Financial Strategies: Here Are 3 Simple Steps to Achieve Financial Independence by Pamela Yellen
What does it mean to be financially independent? It means having a financial strategy that allows you handle whatever challenges life throws at you. Here are three steps to help achieve it:
- Build a Sizable Liquid Rainy Day Fund: To have the security of a real safety net, why not build a fund equal to at least two years of your income? Put that money in a place that is safe and liquid, so you can easily get your hands on it when the proverbial you-know-what hits the fan. Does it seem impossible? You probably won't build this fund overnight. But if you increase your savings by even just 1 or 2 percent each year, you won't feel the pinch, and you'll be surprised by how quickly your rainy day fund will grow.
- Convene a Family Council: Create your family's "Personal Spending Rules" together to work toward family goals and help you make spending decisions today that build happiness for you now and in the future. Your children will not only learn good financial skills through this process but they'll take pride in being part of it.
- Do You Need It or Just Want It? Before each purchase, get yourself off emotional autopilot. Take a deep breath (and a couple of days) to consider whether you really need whatever you are thinking about buying.
Financial stress seems to have become the new normal for most of us, but it's not inevitable. You don't have to panic about your present or agonize about the what-ifs in the future. You can achieve financial peace of mind so you can weather whatever curve balls life throws at you.
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