is not enough to pay for everything you owe, it is worth thinking about extra income. Maybe you have certain skills that can become a source of income. Think of services you can provide or products you can manufacture to sell.
4. Avoid incurring new debts
Once you've paid off your debts, it's essential to keep controlling your budget. Don't be tempted to take on new debt. Ideally, your cost of living should fit within your budget—and, in fact, be one notch below it.
That way, there will always be money left over. So, try to know your possibilities and don't spend for status or impulse. Your financial independence can get further and further away when things like this happen.
If you have some money left in your budget, don't see it as an opportunity to make new purchases. In fact, this is your chance to start investing, if you haven't already started.
5. Spend less than you earn
Some people spend more money than they make. Clearly, this does not work, and this situation is unsustainable. At some point, things become very difficult. On the other hand, there are those who spend what they earn and have a standard of living that matches their salary.
However, as we have shown, this is still not ideal for those who want to achieve financial independence. It is important to have a standard of living a little below what the salary allows. Can you see the reason for this?
To spend less than you earn opens up the opportunity to set aside money to invest. In addition, it is possible to have some money left over to make one or another extra purchase without breaking the budget.
6. Keep a close eye on your spending
After you organize your finance, it is necessary to maintain control to avoid future problems, do you agree? For this, it is essential to monitor your spending closely. Once again, it is important to highlight the importance of having all your expenses written down.
Thus, it is possible to make projections of expenses and define an action plan. This follow-up can still help you find opportunities for improvement. With a careful look, it is feasible to find expenses that can be reduced or even eliminated.
For those who want to achieve financial independence, this careful monitoring is essential.
7. Plan before you buy
Do you think a lot before buying or are you in the habit of buying on impulse? To achieve financial independence or any other financial goal, you need to have good habits in this regard.
When the desire to buy arises, assess whether the product is really necessary. Also, think of a way to make the acquisition without going into debt. A good practice is to collect the money in advance.
With efficient planning, you will avoid making financial commitments that will harm your goals.
8. Avoid splitting your purchases
There are people who, when deciding to make a purchase, use as a criterion the fact that the installment fits in their pocket. In fact, one or another installment may not hurt your budget. The problem is when your card bill contains several installments, referring to different purchases.
The accumulation of installments can generate larger bills than you were imagining. There is another important detail to consider: when you split your purchases, you miss the opportunity to get lower prices.
Therefore, whenever possible, avoid installments. This can make a difference in your goal of achieving financial independence.
9. Define your goals and objectives
To maintain discipline and follow the tips you are seeing here, it will be important to know your goals and motivations. Financial planning includes setting clear goals. In general, they fall into three categories:
short-term — goals that will take about a year to reach;
medium-term — goals that will take two to five years to achieve;
Long-term — goals that will take another five years to achieve.
Among the short-term goals, we can mention the emergency reserve. Medium-term plans include plans like buying a car or taking a family trip. As for financial independence, it is in the long term.
By mapping all your goals, not just financial independence, it becomes easier to work towards achieving them. Remember to set a step-by-step, for example, to see how much you need to save monthly to raise money for each of them.
10. Invest and let the money work for you
We've already talked about making money work for you. This is because of the effect of income on the investments you make. But, of course, when investing, one has to choose suitable alternatives. For this, important care is to know your investor profile.
Conservatives generally have a low tolerance for risk and prioritize safety. The bold are already more risk-tolerant, as they give priority to the chances of obtaining a higher return. In the middle ground between the two, there are moderate investors.
