The major key to being successful financially is not about how much you earn and how much you have in your bank accounts. It is not entirely about staying debt-free either. As a matter of fact, you may be earning six figures and still wallow in debt.
Here is a simple case study. Mr. A worked his whole life at a mid-level job but still retired comfortably. Mr. B held down a high-paying job with massive bonuses but still ended up in penury. The difference between the two might, I repeat, might be down to the fact that Mr. A probably prioritised retirement savings and managed his income the best way he could, while Mr. B most likely spent more than he earned.
Here are some tips to assist you in attaining financial independence.
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Awareness is key
Awareness is the first step with everything, says Frank Murtha, co-author of “MarketPsych: How to Manage Fear and Build Your Investor Identity.” Once you are aware that you need to make some financial decision, the rest becomes very easy. The first awareness is to become financially literate and read extensively about money. Here is a list of financial books you can read to set you off on the right part;
- Your Money or Your Life: Vicki Robin, Joseph R. Dominguez, Monique Tilford
- The Science of Getting Rich (A Thrifty Book): Wallace Wattles
- Secrets of the Millionaire Mind: T. Harv Eker
- Think and Grow Rich: Napoleon Hill
- Rich Dad, Poor Dad: Robert Kiyosaki
There are several other blogs and sites all over the Internet where you can learn about financial literacy, explore them and come back to thank me later.
Manage your income
The best way to manage your income is to make sure you spend less than you earn. This might not be so easy because as human, we are always inclined to spend, especially when we have money. But, if you spend less, you’ll most likely find it easy to save and invest. However, the key to spending less is to have a budget. A budget helps to prioritise your need, guide your needs and track your spending. It’s not easy to spend less without having a monthly budget that determines what you spend your money on. Once you get control of your spending, using a budget, trust me, you are on your way to financial success.
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Manage your debt
The only way to prevent debt is to avoid it. If you have a credit card, don’t get tempted to always use it and don’t forget to pay off the debt you have on it.
Another way to avoid debt is to stop borrowing anyhow. Yes, you are earning six figures and you are creditworthy, but don’t take it as a licence to pile up debt for yourself. And if you have a genuine reason to take a loan, don’t just take it. Take your time to look for the right loan service with the best interest rates.
Manage your savings and investment
Saving money is not enough if you want to be financially independent and successful; you’ll also need to invest the money. Investment is an ideal way to save because it helps you make more money and increases your wealth. If you don’t know how to go about investing your money, ask questions from financial experts. You can also consult a financial advisor for more guidance. Sometimes, we are scared of investing because we read of so many people, who lost a fortune to the stock market; do not let this deter or discourage you. You can learn; maybe, it was just bad timing. You can still make choices, and you can tell yourself, I will become more educated and learn about Portfolio investment instead.
