Achieving Financial Independence is a goal of many people. Financial Independence for Women is also very Important .It generally means having enough cash, investments and assets on hand to support the lifestyle you always wished. Unfortunately, many fails to achieve financial independence due to bad financial habits or lack consistency in following financial disciplines.
If you are also riding on the wrong track, following these 10 ideas will surely get you on the right track to achieve financial freedom.
1. Set your Life Goals, Visualize and Plan
Ask yourself what are your Financial Goals? How much bank balance you want at certain age? How big an apartment you want ? Write down your goals. Visualize them. Create an image of yourself receiving a statement from bank having desired bank balance in the account . Imagine yourself sitting in your car and heading towards your dream apartment. Be realistic particularly about, at which age or after how many years you want it. Create a roadmap, like set targets for first 3 years then next 5 years each and run after your plan.
2.Make a Monthly and Yearly Budget
Always make a budget for your monthly expenses and stick to it . Make sure all the bills and necessary payments are made immediately. Once the expenses are calculated try to invest or save from the remaining portion of your income. Keep track of your expenses and cut down on unnecessary expenses.
3. Pay off your debts early
High Interest consumer loans, personal loans, credit card loan, etc. are toxic to wealth creation. Make sure you never miss an installment of such loans. Try to prepay these loans. Sometimes, its not possible to prepay long term loans such as Mortgage loans, Education loans etc. but try to make part payments other than regular installments. It reduces your future applicable interest and tenure of the loan depending upon the terms of loan.
4. Create an Emergency Fund
For tackling circumstances like Job Loss, Delay or reduction in salaries, Sudden Losses in business, you should have enough money to meet the needs of you and your family for at least 4-5 months. So that you never have to reach out to anyone in difficult situations. Always keep a small portion aside every month and use it in case of contingency only.
5. Start Investing Early
There no better way to grow your money than Investing. Start Investing your money early to get the better and compounding returns on your investments. It can definitely answer your question about How to Retire Early. Start small with monthly SIP ( systematic Investment Plans) in equities. If you have adequate knowledge of How to invest in Stock markets, start accumulating and investing in shares regularly. It will give you with good returns in future.
6. Always spend less than your earnings
Try not to spend more than your earnings. By not following this tip, you will surely enter in a Debt Trap, where major portion of your earnings are spent towards installments and nothings is available to save or invest. At least 15 to 30 percent of your income should be invested and try to manage your expenses in remaining.
7. Keep Yourself Updated
Keeping yourself updated about latest Tax laws, Investment rules , etc. will ensure all the adjustments and exemptions are properly utilized. Keeping up with daily financial news will definitely give you Ideas about which sectors to invest for good returns in future and which ones to exit to avoid losses.
8. Never Skip Insurance Premiums
A person with good financial health never misses any Insurance Premium. Be it a Life Insurance Premium or Health Insurance Premium or Car Insurance Premium, always make sure to make the premium payments well before the due date to get the maximum benefits of insurance policies.
9. Don’t Ignore Your health
Never ignore your health at any point. What’s the point of your earnings if you are not able to enjoy your lifestyle you always wanted ? Remember, more the illnesses in body, more the cost of medication and higher amount of health insurance premium. So Always keep yourself fit and healthy. Visit your family doctors regularly to keep a check on your health.
10. Consult a Financial Advisor
Once you reach to a certain level up Financially, where you have a good amount of Liquid assets and Fixed assets, its always better to consult a Financial Advisor or Financial Planner to advise you with making future investments to get better returns and manage your finances smoothly.
These ten ideas will not make you rich in a single day, but following these in a disciplined manner will definitely bring you closer to financial freedom.