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Steps to gain financial independence

Becoming financially independent is a goal, that a lot of people have, but they aren't sure how to get there. This blog will give you 4 steps to put you on the road to financial independence.

1. Set a goal

The first step in anything is to clearly set your goal. You can't get to the finish line if you don't know what it is. When discussing financial independence one of the most popular mindsets to have is to set a S.M.A.R.T goal. S.M.A.R.T stands for: 

  • Specifics—How much money exactly will I need to save to become financially independent?
  • Measurability—How will I be able to track my progress toward financial independence?
  • Attainability—Am I sure I’ll be able to become financially independent?
  • Realism—Is saving up the kind of money financial independence requires possible?
  • Timeliness—How long will it take for me to achieve financial independence?

Using this mindset when creating your goals will ensure that you are setting the right goals, and putting achievable checkpoints in front of you.

2. Create a Budget

Once your goals are set, the next step is to make a budget that gets you to your goal. This budget should prioritize saving. Saving as much as you possibly can will help you reach your goal of financial independence faster. When it comes to budgeting, like most things the obstacle that everyone faces is " I don't know where/how to start." Luckily MCT has a solution for this. MCT's "My Budget" tool will make your budgeting goals crystal clear. The "My Budget" tool will allow you to set specific savings goals such as: saving for a car, saving for a house, planning a vacation, and many more. 

 

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3.Create an emergency fund

Putting money aside for an emergency fund is essential. Creating an emergency fund won't necessarily help you gain financial independence in a short time, but it will help protect it. It is always good to have an emergency fund no matter what stage in your financial journey that you're in. Luckily we have already covered this topic in great detail! For information on how to get started on your emergency fund check out our blog Create an emergency fund.

After you have read through our blog on creating an emergency fund, check out our blog on Maintaining the emergency fund.

AdobeStock_384948185-14. Pay off debt

One of the biggest things that can keep you from financial independence is debt, especially high-interest debt. Make paying off existing debts a priority. You may even want to make a financial category for paying off debts in your budget to get yourself out of debt faster.

Once you get out of debt, be careful about getting back into it. Learn the difference between good debt and bad debt, and make sure that going into debt will actually help you achieve your financial goals instead of dragging your farther from them.

If you would like help or have questions regarding starting your journey to financial independence contact us using the button below.

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