A lot of us, strive to be financially independent and I personally believe that is something we should all strive for because as women we should not depend on our male counterparts for financial support, but we should be able to make our own money. Achieving Financial Independence takes a lot of discipline, as no one should be living from pay check to pay check, however keep in mind that is easier said than done but also keep in mind that with the right mindset and goals, you will be financially independent.
If you are embarking on the journey of establishing Financial Independence, just like I am, the first thing you need to do is to educate yourself about money – know the difference between assets and liabilities, take charge of your Debt, keep track of your spending habits and develop multiple streams of income. I personally don’t live from pay check to pay check, but I want to have more assets than liabilities and have my money work for me.
I’ve figured out that for me to achieve that, I need to take the following actions (I’m already halfway on most of them and that is something that I’m proud of):
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Financial independence is a mental, emotional and educational process.
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The first step to achieving financial independence is to minimize your dept. Stop buying thing that won’t create an income for you on credit. For this step I’ve decided that I need to pay off my clothing account from Edgars as quickly as possible and close it because truth be told, I don’t need it. On that account I own R750 which I’ve decided to pay over two (2) months and I should be able to close it after my final payment month-end of December.
The next thing I want to do, as of 2020 is to dedicate the year to paying off my credit card. I opened it because I needed the money to pay for my tuition fees when I was doing my honours. So far, I’ve managed to pay R10 000 and R9 500 is still outstanding, however, I believe that if I stay committed to my repayment plan, I’ll be able to finish it off in less than 12 months and close it as well because I don’t need it.
In my opinion, in order to get rid of debt one needs to fight the temptation of buying things they don’t need, stick to their repayment plan and don’t create new debt. These are some of the things that you can do to get out of debt:
- Learn to live within your mean – your expenses should never exceed your income.
- Make a budget and live by it – it’s absolutely crucial for you to be aware of your spending habits.
- Don’t obsess over what people are doing on social media as that will pressure you into making the wrong financial decisions.
- Have a plan on how you plan to repay your debt and stick to it.
On the downside, these are mistakes that people tend to make when repaying debt and I’m also guilty of committing them, hence, the reason I’m mentioning them:
- Start paying off your debt as soon as you can and don’t wait until you make more money because priorities are always changing.
- If you want to pay off your debt as soon as possible, start cutting on your expenses – eat out less and stop buying coffee from Starbucks.
- Not being committed 100% to your payment plan.
Getting out of debt is all about making the right decisions and being self-discipline.
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There’s always a way – if you are committed.
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The second step to achieving financial independence is to educate yourself about money -understand the difference assets and liabilities and find ways to invest your money so that it works for you even when you are sleeping. In order to educate yourself read books such as “Rich Dad Poor Dad” as these kinds of books will help you understand money better and how to establish your wealth.
Step two(2) is intertwined with step one (1). Once you get the educational base right, you will not get yourself into unnecessary debt and you will spend your money wisely.
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Beware of the little expenses; a small leak will sink a great ship.
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The last step is to develop multiple streams of income. The average millionaire has a minimum of seven (7) incomes. Don’t let society fool you into believing that a 9am – 5pm job is bad, if you love it – then by all means go after it. However, have a side hustle or two, if you want to be financially independent. I’m currently working on establishing that 2nd side hustle and I’m hoping that by next year, it will be up and running. We live in a generation where we have an influx of information and you shouldn’t have any excuses as to why you are still living pay check to pay check.
In order for you to be financially independent you need to take the required steps and actions to achieve that goal. It all starts with you – always keep that in mind.
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You can’t get out of debt while keeping the same lifestyle, that got you there. Cut out everything except the basics.
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Until next time, XOXO!
