While still desired by many, financial independence feels out of reach in today’s society. Our parents were able to move out and support themselves and their families in their mid to late twenties. Now, at the same age, most young women still have to live at home. However, with the right strategy and a bit of motivation, financial independence is something that any woman can achieve. Here’s a guide for women on how to achieve financial independence.
To be financially independent, you have to be able to support yourself entirely on your own. This means you’re in charge of meeting your needs and paying your bills. While it may sound simple, achieving financial independence is challenging, as it requires self-discipline and delayed gratification. I believe that any woman can become financially independent with the right plan.
Knowing how to handle money is essential, but financial independence is deeper than that. You are in charge of your own life when you’re financially independent. Everything, from where you live and what you eat, becomes entirely up to you. Being independent means making decisions for yourself, which is a fulfilling way to approach life.
The first step to becoming financially independent is to become financially literate. You need to know how to handle money and manage it to meet your needs. The more financially literate you are, the less intimidating the topic of money becomes, and you’ll feel more in charge of your finances.
There are hundreds of resources online dedicated to helping people improve their financial literacy. I enjoy podcasts because they allow me to listen while doing something else! Some of my favorites that you should check out include the Wealth Academy Podcast and Rich By Intention.
Setting financial goals provides a number of benefits, such as keeping you focused and dedicated to achieving them. When you have a financial goal, you have a reason to save money and something to work towards. Once you achieve it, you’ll feel a sense of accomplishment that can’t be replicated.
Instead of only setting a single big goal, you can also add a few milestone goals to achieve. Checking off these milestone goals helps remind you of your progress and sustain your mental momentum.
Additionally, not having a goal can lead to spending money aimlessly or entirely for pleasure, which you may regret. Check out my article on budgeting goals for more information.
Reaching your goals is only possible with a plan. Once you’ve identified your financial goals, you have to set an appropriate plan to achieve them in the desired timeframe. This will teach you to be more disciplined with your finances–an essential skill for women striving for financial independence.
Too often, people try to set aggressive budgets in pursuit of financial independence and sacrifice their happiness. However, this often leads to accumulated stress, which becomes impulse buying. Instead of setting an overly ambitious budget, try to set a budget that balances your wants, needs, and savings.
When you’re financially independent, retirement may seem like an afterthought when you have bills to pay today. However, the earlier you save for retirement, you won’t have to worry about those bills. Thanks to compound interest, earlier investors can find themselves with lucrative gains!
There are many retirement accounts to learn about, but one of my favorites is the Roth IRA. Find out more about it in my article here.
Statistically, financial independence for women is harder to achieve than for men because of the wage gap. Because women are paid less, we have less money to go around. However, it’s still important to aim for a higher salary than what you’re earning today, whether through a raise or promotion. The best way to achieve this is to…
In your field, what separates a high-level employee from a mid-level one? Typically, it involves skills, whether interpersonal or technical, as well as your mindset and determination. Find out what those skills are and learn them if you don’t already have them. That is the best way to grow your career while establishing financial independence.
You don’t want your day job to be your only source of income. If you get fired, laid off, or the business closes down, you’ll lose your income with no fallback. This is why it’s important to establish multiple income streams. This way, you’ll have multiple ways of earning money. Ideally, some of them should be passive income streams, which let you earn money while you sleep!
This is a simple rule, but it’s incredibly important for women pursuing financial independence. Living within your means becomes especially important when you have no one to rely on but yourself. You don’t want to spend more than you earn only to have to go back home.
While debt is generally something you want to avoid, there are ways you can use it to invest. For example, getting a mortgage may be the only way to afford a down payment for a property in a developing area. Once that area’s developed, the land you went into debt for may be worth triple its original price.
Despite the previous tip, you want to minimize debt as much as possible, especially unnecessary debt. The less money you have to pay, the more money you can save or, even better, invest.
Overdependence is the exact opposite of independence. Instead of relying solely on yourself, you rely on someone else to provide for you, usually your family or spouse. While comfortable, being overdependent can be dangerous because if something happens to them, it will also affect you. It’s not easy to have your needs be at the mercy of someone else. This is why so many women strive for financial independence.
It’s comfortable to rely on someone else to meet your needs, but not when you want to be financially independent. Achieving financial independence is a challenge, and reaching it means changing some things in your life. If you wish to be financially independent, you need to overcome any apprehensions you may have about it.
Financial insecurity is one of the main reasons some people won’t ever be financially independent. They believe that achieving it is impossible for them, and they lose motivation. If you are insecure about your finances but want to achieve financial independence, check out my article on overcoming financial insecurity.
Just because you’re financially independent doesn’t mean there’s nothing left to learn. You still have to grow your money as much as you can and make yourself last. While your journey toward financial independence will have taught you a lot, there’s always something more to learn.
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Dollars Makes Cents by Shaquana, Financial Coach and Wealth Expert, resources helps professional millennial women of color with the tools and skills they need to eliminate their debt, amplify their savings, and build generational wealth — without having to compromise their lifestyle.
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