As a young employee who is fresh to the workforce, you have to start thinking ahead. Being financially autonomous is key in life, especially as a young person at the beginning of their career. Having your own financial autonomy means you get to make the choices. Where do you want to live? What kind of lifestyle do you want to live? If you are not financially tied to someone, the decisions will be yours to make, but also yours to be responsible for. It will grant you a freedom of choice, and you will need to be accountable for it to work.
It may seem hazy and unreachable, but financial independence is actually attainable if you just follow some simple life-guides and principles. Here is some advice of our own to help you on your self-sufficient journey!
1. Assess your financial situation objectively and start from there.
You will need to know what you are starting with. How much do you spend in a daily, weekly or monthly basis? What is taking up most of your income? Sort your spending into categories (like food, entertainment, house and healthcare, shopping, etc.). Then decide where do you want to save money and how much of your budget you are willing to allocate for each category to reach a clear financial plan. You can even download apps that will help you keep track of your income and the state of your budget. You will see that with clear limits and objectives in mind, saving becomes much easier and your budget will seem far more manageable.
2. Spend less than you earn.
This may seem like an obvious thing to do, but for someone who is working on being financially independent, income limits may still be a difficult thing to grasp. Saving money with every paycheck is the best way of reaching a comfortable financial autonomy. With your financial plan in mind, put a certain amount of money aside at the beginning of every month. If the amount is considerable, it may be advisable to put it in a savings account at the bank, as it is safer and you will be able to benefit from interest rates. Saving this way will allow you to accumulate money over time and end up with a substantial amount aside.
3. Spend wisely and think about your needs.
When you start to make money of your own, it will be very tempting to buy based on trends and wants, but always keep in mind these two questions: Do I really need this? And can I afford this with my current budget? If the answer is no, then save your money. Be selective about what you invest in and plan your budget in advance, because there is a right time to spend money. You will find that impulsive buying doesn’t leave you as satisfied and confident in your choices as a rational and planned purchase does. Small sacrifices can help you reach bigger and better results.
4. Become financially literate.
Financial literacy goes beyond having the necessary skills to manage your financial resources properly. Educating yourself about loans, credits cards, debit cards, interest rates and other terms related to the banking system is essential for someone trying to find their financial footing. Your understanding of these things will really help you make the most out of your money. It’s important, for example, to know when you should pay your credit card installments to avoid extra interest rates and being over charged, or to understand the differences between loan options before you decide on one. Get learning!
5. Be flexible.
Things can change really fast, and you might find yourself in a position where you’re not as financially capable as you were before. It’s normal, some periods are going to be more challenging than others, but the key is sticking to your ground. Be flexible, find part-time jobs if you need to, or maybe do some freelance work. Give yourself the tools you need to keep on going forward. Be more creative in the ways you get your finances and learn to be resourceful. These skills will always come in handy.
6. Invest in yourself.
At the end of the day, you are your most important investment. Before investing in anything else, you should invest in yourself. This can be done in many ways, but most importantly through investing time and effort in advancing your skills and knowledge. Improving yourself increases your value in the labor force market and can help you lead a successful career. Keep trying to better yourself and your career, it’s the main road to financial autonomy.