Achieving financial independence is not easy but if you follow the above steps and commit, 2020 might be the year you finally start to see financial results.
It is only you who knows what being financially independent means. But even if your ultimate goal is not to have a big house or a private jet, achieving real financial freedom is something that all of us want. Follow these ten tips to enable you to make 2020 the year you finally learn how to live debt-free.
- Imagine what you want, then plan it. Think about what you really want, for example, how much money you want to save by the end of the year. Then find a qualified financial adviser who can tell you how realistic this plan is.
- Budget. Budgeting helps you to track your finances. So for instance, if you see that the large bulk of your salary goes to rent, you could plan to move to a smaller house.
- Spend far less than your salary. Make sure that between 10 and 15 per cent of your salary goes to your savings account. So for example, if you earn a salary of Ksh 40, 000, immediately put 4, 000 as your savings.
- Create better safety nets. Safety nets include things like an emergency fund where you put in small amounts of cash such as Ksh 100 every week you can use in case of an emergency such as your gas running out in the middle of the month.
- Get rid of debt. The mobile loan you have not yet cleared can tie up your money. In 2020, resolve to get rid of any such debts you might have as this is the best way to free up your money to invest and save.
- Think about your career. You do not have to quit a job you love but if it does not bring a steady income it is time to rethink it. For instance, while you might love music, if it brings you enough to just survive, it would probably be best to look for a job with a steady monthly income.
- Buy things that will help you create more income. It is important to understand everything you want to invest in. For example, if you want to buy stocks, read widely in that company so you can buy the best.
- Downsize. Analyse your money in the context of your life situation. For example, stop buying lunch every day if you know you cannot afford it. You will achieve your objectives faster if you cut your living expenses.
- Always have an idea about your finances. Situations and life changes and your financial plan must be flexible to withstand negative and positive changes. For example, if you lost your job in 2020, you must still be in a position to live well without going into debt.
- Keep your business or career moving. In 2020, aim to move up a step in your career or push your business in a new direction. For instance, apply for that management position or apply for another better-paying company. These steps will help you grow your income.
Achieving financial independence is not easy but if you follow the above steps and commit, 2020 might be the year you finally start to see financial results.
