Importance of Financial Independence
“Financial independence is the ability to live from the income of your own personal resources” – Jim Rohn
Introduction:- Jim Rohn, an American entrepreneur, motivational speaker said,financial independence is the state of having enough money to cover one’s living needs without relying on loans from outside sources or other sources of income. Having financial independence is essential for doing this, whether you are employed, an entrepreneur, or a freelancer.
But everyone needs to be aware of the distinction between financial freedom and financial independence. Financial freedom is when your passive income is so significant that it enables you to splurge and live the life of your dreams as opposed to financial independence, in which your passive income is just enough to meet your essential costs and a little extra so you can enjoy life. Let us achieve our first goal financial independence first.
Also Read:
- Financial Challenges for People with Disability
- Challenges in Parenting in 21st Century
- Importance of Old People in a Family
- Money Management for Children
- Personal Financial Planning
Table of Contents
How to Achieve Financial Independence?
It is too simple to achieve financial independence with a few simple measures.
Describe Your Financial Objective:
Everyone aspires to be financially independent, but identifying and establishing your financial goals is the first step in working towards this. Decide the age at which you want to reach the lifestyle you desire.
Find an Income Source:
Becoming financially independent requires having a source of income. Whatever it is, it should stem from your passion or area of interest. Without passion, anything you do will not last for very long. Make sure your decision is clear, and have a plan for how you want to develop it. Starting something is crucial, if you want to finish it. So, stop worrying about the outcomes. As the saying goes, “Something is better than nothing,” so get started, put some effort into it, and it will help you gain the independence you need.
A single income is by no means sufficient today to qualify as financially independent. We must make plans for the passive income. It might involve anything, including buying shares, investing in mutual funds, or creating a home-based small business. Not only does meeting basic needs fall under the category of financial independence, but small-scale enjoyment as well. Thus, passive income will support this.
Monitor Your Spending:
To be financially independent, it is imperative to keep track of your spending. Eliminating frivolous expenditure will provide you a clearer picture of your income and expenses. Monitoring costs involves both reducing unnecessary expenditure and making sure that money is being spent where it should be. By doing this, you can save a certain amount from ever being wasted and put it to good use or invested.
Savings and Investment:
After monitoring, saving and investing come next. When the going gets tough, saving provides both financial and moral comfort. Even in the worst-case scenario, it will advance you to the next level with great optimism. So, establish the practise of saving and investing money. Over time, spending even a tiny amount will enable you to achieve greater goals in life. Money would need to continue to expand when we are sleeping. Every wealthy person follows this.
Maintain Emergency Fund:
The amount set aside in advance for emergencies makes up the emergency fund. It should be equivalent to six months’ income or all annual expenses. By doing this, you can rely on no other people or other forces during an emergency.
Live Financially Independent:
We can achieve financial independence by doing all of the aforementioned things. Everybody should learn the art of managing their finances.
“If you want to be financially free, you need to become a different person than you are today and let go of whatever has held you back in the past.” ~ Robert Kiyosa
Benefits of Being Financially Independent:-
Financial independence knows no gender. Men and women should be aware of their money situations and take necessary steps to improve them. Being self-sufficient will keep you healthier and have no detrimental effects on your self-esteem. Your ability to support yourself can make your parents pleased of you as well. You can use it to establish new businesses, acquire new assets, and enhance your lifestyle and worth. Your ideal existence is attainable. By helping others, you not only raise your own level of living but also those around you. You can assist others by making financial donations, hiring new employees for your company, supplying them with suggestions for new ventures, etc.
Financial Independence in Student Life:-
You are free to purchase whatever you want. When a student, it is preferable to have financial independence. When you are a student, you do not need to make more. You only need a little to take care of yourself. Early experience with money management will show you where and how to spend your money. as well as where and how to reduce the extra costs. By managing money at a young age, you can learn about yourself. This will assist you in managing your finances wisely when you are a part of everyday life and work.
Financial Independence & Money Management:-
Money management and financial independence are not just about taking care of oneself and developing oneself; they are also about assisting others. You’ll feel good about yourself and have emotional peace, so you can live your life. You won’t need to depend on anyone else or any outside factor as long as you can make money on your own.
