24 Strategies To Achieve Financial Independence Sooner

Financial independence looks different for everyone. For younger folks just starting on the path to adulthood, it might mean moving out of your parent's place, while for older folks, it might look like retiring early. Whatever financial independence is for you, there are some foolproof ways to navigate your money matters.

1. Set Financial Targets 

Financial independence doesn’t occur accidentally. Instead, you need to set financial goals. You want these goals to be specific, measurable, achievable, and time-bound. Remember to write them down and revisit them regularly so you never lose sight of the bigger picture. 

2. Make a Budget

A budget can make or break your financial freedom. No one likes that dazed feeling when their paycheck vanishes into thin air before their eyes. However, by giving purpose to each dollar in your account, all your money is accounted for. It will help you control overspending and prioritize your expenses. 

3. Make Debt Payments

If you have any looming debts, they should be your first target when moving towards financial independence. Interests on debt payments are painfully high, so you need a strategy to pay them off quickly and effectively. However, don’t do it at the expense of your savings and emergency funds.

4. Build a Retirement Fund

Regardless of your life stage, a retirement fund should be part of your journey to financial independence. Investopedia advises that if you are under 50, you should make maximum contributions to a 401(k) or Roth IRA. 

5. Focus on Savings

You can start small and build your way up. Even rich folks use coupons and go to sales because it’s wise to maximize all opportunities for saving up. Saving up can be as simple as buying generic groceries instead of branded ones or cutting down on useless subscription services.

6. Have an Emergency Fund

Emergencies are an unavoidable fact of life, no matter your age. Hence, building an emergency fund is far more critical than making investments or big purchases. You can focus on the other expenses once you have a sizable emergency fund as a safety net. 

7. Build Financial Literacy

Without financial literacy and an understanding of key financial terms, you’ll likely make bad decisions or ignore obvious red flags hidden in the fine print. By consulting online resources, you can become acquainted with standard terms and techniques to facilitate better decision-making. 

8. Define Your Career Trajectory

Future planning is imperative to achieving financial independence. Your career and paycheck can go a long way in your monetary journey. 

Once you have your goals laid out, ask yourself if your current position aligns with the end you want. Is there potential for income-earning? Are there opportunities to move up and grow personally, professionally, and financially? 

9. Plan Out Big Purchases

You’d consider buying a house or a car at some point; why not plan for it immediately? Say, you’d create an entry in your monthly budget for a new laptop. Then, divide the cost of the gadget by the months you have to save. This way, you can ensure you are slowly but steadily contributing to your big purchases. 

10. Go Low

Always live below your means. While this doesn’t mean you can’t have nice things, keeping the “wants” separate from the “needs” is always helpful. Overspending can only fuel financial dependency, and you want to steer clear of such a cycle by making mindful purchases. 

11. Make Mortgage Payment on Time

Make mortgage payments as early as possible to check off this big purchase from your list. Time recommends spending up to 28% of your gross income on housing. Following this rule, If your monthly income is around $10,000, your mortgage payments should be no more than $2,800.

12. Take Care of Your Credit

You should never mess with your credit because your score can gauge your ability to repay future loans. Ensure you aren’t using your credit instead of budgeting or buying necessities. 

13. Have Multiple Income Streams

Don’t put your eggs in one basket. In this case, relying on your day job to do all the heavy lifting might not be ideal. There are countless side hustles you can opt for that will align with your schedule and skillset, granting you the ability to generate more income to meet financial targets. 

14. Keep Your Documents Handy

Organization is imperative to financial freedom. Sort all your financial documents and contracts, whether digitally or by hand, so they are readily available and accessible should the need arise.

15. Live a Balanced Life

While this is a lifestyle tip, it is more financially relevant than you think. When you prioritize your health and well-being, you are saving yourself from racking up hospital bills and doctor visits that can break your bank. The last thing you want is your health coming in the way of your financial freedom.

16. Check Your Insurance Options

Neglecting your insurance is the last you want to do when seeking financial independence. You want to consider four types of insurance options at all costs: life insurance, auto insurance, long-term disability insurance, and health insurance. 

17. Stay on Track

Financial independence requires one to be well-acquainted with their spending habits. This means building a tracking system to make note of your spending. Before setting big financial targets, it is helpful to track your expenses for at least a month and see where you’re overspending. 

18. Automate Your Savings

To make consistent contributions to your savings, automate the process. Talk to the bank or your employer to transfer a set amount from your salary into your savings account each month.

19. Opt for High Yield Savings

Make the most out of your savings by option for a high-yield savings account. Investopedia recommends hunting for accounts with the highest interest rates and lowest fees. Explore and make comparisons between the initial deposit and minimum balance requirements. 

20. Seek Financial Advice

There’s no shame in seeking professional help to make better choices. Getting the aid of a financial advisor can help you understand your best investment options and uncover strategies for debt repayments. While online resources come in handy, nothing beats financial advice tailored to your needs.

21. Try the 50/30/20 Rule

The 50/30/20 Rule can serve as a guide for budgeting. To achieve financial stability, it suggests splitting your income into three chunks: 50% for needs such as rent and utilities, 30% for wants like personal care and entertainment, and 20% for savings and debt.

22. Take Care of Your Property

Financial independence goes beyond managing the cash flow; it also comes down to your habits and lifestyle. Taking care of the things you own, such as your expensive devices or cars, is a practice that will save you from racking up bills in the future and spending that earmarked money on fulfilling more significant financial goals.

23. Opt For Sustainable Living

In line with taking care of the things you own, having a mindful and sustainable lifestyle can be fruitful for your bank balance. Small changes can make all the difference: making home-cooked meals instead of eating out, investing in long-lasting products instead of cheap, disposable ones, or thrifting and purchasing second-hand items when possible. 

24. See What Works for You

Lastly, it’s crucial to note that financial advice is not one size fits all. There are many ways to achieve financial independence, and not all rules or tips work for everyone. Instead, understand your goals and problems and experiment with different techniques to determine what works best for you.