How to Achieve Financial Independence

How to Achieve Financial Independence

As humans, we are social creatures, and we need each other for friendship, love, and companionship. But we should try not to rely on others for survival. 

While it is okay to ask for help when you need it, you should do your best to make sure that you have tried to prepare for things yourself as well. Financial independence is so important because it means that you have the ability to lead your life on your own. It gives you the freedom and the power to lead your life the way you want, and to make the decisions you feel are best for you. 

To achieve financial independence, you need:

1. A Steady Source of Income You Earn - whether this is from a job or from a place you rent out, this has to be something you earn. This does not include money you get from a parent or a partner. If you currently rely on someone else for an income, try to get a part time job and make some money for yourself. Give tuition, bake cakes, make dresses,...do whatever you are good at.

2. Even if you cannot work now, prepare for the possibility that you will one day have to - It is understandable that it might not be possible for everyone to work and earn their own income. Maybe you have other responsibilities that take up your time. If you cannot work out a way to make some time for a part-time gig either, you can still take your allowance and start saving some of it in your own bank account. Also continue upgrading your skill set so that if you ever do need to get a job, you can get a job more easily. This could be by studying something or by practicing a craft. You can now study up to your first degree for free in Maldives, and there are many courses which have flexible timings as well. 

3. A Bank Account in Your Own Name - this needs to be one that you handle yourself. You need to have the card, the details, the passwords. Do not share these details with anyone else. 

4. The knowledge needed to handle your own finances - the good thing is that even if you do not feel confident handling your money yet, you can always learn. Do not rely on others to take care of your finances simply because it seems easier. Of course, ideally they will always be there to help you, and they are handling it properly, but if the day comes that they are unable to do it, you should feel confident handling them yourself.
You can get financial knowledge by simply reading more personal finance articles (like you are right now!) You can also ask your family, friends, or even your bank for more information. They will be more than happy to help.

5. If someone else handles your money now, you need to have a conversation with them and establish that you need to handle finances separately. They will probably be happy you are taking an interest in it yourself. But if for some reason you cannot do this, try to keep track of things yourself as well anyway. Check your account statements, record your income and expenses even if they already do it for you. Then if there are any differences, try to discuss them. If they think that you are not ready to handle your finances on your own, prove them wrong. Start small, but at least get started.

6. Create an Emergency Fund. If you want to be financially independent, you have to make sure that you also prepare for any sudden shocks that may affect your usual spending and saving plans. By having some money saved up for you to dip into to when something comes up, you are creating a safety cushion for you to land on when things get tough, without having to rely on someone else.