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Struggling to become financially independent? Start with these tips

Updated on: 20 August,2022 05:04 PM IST  |  New Delhi

Being financially independent isn't just covering your basic necessities but also being able to save and protect your money against inflation and wasteful spending, eventually leading to you having enough

Struggling to become financially independent? Start with these tips

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Earning money is definitely easier than saving up money for yourself. Many people are constantly trying to figure out how they can save more money and spend less on frivolous things that may have no long-term gain. Being financially independent isn't just covering your basic necessities but also being able to save and protect your money against inflation and wasteful spending, eventually leading to you having enough. It should be able to help you sustain even when your income reduces, and if you are able to do that without any trouble you have succeeded but if not, you need to start now. 

OctaFX offers top 10 tips and advice for achieving financial independence. Keep in mind that the advice will only be effective if you make it a habit to use it. Though time and effort are required, it is worthwhile.

Track your spending
Start by learning your financial inflow and outflow. It might be hard to keep your daily purchases in your head or on a piece of paper, so if your banking app does not do that automatically, install one of the expense tracker apps.

Come up with a realistic budget
Next, craft a realistic budget that fits your lifestyle. Doing so is not about cutting back on spending: if you are accustomed to having coffee every morning, cutting it out from the budget won't work. Instead, try to plan ahead what you are going to spend your money on.

Create an emergency fund
Creating an emergency fund will help you deal with unforeseen circumstances without borrowing money with interest or selling your things to get out of the situation urgently. Putting aside 1 USD (approx Rs 80) a day will give 30 USD (approx Rs 2,396) more to your account at the end of the month.

Pay your bills on time
Tracking your monthly bills is actually a part of your budgeting plan. Paying your bills on time is an easy way to manage your spending and avoid fees.

Get rid of unnecessary recurring charges
If you have ever signed up for a free trial to a streaming service, you might have recurring charges you have forgotten about. Check your credit card statements and ensure you don't pay for something you can live without. Unsubscribe and put that money aside for your emergency fund. 

Pay cash for expensive things (most of them)
Loans help you with major life purchases like a house or a car. For other big purchases, say a 65 inch TV, cash is often the best way to go as it saves you the monthly interest payment you would otherwise have to pay.

Use credit cards wisely
Most credit cards nowadays come with a free annual fee, and promotional offers could sometimes be beneficial. However, be sure your repayments are on time, keep your credit card limit for tight situations, and repay purchases within a month to avoid additional fees.

Diversify your savings
To protect your savings from inflation and other negative market factors, try diversifying them with different currencies, precious metals, and real estate income (earned from renting out a property). This will make your portfolio more resilient.

Start saving for retirement
Regardless of your age, start saving for old age-the younger you are, the more you will get. Set up a separate fund or term deposit to ensure you don't access the funds for purposes other than savings.

Create an investment strategy
Choose wisely. There are many forms of investment: some are more easily accessible, while others are more complex. However, even a small contribution to your investment is a potential for additional income and financial independence.

Let's say it again: the tips above will help you create a more independent personal financial system only if adhered to daily. Being independent is not a hobby-it's a lifestyle.

Also Read: Love oversized clothing? Follow these tips to help you style it better

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