Achieving financial independence requires much more than taking a few considered steps erred heavily on the side of material caution. To be truly in control of your financial future, you have to make creating financial independence front and centre of your fiscal playbook.
This doesn’t mean scrimping and squirrelling at every opportunity you get, turning down nights out with the girls, and saying ‘no!’ to every retail purchase, but it does require conscious spending and smart saving.
Financial independence comes from a holistic approach to all areas of your life which takes into account past, present, and very importantly, future decisions.
“To be truly in control of your financial future, you have to make creating financial independence front and centre of your fiscal playbook”
Try breaking down your actions into three areas:
If you find yourself feeling as if your finances are quickly spinning out of control, a great place to start is prevention. Prevention is preemptive and should ensure that, whilst you sort out your current cash flow, you don’t dig yourself further into a cavernous black hole of debt.
- Really think of the small stuff – bought coffees, quick drinks and take away lunches are all silent ‘killers’ of budget success. A bit of planning in advance and some modesty can make a huge difference to your future.
- Set up separate accounts for different types of revenue – this is an oldie but a goodie. The ‘jars system’ is known to work well because it adds visibility to your saving efforts.
- See a financial planner – getting advice from a professional is a great way of putting your own personal situation into perspective. Not only will they be able to look at your finances objectively, they’ll also be a great source of ongoing support on your journey. Remember, financial planners aren’t just for the rich, they’re for the smart and also for those wanting to educate themselves for the future.
- Set yourself a goal – it might be a lovely dinner out, a weekend away, or a fun purchase. You have to have small rewards to make the efforts worth it.
- Seek guidance – friends and family members usually have some great personal tips. Why not discuss saving techniques and challenges with your girlfriends over a few glasses of vino every now and then? Shared tips will help everyone out.
“Remember, financial planners aren’t just for the rich, they’re for the smart and also for those wanting to educate themselves for the future.”
Getting on top of your spending is one thing, but regulating your ‘good behaviour’ is often the part that people find most difficult. Whilst short-term financial freedom can feel rewarding, it’s ongoing, consistent smart decisions that will create long-term financial success.
- Break things down into small achievements – look at each bill and account separately and get them each under control, as opposed to trying to look at the whole picture at once, all the time.
- Engage your suppliers early – don’t wait until your third default notice to get things sorted. Many creditors are generally quite happy to develop payment plans to help you avoid stiff penalties.
- Set aside time each week to focus your financial future – if you’re part of a couple, do this together. It’s always difficult when only one person feels like they’re carrying the whole burden, and this may help you feel like you’re in it together.
- Get the kids involved – make it fun! Kids have great imaginations (as you’ll know if you have any), and having them involved can often be great motivation. Have you ever considered ‘fake take’ nights (homemade meals to replace expensive take-away), or getting them involved in the prep and cooking?
“Many creditors are generally quite happy to develop payment plans to help you avoid stiff penalties.”
Lastly, but not at all least important, take stock of your current situation and identify any areas in your finances where you can renegotiate your loans for more favourable terms of repayment. Your situation may change over the lifetime of a loan and oftentimes financial institutions will be understanding of this.
- Take time to re-quote things like house and contents insurance, car insurance, phone and Internet plans and health insurance.
- Also take time to re-quote the bigger things like credit cards and home loans – it’s amazing how much you can save by chatting with your providers to make sure you’re getting the best deal (but not compromising on quality).
“… take stock of your current situation and identify any areas in your finances where you can renegotiate your loans for more favourable terms of repayment”
Financial tips for this article were kindly provided by People’s Choice Credit Union.