How To Gain Financial Independence
Let Financial Independence Ring!
This year we celebrated the 242nd anniversary of America’s independence from England with fireworks, BBQs, swimming, parades, flags and other ceremonies. Independence is a great thing to celebrate and can be a huge accomplishment, whether it’s from Great Britain or heading off to college and being on your own for the first time; but what about Financial Independence? Financial independence can take time, effort, and a lot of planning. It’s a feat that takes most people the majority of their life to accomplish and many never do – or do to the level they aspire to.
One of the hardest parts is figuring out where to start. Here are a few tips to get you headed in the right direction:
Take Control Of Your Finances
Spend less than you earn! Easier said than done, right? One way to help take control of where your money is going is by tracking how much is coming in each month and how much is going out to see where you stand for your monthly bills.
Once you get an idea of what money is coming and going, keep track of the patterns to try and predict and budget for upcoming months to reduce the amount of money you spend if possible.
A second strategy to take control is to make a list of things you absolutely need. If you are considering buying something but it is not on the list of “Things I Need”, don’t buy it.
Going along with that, stray away from using a credit card unless you intend to pay it off immediately after. Once you start putting things on a credit card it is easy to let your debt add up to a point where it is more challenging to tackle. Credit card interest can add up quickly. Instead of getting the great deal on those shoes, you could end up taking on 3 months of interest and you will have ended up paying more than full price! Bye-Bye Deal!
Increase Savings Accounts
The first thing that comes to mind for some people is that in order to increase your savings, you need to have a large income. That is not necessarily the case, it may be possible to grow your savings with a small income. Take $10 a week or $10 a month, start small & increase it when you can. You may have an amount automatically moved from your checking account into your savings each month, and then don’t touch it! Once you have 3 months of expense in the ’emergency savings’ account, it might be the right time for you to look at investment options.
Your investment plan can be part of your strategy to help you reach your financial goals for retirement.
If possible, spread out your investments. There are many investment options available, including stocks, bonds, and mutual funds. Speak to an investment professional to help discover which options are best suited for your individual retirement income needs.
Use The Right Tools
Trying to manage your finances can seem intimidating, but there are tools out there to make the process easier. Some can make budgets for you, monitor your investments, and sometimes even find new ways to save. Some of the most popular sources are: 1
- YNAB (You Need a Budget) – For basic budgeting needs.
- Personal Capital – A financial dashboard used to track your budget and investments.
- Mint – To track budgets, spending habits, and trends.
Putting everything down on a spreadsheet works just as well for some if you prefer to stick to basics. A spreadsheet gives you direct control over what you track, and keeps your data in one place for you to see instead of a different program or application.
With the combination of using the right sources to take control of your finances and increase those savings accounts, you can work towards your goal of financial independence. As always, if you would like more information on this topic stop by our office anytime or give us a call at 417-882-1800, and make sure to tune into Bruce’s show next week.
Sources:
- https://www.forbes.com/sites/robertberger/2015/11/19/7-budgeting-tools-to-better-manage-your-money/#47cb9dd74274
- https://www.listenmoneymatters.com/financial-independence/
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Investing involves risk, including the potential loss of principal. The information contained in this material is believed to be reliable, but accuracy and completeness cannot be guaranteed; it is not intended to be used as the sole basis for financial decisions.
We are not permitted to offer, and no statement contained herein shall constitute, tax or legal advice. Individuals are encouraged to consult with a qualified professional before making any decisions about their personal situation. Our firm is not affiliated with the U. S. Government or any governmental agency. Insurance products are offered through the insurance business The Resource Center Insurance Services LLC. The Resource Center, Inc. is an Investment Advisory practice that offers products and services through AE Wealth Management, LLC (AEWM), a Registered Investment Advisor. AEWM does not offer insurance products. The insurance products offered by The Resource Center Insurance Services LLC are not subject to Investment Advisor requirements. AEWM and The Resource Center Insurance Services LLC are not affiliated companies. 02203800/ 4-24
