How to become financially independent

2 August, 2023 / words by IALH Editorial Team

Written by Emiley Phillips

Image by @campuzanoashley

In today’s world, financial independence is such an important goal…we all want to be able to fend for ourselves and fund our own lifestyle without the worry of relying on others or waiting for the monthly pay check to come in. More so, living without being financially limited from having escalated debts, poor habits of overspending or unnecessarily spending. 

As always, IALH has your back, so here we talk top tips on how you can become financially independent and live with enough savings and cash to drive whatever goals you desire for your future.

Create your own life goals

You cannot work towards what you want to achieve if you do not know what you want to achieve! Take a moment to sit down and reflect on what financial freedom is to you? What kind of lifestyle do you want to live – do you want to have a lavish life? Or are you happy with just the simple things? There are so many considerations here…from where you want to buy your groceries, to how many holidays/where per year, to what kind of fashion sense…literally think outside of every box! 

Once you have an idea of what your future lifestyle requires, you can plan from there in terms of how to make it possible.

Move to consider how much money would be required to fulfil your goals? And what deadline do you set yourself to make it happen? Set yourself milestones that lead to the deadline and break the ultimate goal into smaller ones that you work to achieve. 

Top tip here: write down this goal and have it in a place you can refer to. Research has shown that people who don’t write down their goals tend to fail much easier than those who do write down! The actual figure being 1.2-14 times more likely to be successful with written down goals! You can make it exciting and fun too with a cute notebook or planner – we all love some cute stationery right!

Budgeting is a must

You may or may not have heard of the 50-30-20 budgeting rule. Ultimately it is the concept that you should aim to spend 50% of your monthly income on needs, so what you need to live daily i.e. rent, food, transport, bills. Then you would spend 30% on wants, so eating out, trips, shopping. And the remaining 20% would go towards a savings pot or paying off debts. 

This sounds good and simple right…but not always is it possible. One month your wants may require more than 30% of your income, perhaps it is a family members birthday…or one month your bills may double – I mean we are in a cost-of-living crisis right now so who knows what will happen?!

The idea is that you keep this rule of thumb in mind and try to stick to it as much as possible. You will be grateful later on in life when you realise that you have more savings that you thought! Any unforeseen emergencies or when you get to retirement things will not be such a struggle.

Rethink your lifestyle

If you are someone who lives affluently, then it may be all parties, holidays, top quality food and fun, but take a step back for a moment and think, is this worth it at present? Perhaps this is your lifestyle, and you are happy but you also live at home with your parents, are single and work a basic job. Yes, you may be comfortable, but realistically is this helping for your future?

What about when you have a family, or want to move out? It will take much longer, and you will only get older in the process.

Sometimes it is about adapting and learning to live a good life with less for a short period, to be able to life affluently and financially free going forward. Reconsider your mindset and see the benefits.

Start saving early

You have heard it all before, but there is no better time than now to start saving. In life, emergencies come up all the time, unexpectedly. To alleviate the stress of unforeseen expenses, have some money to hand in an emergency fund. There are so many options too when it comes to saving – pretty much every bank out there has a savings account option, and many come with decent interest too, meaning you get a small amount added to your account monthly, from the bank, as a sort of thank you for leaving your money in the savings account! See- even the banks are encouraging you to do this.

Saving can also come in a free way…enroll in your employers pension pot. This means they will give you money towards your pension, often matching your contribution each month. It does not need to be a lot but when it happens monthly for numerous years of which you work, just think how much you will have stacked up by the time you retire!

Now for your pep talk

Don’t be hard on yourself. We all aim to achieve financial freedom but realistically, we do not always get there. Just take from this piece here, that it does not come overnight, and it does not just magically happen. It is up to you to make it happen…start with that plan and work your butt off to see it come to fruition. Commit and always keep it in mind.

A lot of people do not achieve it because they are scared of making the changes needed to make it possible. So prepare and get ready, you will need to go outside of your comfort zone to get to your later zone of comfort. Maybe you need to ask for a pay rise, or you need to say no to things you really want to do…get your big boots on and do it.

Ensure to adapt the changes to you too. If you have never saved before, starting by saving 20% of your monthly income might be quite a lot to take in, so start with 5%, or a smaller more achievable amount. The whole idea is to make the tips here relatable to you and realistic. Goals should be SMART…and if you do not know that acronym by now then get learning! It works through way too many aspects of life to live without knowing.

So, there you have it huns. Five tips to help you reach financial freedom. I hope to speak to you on the other side of life, living the lifestyle you dream off, and fending for yourself! After all, we all deserve it, right?! 


IALH Editorial Team


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