How to be Financially Independent

1 – Work out a budget and stick to it. Don’t be too brutal with yourself. Build in treats, but not too many. Be honest about the difference between what you want and what you

2 – Set financial goals. Be specific and measurable about when and how much you want to have saved or invested.

3 – Be aware of your bad habits when it comes to money – whether it’s the small things like indulging in takeaway meals a bit too often, or the larger things like forgetting to pay your utility bills in time to take advantage of the early payment discounts. Note them, then change them.

4 – Get out of debt. Interest paid on credit cards and loans is lost money that could have been invested. So if you’re brave enough cut up those cards, or at least put them in the freezer, and live within your means – or better still below them.

5 – Set up automatic savings so that the money comes out of your pay account as soon as it goes in. This will ensure you do save, rather than being tempted to put it off till next month.

6 – Educate yourself on all things financial, from the best bank accounts available to the movement of the markets. Some of our previous articles might help you get started, Asset Allocation Strategies, Active vs Passive Investing, and Retirement Income Strategies, all cover areas you will need to be aware of.

7 – Start investing now – it doesn’t matter how small. Something is better than nothing, and the sooner you start the sooner independence is yours.

8 – Remember to diversify. We have talked many times about the importance of diversification in the success of a portfolio, and this is particularly relevant if you are going to be relying on your investments for income and not just growth.

9 – Find a good financial advisor, someone you trust and then listen to them.