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5 Sure Fire Ways Of Becoming Financially Independent in 2021

Everyone loves the idea of becoming financially independent, especially in this day and age. Who wouldn’t want to have the luxury of not worrying about how to pay your day-to-day bills and have some money left over to enjoy. That would be a nice place to be. 

However, the rise of coronavirus has seen the unfortunate downfall of many businesses. That means many people have been left out of work and financially devastated. For some, it seems like there may be no way back from their situation. 

However, even in times like these, financial freedom isn’t as far out of reach as you might think. While it’s not an overnight process, you can set yourself on track to achieving exactly that!

Not sure where to start? Here are some basic ways you can move towards being financially independent in 2021.

Save in an Emergency Fund

Having an emergency fund is the foundation for anyone seeking financial freedom. If you don’t have one in place, you will always go into debt to fund life’s emergencies. And if you are always in debt, you won’t have enough money to invest (see below).

Creating an emergency fund isn’t as difficult as it sounds. Start with something basic, like $1,000 in a savings account at a local bank. Over time increase that to 3-6 months of total expenses. Once you have that much, you’ll be set if any big emergencies come your way. And you can move on to other steps, like investing, that will help bring financial freedom.

Related Content: Emergency Fund Basics: The Step on Which All Other Success is Built

Create and Stick to a Budget

If saving is the first step, creating and sticking to a budget is the second step. Nothing moves a person closer to financial freedom than controlling their spending. A budget helps you do that.

It will take you 3-6 months to really get good at budgeting. The process will be worth it. Again, once you have your spending under control, you will be able to put money into other things that can increase your chances of becoming financially independent.

Related Content: The Ultimate Guide on How to Make the Best Monthly Budget

Go Back to School

This may not be one you have thought of but is critical nonetheless. Most high-paying jobs require some level of qualifications. The more skills you have, the likelier you are of landing a well paid job that will help you save money on the road to becoming financially independent.

School isn’t for everybody. One of the main reasons for many people avoiding heading to university to further their career is often the anxiety and fear that comes with it. You aren’t sure it will be worth it or that you will be able to handle it. What about all your other responsibilities, like your full-time job and family matters? How can you create time in your life to do school? 

These are very real concerns. But many people have taken this route and been successful. So consider going back to school to get that qualification that could set you apart from other applicants in your dream job.

Invest Wisely

Once you have an emergency fund saved and are rocking it with your budget, you can start investing. There are many forms of investing people can pursue. The most widely used is investing in the stock market.  But other forms of investing can work as well, such as buying a home, rental properties, collectibles and cryptocurrencies.

Investing in Cryptocurrency

Cryptocurrency (or sometimes crypto, for short) is still fairly new on the scene. Many people find it difficult to grasp the concept of how it works. However, there’s a lot of money to be made in cryptocurrency if you allow yourself the time to understand its function, and how you can make money from it.

There are many reasons to invest in crypto such as not having to give any personal information out to third parties, which many people are often cautious about doing. If you’re looking for an interesting way to make money that could help to set yourself on the path for financial independence, crypto might be another alternative for you. 

Maintain a Good Credit Score

Many people tune out when they hear about credit scores or reports. Howver, they are actually really beneficial to your financial health.

Put simply, your credit score is a record of all of your financial decisions and how well you have paid off debt. It allows lenders to decide whether or not to “trust” you with their money if you’re trying to take out a credit card or loan of some sort.

Therefore, improving your spending habits by paying bills on time, and sometimes even smaller actions like registering yourself on the electoral roll, can improve your credit score. The higher your credit score, the more access you have to resources which could help you gain financial independence.

These five methods will help you regain control over your finances, and begin to think about putting money in safe places, whether that be through saving or investing, so that you can put yourself on track and work your way towards financial freedom.

Related Content: 3 Tips to Boost Your Credit Score Before Getting a Loan

Leave a Comment or Answer a Question Below: Do you consider yourself financially independent? If so, how did you get there? What steps did you take? What was the worst financial decision you made that set you back on your journey? 

Photo by Joslyn Pickens from Pexels

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