Financial independence is the foundation on which a healthy and stable life is built. It is the goal for any woman trying to create a safe and secure life for herself and her family. At Women4Women, we work every day to empower women to achieve financial independence, so we know firsthand how critical it is to have the freedom to make your own choices. Here are our top five tips for achieving financial independence:
- Decide what financial independence means for you.
Every woman will have a different definition of financial independence. For some, it will mean not having to lean on others to meet needs. For others, it means having enough to move through struggle to a place of comfort. If you know what financial independence means for you, you can develop a clear plan that supports the lifestyle you envision for yourself on concrete terms, not just lofty goals that feel impossible to meet.
- Build a plan.
A good financial plan connects your resources to your goals and helps you prepare for unexpected milestones and transitions. To do this, start by making a list of your goals. Goals can include anything you’d like to accomplish that requires money to do so. Then, create a simple budget by writing down your monthly expenses and your monthly income. Then subtract your expenses from your income. The number you get should be more than zero. If it isn’t, you are spending more money than you are making, so it’s important to reduce your expenses.
Once you have a budget and your goals down on paper, you can connect each goal back to your budget, making sure you have the resources to achieve them all. If you don’t yet, that’s ok! That just means you can work towards that goal in the future.
- Practice daily financial discipline.
Becoming disciplined in how you spend money is important because it empowers you to take charge of your financial future and build stability. Small changes to how you spend money can have a big impact over time. Spending just a few minutes each day to review your accounts or plan for upcoming expenses can help you prevent overspending. When thinking about how you spend your money, consider these tips:
- Make conscious choices that reflect your goals;
- Plan meals ahead of time and grocery shop with a list;
- Pay with a debit card or cash to avoid building debt;
- Set small daily savings amounts such as $5 and gradually increase the amount; and
- Only buy what you can afford today.
- Invest in yourself and build your knowledge.
Investing in yourself and your financial awareness is one of the best decisions you can make to move towards financial freedom. Learning how to budget better, exploring new career skills or building an understanding of investing can help lead to better financial decision-making and higher confidence. Financial knowledge is power!
- Don’t be afraid to make adjustments.
Life is full of unexpected twists and turns, and it’s important to be flexible with your plan. Adapting to change is a strength, and we all know how quickly life can change. Being flexible with your budget, re-evaluating your goals and making adjustments along the way builds resilience and adaptability – two of our greatest superpowers.
As women, we face unique challenges – the gender pay gap, caregiving responsibilities, and adding on the complexities of trauma and PTSD, we carry a lot with us every day. Becoming financially independent can empower us to move beyond our trauma and build the life we deserve, one small step at a time.
Reaching financial stability takes time. It also sometimes requires professional advice. While Women4Women does NOT provide any financial guidance, we sometimes partner with financial institutions to provide personal finance workshops and can look for financial advice to support your needs. If you need help navigating a plan, reach out to us at info@women4womenbk.org.
Source: peachstatefcu.org
