Financial independence can take a lifetime to establish, and with a few wrong decisions, can be lost in an instant. No matter how prepared we are, there are some things that life throws at us that we can’t avoid. And while personal in nature, some issues can also negatively affect our finances.
have a plan for your money
It doesn’t matter if you’re making $18,000 a year or $180,000, how you manage your money will determine your ability to be financially independent. Be sure that you are a good steward.
- Track your spending
- Payoff debt – aggressively and strategically
- Always have an emergency fund
- Invest… in something (no matter how small the amount)
tip: don’t be like average people who get a raise, and increase your lifestyle to match your paycheck with every extra dollar. You’ll never get ahead! Instead, make the additional funds work for you.
prepare for the unexpected
Whether it’s an unexpected layoff or a personal emergency, your financial preparedness can be the difference between maintaining stability and financial ruin. For example, if you’re unexpectedly involved in a car accident you may have medical bills to pay and have to take unpaid time off work, both of which would affect your financial health. If your first thought is to hire a truck accident lawyer, you may want to rethink how prepared you are for the unexpected.
Be sure that you’re building an emergency fund that can cover 3-6 months of your personal expenses. Then, create additional streams of income that you can also put away to further your financial security! Then, evaluate your insurance coverage with your employer… if short-term and long-term disability insurance is available to you, enroll. If something you never thought would happen does happen, you’ll be prepared to maintain your financial independence.