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Before we get started talking about managing your finances, we need to first look at what robs you of financial independence.
Are you grappling and trying all measures to do away with debt? Financial independence - does it sound more like a luxury now? Freedom from worrisome debts is not hard-won. The right mindset and a few significant changes play a pivotal role. Is your day job not enough to foot your expenses? Engaging in side hustles could rocket your earnings. Stack enough assets to reward you a pleasurable life. Bringing home the bacon is not very challenging.
What breaks your back and knocks you straight into debt is your lifestyle and a heedless spending habit.
To learn how to rule out financial obligations, it is worth understanding what strikes you and lands you into mammoth debt.
1. Not solidifying your money goals
Without a solid goal to hit, you are as lost as a headless chicken. Unprecedented expenses pop up every now and then. How do you plan to keep your funds on a roll after you retire? Savings is all you can bank upon. Regardless of the circumstances, it is imperative to stash away a portion of your income as savings. Setting up an emergency fund is valuable too.
Planning a seamless future is key. Put your money in plans and instruments that are guaranteed to reap you good profit. Fix upon a number you wish to rack up after a certain tenure. Planning a goal simplifies your financial journey.
2. Delay in squaring off consumer debts
Do you have a multitude of bills to foot? Credit card dues can beef up quicker than you think. Loans, mortgage, and finance on your car - are you juggling to repay your debts? Squaring off the debts on time works the best for you. Of course, it can be overwhelming to clear all dues. But, the more you hold up, the more interests compound and amplify. Settling the debts at the earliest should be a pressing priority if you desire financial independence.
3. Switching up your lifestyle without a thought
A jump in your earnings doesn’t make you opulent and rich. The urge to make a better lifestyle can be crippling. Are you happy to spend big bucks on a fancy car, now that you have the means to pay for it? Treating yourself with a thing or two as a token of self-appreciation is no sin. However, the perks of living a comfortable and modest life reward you with bigger wins in the future.
4. Fear of missing out on the trends
Do you love to hop on trends and follow what’s buzzing on social media? Not great if you are making reckless purchases, only to stay in vogue. You end up burning a bigger hole in your wallet and risking your future. Extravagant buys, fancy vacations, and luxurious amenities will feel satisfying for a fleeting moment. Think before you shell out the fat cheques. It could pave the way for a prospective tomorrow.
5. Not tightening your belt enough
Have a clear idea of the money you are saving today and the funds you wish to stack tomorrow. The more you save, the better you are with silk deep pockets. Start by chalking out a realistic plan post-retirement, automate your payment, invest in money-making schemes.
Effortless Ways To Save Money
Saving money is not exactly a child’s play. Wondering why your switch from being a spender to a scrimp hasn’t helped in increasing your savings? Surviving is expensive. A few essential expenses spring in like clockwork each month. Your mortgage, rent, taxes, and energy bills for instance. You might have cut down spending big bucks for fancy takeaways. But, little do you realize that footing bills for essentials are pricier than you think. Did you assume that bringing home the groceries was cheap? Maybe cheaper than paying for takeouts but is still an inevitable expense.