Gone are the days when people were overly dependent on their parents or relatives for money. With the cost of living going through the roof and lifestyles getting complex, financial independence has become the need of the hour.
Fortunately, millennials too have started to wake up to this fact. Take Prince Harry & Meghan for example. They are starting a new life in Canada after breaking away from the royal family in an unprecedented split. While your story could be far less dramatic than that, the key takeaway is to tread a path of financial freedom where the money you earn is the money you spend.
Here are some of the ways you can achieve financial independence in the 21st century:
Start with a budget
The golden rule of every financial planning playbook is to create a realistic budget which will give you a blueprint of your finances. Segregate your must-haves from the discretionary expenses and drop anything that you deem as an excess. A budget will also help you figure out areas where you are regularly spending money and allow you to cut down accordingly.
Cut unnecessary expenses
With a balance sheet of your monthly expenses, you will realize how you have been spending a bulk of your money in the wrong direction. From lifestyle habits such as smoking/ drinking or junk food to needless memberships, all these things can dent your financial freedom and leave you a pauper in the middle of the month. It’s time to finally let go off needless spending habits and maintain a tight hand while spending money. A small example? If you eat out 2-3 times a month, try to cut it down to just one and try cooking your own meals.
Maintain healthy savings
From birthday weeks to special occasions, millennials spend a lot of money during social obligations. And then what? You guessed it! They go broke. Rainy day money is the key to survival when the going gets tough. With a healthy corpus, you will never lose your financial freedom and ensure that you can stay afloat without seeking extra money from your elders.
Boost your income
Youngsters have an advantage of agility and freshness over older people. This is what helps them find jobs easily. Avoid staying put at one place just because you don’t wish to step out of your comfort zone and try to upgrade your job to get a salary bump. If you are a student, you can always divide time between studies and work by working odd jobs or taking up freelance projects in your field of interest. With more income in hand, you can easily save extra money and fund a decent lifestyle without seeking financial help from others.
Avoid any debt trap
Without sound financial advice and guidance, youngsters become easy prey to debt traps and end up accumulating a significant amount of credit even before they turn 30! With a debt pile so big, financial freedom will elude you all your life. The key to avoid this is to ensure that you pay off your debts regularly and minimize the use of credit card. You can look up several strategies on the net, such as snowflake method or avalanche method to pay off your debts. Once you settle all your dues, you can divert the money in other positive areas such as savings or investments.
Seek financial advice
Most young people make the mistake of trying to manage their finances on their own without seeking advice from their elders. Isn’t it better to approach your parents or elder relatives for advice instead of money? Aside from well-wishers, you can also seek professional help to understand the best ways to keep your finances in control.