Did you know that you can achieve financial independence as young as 26 years old? What in the world is financial independence, you ask? It’s a position in life where you have enough money to live the rest of your life without working or depending on others. It’s basically like retiring at a young age. Which sounds amazing, doesn’t it? But it’s a pretty far reach if you don’t know how to manage your money well. This is why Glitz is letting you in on all the useful financial wellness tips to achieve your financial independence.
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Useful Financial Wellness Tips To Achieve Financial Independence
1. Prepare A Monthly Budget
The feeling of finally spending your own money is incredibly satisfying. But it can also be dangerous if you don’t know how to control yourself. Thus, it is important that you prepare a monthly budget for yourself. This is especially crucial if you are someone who has commitments, like needing to pay for rent or your car. It may seem overwhelming at first, but segregating your money and putting a limit on how much you can spend will help in the long run. This is one of the few useful financial wellness tips to achieve financial independence.
2. Put Savings First
One of the best and useful financial wellness tips to achieve financial independence is to put your savings first. Every time you get your monthly pay, think firstly of your savings. Then put that money aside before focusing on other aspects that you want to spend on. In addition, it is good to get yourself used to this habit or routine of saving first. This will help stop you from spending on unnecessary things in your life.
3. Start Saving For Retirement Now
The sooner you start saving for your retirement, the sooner you will be able to retire. And we’re not asking you fully depend on your Employees Provident Fund. Start your own retirement fund by yourself and put money into it every month. You can add this to your savings plan, and try not to touch the money. If an emergency happens, try using your money from other accounts first. If and only if those aren’t enough to cover, you can use this to help. So if you’re looking to achieve financial independence, take notes of these useful financial wellness tips.
4. Never Depend On Credit
A lot of times people fall into debt due to credit. Some people get into the habit of spending money that they don’t have. While having credit cards can sometimes make you eligible for discounts and vouchers, you should never depend on them. So if you have a credit card, make sure you don’t overuse it and pay them on time. Set a monthly limit for yourself and do not exceed it. As for paying it on time, do this to avoid a higher interest rate in the future. Keep these useful financial wellness tips in mind if you want to achieve financial independence.
5. Track Your Spending
Here are some useful financial wellness tips to achieve financial independence – track your spending. Spending money can almost be like drinking water, they go very quickly. In addition, it is also easy to get lost when it comes to spending money. This is especially true if you enjoy going on shopping sprees. Therefore, it is vital that you track your spending by the month or even the week if you’d like. Keep hold of all the receipts you get whenever you spend money so that you can record them down. If physically recording them is too troublesome for you, there are many apps to help you keep track. Now it’s just up to you to get started.
6. Be Aware And Smart Online
Online scams and frauds are one unfortunate way that can damage your financial independence. Thus, it is important to be aware and smart about your online presence. Do not ever reveal information about your credit card, bank account logins, your CCV, and even your phone number. You should also be aware of any notifications about your cards or bank accounts. Lastly, instantly replace your cards if you happen to lose them. These are truly useful financial wellness tips to achieve financial independence.
7. Educate Yourself About Finance
One of the few useful financial wellness tips to achieve financial independence is actually knowing how to handle money. This is why it’s important that you educate yourself about finance. It can be scary, we know. But once you understand deeper about retirement plans, costs, interest rates, and credit, it will be easier to manage your finances. Being financially literate also helps you to make better decisions in terms of spending and saving.
8. Plan For Big Purchases
Thinking of buying a house, car, or even go for a holiday overseas? One of the useful financial wellness tips to achieve financial independence is to plan for big purchases. Big purchases like these can take a toll on your bank account. But not if you’re prepared for it. Remember point number 2? You can actually include these big purchases in your monthly savings plan and chip in money every month. This way, your big purchases wouldn’t feel much of a burden because you already have the proper amount saved.
9. The Must-Have Emergency Fund
Life is unpredictable and anything can happen at any time. Therefore, one of the useful financial wellness tips to achieve financial independence is to always have an emergency fund. This emergency fund should be something in your monthly budget and you should put money into it every month. And if you’re starting to get overwhelmed with so many funds, remember that it doesn’t have to be a huge amount of money. You can start at RM100 every month and increase whenever you get a raise, for example.
10. Save Every Extra Penny
Another useful financial wellness tips to achieve financial independence is to save your extra money. There may be months where your bank account runs dry (after segregating all your savings of course). But there are also months where your bank account may have a few extra hundred Ringgits left. Well, put them into one of your savings funds. You can opt to put it into your retirement fund, your emergency fund, or your big purchase fund. Choose whichever funds you feel could benefit from that extra money. We recommend the retirement fund so you’ll be able to retire early!
11. Start An Investment
You are never too young to start an investment. And these days, it’s hard to achieve financial independence if you don’t have a side investment. Thus, one of the useful financial wellness tips to achieve financial independence is to start an investment. Now, investments come in many forms and you may come across friends who are financial planners or investment advisers. Don’t try to avoid them, instead have a chat with them. Some can be pushy, we won’t deny this but others don’t force you to buy from them. Instead, they help you find the perfect investment for you – depending on your willingness to take a big risk or small. If you’re starting out, we recommend starting an investment with small risk. But it’s really completely up to you.
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