10 tips to become financially independent

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New Delhi – What does it mean to be financially independent? It goes beyond simply being able to cover your basic living needs like rent, food, utilities and medical care. Saving money, protecting it against inflation and unnecessary expenses, and building your capital over time are all important parts of financial independence. Your personal financial system should be able to support you even if your primary source of income dwindles or disappears altogether.

OctaFX offers its top 10 tips for achieving financial independence. Keep in mind that tips will only be effective if you make a habit of using them. Although time and effort is required, it is worth it.

Track your expenses

Start by knowing your financial inflows and outflows. It can be difficult to keep your daily purchases in your head or on a piece of paper, so if your banking app doesn’t do this automatically, install one of the expense tracking apps.

Set a realistic budget

Next, develop a realistic budget that fits your lifestyle. It’s not about cutting expenses: if you’re used to having coffee every morning, cutting it out of the budget won’t work. Instead, try to plan ahead what you’re 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 stuff to get out of the emergency situation. Setting aside $1 a day will add $30 to your account at the end of the month.

Pay your bills on time

Tracking your monthly bills is actually part of your budget plan. Paying your bills on time is an easy way to manage your expenses and avoid fees.

Get rid of unnecessary recurring fees

If you’ve already signed up for a free trial of a streaming service, you might have recurring charges that you forgot. Check your credit card statements and make sure you’re not paying 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 make major purchases like a house or a car. For other large purchases, say a 65″ TV, cash is often the best bet as it saves you the monthly interest payment you would otherwise have to pay.

Use credit cards wisely

Most credit cards these days come with a free annual fee, and promotional offers can sometimes be beneficial. However, make sure your refunds are made on time, stay within your credit card limit for difficult situations, and refund purchases within a month to avoid additional charges.

Diversify your savings

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

Start saving for your retirement

Whatever your age, start saving for old age – the younger you are, the more you will receive. Create a separate fund or term deposit to ensure you don’t access the funds for any purpose other than saving.

Create an investment strategy

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

Let’s say it again: the tips above will only help you create a more independent personal financial system if they are followed on a daily basis. Being independent is not a hobby, it’s a way of life. (IANS)