India has been independent for about 75 years, but are Indians still financially independent? Well, different people interpret financial freedom differently. For some, that may mean the freedom to buy what they want, when they want. For others, it may mean not having to worry about paying sudden bills and expenses. Some may see it as debt stress reduction through better management, while others may be looking for enough money to retire early. While most of these interpretations are correct in their own way, most of them are halfway.
UNDERSTANDING FINANCIAL FREEDOM
Simply put, financial independence means having enough disposable income to live the life you want without worrying about paying bills, paying checks, and dealing with unexpected expenses. Instead of having a lot of money and being rich, financial freedom means being in control of your finances both now and in the future. Some of the components of financial independence include the following:
What are your financial goals? It could be better credit management, expanding your business, planning your dream vacation, planning your dream wedding, or retiring early. Make sure you set SMART goals, which means they should be:
T: limited in time
Once you achieve these goals, you will achieve financial freedom.
Another crucial step in becoming financially independent is keeping track of your expenses. Categorize your spending to be more responsible and uncover unnecessary spending like impulse purchases. Controlling these expenses puts you in control of your finances and puts you on the path to financial independence.
Paying yourself first means saving a certain amount of money in your savings account and investing in lucrative places before paying rent, bills, EMI, and other voluntary expenses. Such behavior forces you to save while limiting your spending. For example, if the money you have left over after saving and investing is not enough to cover your expenses, you should reduce your expenses or increase your income. People who pay themselves first are closer to financial freedom.
Debt is unavoidable nowadays as it helps to achieve many goals in life. However, if you manage them better and stay in control, you will gain financial independence in many ways. If you manage multiple loans, consider combining them into a single personal loan and make your payment more manageable and affordable. With better management and regular payments, your credit will improve, you’ll have more money for the future, and a huge burden will be lifted from your shoulders.
For most people, a typical 9 to 5 job may not be enough to reach their financial goals. If possible, look for sources of income above and beyond your monthly salary. In addition to active income, where you exchange your time for money, you can also look for passive income, where you work once and continue to earn money automatically. These sources of income include stock investing, affiliate marketing, ebook sales, and more.
If you’re a small business owner looking to expand and grow, a business loan can help you meet your financial goals. You get a sense of financial freedom when you can buy your inventory, build working capital, upgrade your equipment, expand your workplace, or add a new product or service line to your business without having to worry about finances. .
Start investing as soon as possible and increase each year as your income increases. Balance your equity and non-equity assets and monitor your risk tolerance. Review your investment portfolio annually and rebalance it as needed.
You will not achieve financial independence if you choose a lender that does not offer you the necessary funds at the right time according to your expectations. You can search online and find a lender that offers a sufficient loan amount to meet your financial needs. In addition to the loan amount and interest rate, there are several other factors to consider when choosing a lender, including repayment period, eligibility requirements, documentation requirements, collateral, customer service, etc.
The various steps above can help you achieve your financial goals and give you financial freedom this Independence Day. The more diligently you follow these steps, the sooner you will achieve financial independence.