Your Path to Financial Independence – 2 Steps to Financial Independence

Your path to financial independence may not always be smooth – but with strategic planning and dedication, you can reach the finish line.

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Step 1: Identify impediments that may keep you from making headway toward your goals.

It’s easy to let small obstacles derail your quest to financial independence, especially as you make the transition into adulthood. But overcoming those challenges is critical to your success.

For most, becoming financially independent is all about being able to live on less than you earn. This means a combination of regular savings, debt repayment and smart investments. Start by focusing on your budget. Examine a year’s worth of credit card and bank statements to get a sense of where your after-tax money is going each month. Then begin tracking your cash spending to see where you can make cuts.

Step 2: Set aside a portion of your income for savings and debt repayment.

Whether you want to retire early like FIRE (Financial Independence, Retire Early) devotees or simply work smarter, the key is to save a percentage of your income and invest wisely. And don’t forget to build an emergency fund to help you withstand life’s unexpected storms. You can also boost your income by pursuing a side hustle or picking up extra shifts at work to accelerate your savings.