How to become more Financially Independent

Being financially independent is a worthy goal for anyone.  Unfortunately, to many people, it seems more like the impossible dream than a possible goal.  It can be done, but it will take time and discipline.  However, contrary to what many people believe, it may not be as difficult as it seems.

Start by setting up an emergency fund.  Set as much money aside as possible each month so that you can have that emergency fund.  It may be tempting while you are doing this to feel that you deserve to have nice things and that you deserve to do things like going out to dinner, etc.  You also have to remember, however, that you deserve not to have to go into debt every time an emergency arises even more.  Put aside at least 3 months worth of expenses, in case of job loss, cars breaking down, or medical emergencies.  If you do have to use these funds for an emergency, replenish them as soon as you possibly can.

Don’t use credit cards for anything.  This is often the hardest part of becoming financially independent, but it is the most important.  The banks and credit agencies have many, if not most people convinced that they have to use credit in order to keep a good credit rating.  The truth is that if you are financially independent, your credit rating will not matter, because you won’t need credit.  Instead of using credit to buy things, decide on the things that you want, and save enough that you can pay for them in cash.  You can even do this with cars and houses, although it may take longer than it does with other things.

Keep your bills as low as possible.  This even includes your food bills.  You can save money on food by using coupons and shopping the sales.  You can save money on utilities by calling the companies and negotiating the lowest prices possible.  You can also save both your wallet and the environment by conserving energy.  These things will give you more money to save, and the biggest part of being financially independent is having enough money saved to live on.

Finally, if you are going to stay financially independent, you have to invest your money carefully.  Research anything that you are going to invest in carefully, and make sure that it is a safe investment.  If you are going to invest in the stock market, invest when the market is down.  Even though many people panic and start selling off stocks when the markets go down, you are actually best off if you invest during these times, as your money will have more growth potential.  Try to buy stocks that pay dividends, so that your money will grow itself.  In the end, if you want to have financial independence, you will have to take a few risks.