Five Habits You Need to Embrace to Become Financially Independent

american dream

What’s your biggest goal in life? I mean, really; your biggest goal. The dream you want to come true more than anything else. I’m not talking about finally getting your toddler 100% potty trained or stopping your husband from leaving the toilet seat up (admirable as those goals might be). I’m talking your big goals; your financial goals. What do you want in terms of your finances? I know some of you might be wondering why I’m even asking, since all people want to be wealthy with more money than they might ever imagine at their disposal, but that’s not true. While wealth is what many people aim for, some people just want simple comforts such as enough money in the bank to pay their expenses and eat. More is not necessary.

Whatever your financial goals, there is not a chance you will ever achieve them if you do not first establish financially independent. What does that mean, exactly? It means you are financially secure enough to no longer have to work for a living. It means you are able to live comfortably with the net worth you’ve amassed in whatever form that might be. It means that you are no longer reliant on anyone but yourself to make your life worth living. And that, my friends, is a seriously amazing financial goal. It’s time to make it happen. Let’s get started; because you’re not going to make this happen without embracing these simple habits.

Apply the old adage, “Save early and often,”

Here’s the deal; saving is a great habit to form. It might not seem so easy at first, but once it becomes a habit it will be one that is hard to break. Start small if that’s what you can afford, and work your way up. The rule with saving is that more is better, but something is better than nothing. If, at this point in your life, you can only afford to save $500 per month, do it. If you can only afford $100 a month in savings, put it there. Add to it as you can and watch that grow. Not only will the account grow with each deposit, but you’ll earn interest on this money. Make it a habit to save a certain percentage of everything that you earn, whether it’s 50% or 1%. Just save, and do it now.

Pay yourself first

Here is a piece of financial advice my father gave me when I was a child. He instilled this in my brother and me as if it was a life rule – which it very well should be. The point here is that you need to pay yourself first. What does this mean? It means, consider yourself a monthly expense. You have to consider you the same way you’d consider your mortgage or a car note; important. You will not skip payments on those things each month in order to buy a new pair of shoes, so why skip paying yourself? You’re important, too.

Kick pointless purchases out the window

One of my best friends and her husband (my husband’s best friend) is a very successful millionaire. They own several businesses and make wonderful life choices, and they have every bit of success to show for it. And while they enjoy their money and do spend it on things that they want, she is pretty frugal. When out shopping for new yoga gear one time, I picked up a pair of overly expensive yoga pants made by a famous brand and she said, “You could go to TJ Maxx and get the same pants made by a lesser known designer and buy 4 of them for the price you’re paying for that one pair right now,” and it really made me think. Sometimes you have to put the pointless out the window. Is it really important to spend more on a label than it is so save? For some of my purchases, yes, it is. I prefer high-quality handbags and shoes, but she was right on with the yoga pants. Say goodbye to the pointless purchases you make and let that become a habit. You’ll save so much more money than you thought possible. It’s a great financial habit.

Pay off your mortgage

What gets me about this one is that so many people feel that this is impossible. They feel as if it’s not possible to pay off a mortgage for several reasons. The first being that a house is very likely the most expensive purchase you will ever make, and you have 30 years to pay it off. The second is that it’s not considered ‘bad’ debt. Well, I consider all debt bad debt, so let’s start over. Pay off your mortgage. Do it however you see fit. If you have a moderately priced $200,000 mortgage and you earn $100,000 per year, you could legitimately lessen your expenses to the point of ridiculous and apply everything else you make for three or four years to your mortgage and have it paid off in no time at all. It’s not as difficult as you might think. Sure, it will require some sacrifice on your part for a few years, but imagine what it will do to you in the long run.

Prioritize your life

This is a key habit to create in your life. At some point you will come to realize that keeping up with the Jones’ or spending too much money on things you don’t really need is just pointless. Don’t let this realization come too late to make some changes. My husband and I realized a few years ago that while we love driving brand new luxury cars every year, we also hated paying over a thousand dollars a month in car payments. So we made the decision to save and start buying cars with cash. We still like to drive luxury vehicles, but we now buy them a few years used and drive them longer. This allows us to still have what we want without the depreciation and without the overpriced payments. It’s been nice. It’s just one way in which we have prioritized our life so that we can live as financially independent as we please.

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