The turn of the New Year is just around the corner, and it is usually accompanied by a host of New Year’s resolutions. Unfortunately, many of these intentions don’t make it past February. However, if financial stability is on your resolution list, it’s an ambition too significant to overlook. Striving for financial independence ensures a comfortable future, here are three tips to help you grasp this in the forthcoming year.
EVALUATE YOUR DEBT
Firstly, generate a comprehensive record of your debts using a spreadsheet or similar tool. Incorporate the details of your creditors, the exact sum you owe, your monthly repayment schedule, and the due date. If producing this list appears daunting, consider using your credit report to verify your debts. Creating a single file with all your debts and totals, will provide you with a clear perspective of your financial liabilities, better enabling you to manage them.
But don’t just craft this list and disregard it. Regularly update it as you make payments, giving you a rewarding sense of achievement as you systematically reduce your debts. This feeling of accomplishment can boost your determination to continue whittling away at your liabilities.
LOOK INTO AUTOMATIC PAYMENTS
Now that you’ve established what you owe, it’s time to figure out how to manage your repayments. A practical solution is setting up automatic deductions from your salary. If this isn’t feasible, ensure your debts take priority over other expenses. It’s easy to indulge in some well-deserved treats when you see your account balance, be it a night out or a spa day.
But, if you prioritize your debt repayments, you’re forced to budget with the remaining funds. After accounting for essential expenses like groceries, rent, and utilities; any extra income should ideally be funneled towards your debt. Stay committed and aim to allocate at least 80% of your spare income towards repaying your debts each month.
SECURE YOUR FINANCIAL RECORDS
For anyone, especially business owners and investors; financial security is of utmost importance. Every company thrives on financial stability and confidential handling of significant information like employee details, financial reports, the capitalization table, and other sensitive documents. Many leading organizations secure their data with virtual data rooms, an online system for storing and distributing proprietary information. This technology provides access to verified individuals or organizations only, ensuring confidentiality and safeguarding your transactions.
EXPLORE ADDITIONAL INCOME OPTIONS
A crucial aspect of financial stability is identifying additional income sources. Many individuals disregard this strategy, convinced their day job is enough to ensure their financial well-being. However, with the increasing cost of living and education, as well as rising housing prices, debts are on an upward climb, making an additional revenue needed for financial independence.
But don’t worry, this doesn’t signify working around the clock. Side gigs such as proofreading college assignments, tutoring music classes, or anything you have a knack for can add to your income. Business consulting has emerged as a popular choice among millennials, due to countless niches waiting to be served and opportunities to earn higher.
Consulting coach, Sam Ovens, has aided thousands to set-up consultancy firms, many reaching a six-figure income. So don’t shy away from potentially transforming your side hustle into your primary income generator.
By managing your spending, diligently paying off debt and creating an auxiliary income flow, financial independence by the end of 2018 is a realistic goal.
