How To Become Financially Independent

Money Management

From soaring gas prices to high tuition costs, it's almost become the eighth wonder how anyone affords anything. On a serious note, don't let the hype get the best of you. You can be self-supporting with a few money management strategies. Here are a few simple tips to help you become financially independent.

Step 1

Create a budget. Decide which bills are top priority, such as housing, electricity, car insurance, car note, etc. Allocate the necessary income to cover these expenses. Then, decide how much money can be set aside for other expenses, such as entertainment, savings, health care, cell phone, emergency fund, and food.

Step 2

Stick to your budget. Adhere to it. Follow it as closely as you follow your favorite television series. A budget sets limits, but these limits will help you obtain financial freedom because you will be less likely to impulse shop. Impulse shopping is not planning to make purchases, but shopping anyway. For example, when you are out and about and see a really cool pair of shoes, you buy the shoes on the spot. If you are not careful or it becomes too excessive, buying things on a whim is only the beginning of building financial debt instead of financial freedom.

Step 3

Limit the spending sprees. Avoid straying from your budget. If you set $100 a week aside for entertainment, going over $50 every week will set you back $200 each month. Be smart with your money. Hunt for the bargains. Instead of eating out several times a week, try cooking cheaper meals at home. Does this mean you can't treat yourself every once and awhile? Of course not, but do be mindful of the budget you set and the reason you set it. By limiting the spending sprees, you will avoid racking up unnecessary debt that could hinder financial freedom.

Step 4

Avoid unnecessary credit card debt. Use the credit card wisely. If you can't afford it and don't need it, avoid the urge to charge it. If you do use your credit card for emergencies or big purchases, such as car repairs, have a plan to repay it. For example, avoid unnecessary spending that will add to your balance. First, work on paying the balance you have down before adding any new charges when possible.

Step 5

Save. Keep some of your paycheck. Even if you save $50 a paycheck, that can add up to over $1,000 by the end of the year. Saving won't do you any good if you make a lot of withdrawals from your savings account, so do your best to leave your savings alone.

Becoming financially independent is something you can achieve. Avoid unnecessary spending and save what you can. Before you know it, the dollars will add up.


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