Financial independence

Financial Independence 

Financial planning is the management of short-term in addition to long-term finances. Financial independence creates a balanced plan to meet certain goals. Financial planning creates financial independence, moreover each step complements the other. It is important to have financial independence for a number of reasons and one of the important reasons is, job security is an illusion.

Financial independence usually comes when you succeed in your financial planning, to the point where you have money surplus after paying your fixed liabilities.

How to be financially independent? 


It is a crucial question, yet has simple answers.

Be wise with your expenses, and prioritize your spending. You might go like “should I buy this shoes now?”, here comes the critical points you need to address. Do I need this shoes, now? Yes? then does its quality meet its price? Yes, will it be on sale anytime soon? Yes. Then buy it on sale. This is not greed, nor means that you are short on money. But it actually means you are wise on “where” to spending your money. You would rather spend those $20 difference, on a gift or a fancy night out, or even on the “travel” jar. Or  what is even better: invest it in a business or education.

Luxurious life is not the main aim that requires wise financial planning. The main aim which needs financial independence is serious events coming ahead whether we see it or no.There should be money kept for emergencies, no matter what level it is on.


Miscellaneous SPENDING

On the other hand, do not hold yourself back from living life. If you want to spend money on something, go ahead and do it. However, my point is you should not neglect miscellaneous spending. As we usually tend to see it as something uncounted, while it causes huge impact as a whole. Think of it as calories. if I eat a piece of cake everyday and it has only 500 calories, I would think that I still have 1500 calories left in my day to consume. But in a whole month I would have consumed a total of 15,000 calories for just eating a small piece of cake every day. I spent 15,000 on something that doesn’t give me real nutrition I need. But also it doesn’t cause any harm for taking bites every now and then.

Can you see where I come from? Be smart with allocating your expenses. Be able to differentiate between necessity and luxurious. Take care of your spending routine.


Choose investing over saving

Financial independence

What is better than saving? Simply it is investing.

Invest in your time and education, that is one of the best ways to ensure higher financial stability. Financially poor people mainly rely on saving, while financially wealthy people tend to invest. Do you know that $20 I mentioned above? could be used in a project you want to start, or a degree you want to hold. Can you see why wise spending and financial independence is important?


Create a daily, weekly or even monthly routine for calculating your expenses and income. Staying on track with what you spend and what you gain, keeps you alert and up to date with your financial state.

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