Four Money Moves You Should Make for Financial Independence

Most people would probably agree that having financial freedom is extremely important for a life filled with joy and no worry. Having the ability to leave a legacy for your next generations while enjoying your life traveling, starting your business, or doing things you’re passionate about is a goal most people strive for.

Financial independence is crucial, and if you feel lost and frightened by the term, don’t worry, as I’ve got your back. Being financially free is not easy, but it is possible. No one formula works for everyone, but there are different things you can try that will lead you to your financial freedom.

Follow these simple money moves to achieve your financial freedom so you don’t feel financial anxiety anymore. It may not be easy to save money during a difficult time like this, but it is worth it—like many things in life. You’ll need to be patient and consistent, but know that it is absolutely normal. Becoming financially free is not easy and doesn’t come overnight.

• Visualize and Plan
• Budget and Track Results
• Have a Safety Net and Negotiate Your Salary
• Pay Off Your Debt and Save for Retirement

Visualize and Plan

Just like you won’t find a winning formula for becoming financially independent, actually being financially free doesn’t look the same for everyone. For some people, this might look like money in the bank; for others, a debt-free lifestyle. Maybe for you, that looks like coming to a warm home that’s been paid off after a lavish weekend in the mountains. Whatever it is, you probably have one goal in mind—to live a life without worry.

Visualize what being financially independent looks like for you and write it down. Now that you have clarity about what that means for you and how it looks, you can work your way to it by writing down small steps you can make to get closer to that life.

Make sure to write down both your short-term and long-term goals. That will make it easier for you to dissect all of the small things you can do daily to help you reach your goals. For some, that might look like making their own coffee in the morning instead of buying it, and for others, that might mean adding a dollar to your piggy bank each day.

Budget and Track Results

Budgeting is the number one thing you need to start doing if your goal is to become financially independent. If you don’t know your income or your spendings, you won’t be able to make predictions about what needs to happen for you to achieve your financial goals.

Make a money date—light a candle, pour a glass of wine, and go on a date with your money. Take all of your bank statements and receipts and start writing everything down. Soon, you’ll have a great insight into your income and expenses.

Now try to find things you’re spending money on but don’t need. For example, you only need to pay for one fitness app, so cancel the other one. See if there are small expenses, and try to find a way to cancel everything that you no longer use.

You will not only feel better, but you’ll be one step closer to achieving your financial goals.

Many people fail to account for discretionary spendings. Those are the things you buy when you don’t plan on buying anything—movies, dining out, or coffee to go. Those are never fixed, and the amount varies from month to month, and that’s why many people miss predicting.

By setting a budget for discretionary spendings, you are making sure you know exactly how much you’re spending on what, and you’ll be able to cut down on things you can go without.

Have a Safety Net and Negotiate Your Salary

This is not an easy step, but it is necessary. An ideal situation would be to have enough funds to live for the next three to six months if you were to lose your job. For many people, this will feel normal, but for many, it will sound unreachable. While it is absolutely normal to feel overwhelmed with these numbers, it is essential you do whatever you can to get close to that.

Your emergency fund might look different from other people’s funds, but having at least $1,000 will be more than enough to cover some sudden expenses without you having to think about credit as a solution. The whole purpose of the emergency fund is to help you manage your unexpected expenses.

A great way to save more money and be able to pay off your debts might be to talk to your boss and ask for a raise. Many times, people above you are ready to make an investment in you if you are willing to step up for yourself and ask.

Pay Off Your Debt and Save for Retirement

Paying your debt just might be the most challenging part in pursuing your financial goals, but it is probably the most important one. Debt is not a fun thing to have, and anyone who has it can’t start saving money and cannot be financially independent. Getting out of debt means you don’t owe anyone money. Whether it is a bank loan, a student loan, or you borrowed money from a friend, it is crucial you clear every debt you have so that you can start investing that money,  putting it into a savings account, or save for retirement.

Paying off your debt might mean reducing your spendings in other areas of your life. Discretionary spendings are often the first place you should be looking when trying to reduce your life spendings. Canceling a dinner with a friend at a fancy restaurant doesn’t mean you can’t still hang out with your friend over brunch or coffee. After all, it’s not so much about food as it is about spending quality time with your friends. There are great cheap, healthy meal recipes if you are willing to cook.

If you have multiple debts, a good idea might be to start with the high-bearing ones. Credit cards and personal loans are a great place to start. You can then start thinking about paying off your car, student loans, and mortgage. 

Whether you’re starting to plan your financial independence or are already implementing some of the strategies to get there, try the tips above, and you might find yourself financially independent sooner than later.