Financial independence is something that can be attained by everyone – but it doesn’t just happen out of the blue. To become an expert at building your financial foundation, you need to be willing to make the time and take the effort to make it happen. If you are up for that challenge, here are some actionable tips you should use to get yourself on a stable and independent financial track. 1. Clearly Define Your Goals What financial independence looks like for one person is different from what it means to another. It can be defined in terms of assets for some, plans set in motion for others, or unique metrics for another group of people. You need to reach a point where you can define what financial independence means to you – then you can start working towards it. The best way to achieve any big goal is to set a couple of short-term goals to go in line with the long-term ones. For example, if you were looking to purchase an asset (long-term goal), consider setting milestones such as inquiring about said asset, making a first deposit, and opening an account that holds the funds meant for this purpose (short-term goals). This is a great way to keep in track with everything and keep your motivation alive. 2. Spend Less, Save More It’s a no-brainer that spending less than you earn is great advice. We don’t see a way you can possibly become financially independent if you spend more than your income allows for – unless financial independence to you means racking up a ton of debt and living payment to payment (Pro Tip: This isn’t financial independence. It’s financial suicide.) Take a look at the luxury expenses you have been indulging in and do away with them. This includes your daily Starbucks, eating out more than once or twice a week, or treating yourself to shopping trips more often than you should. This does not mean you can’t treat yourself to something nice every once in a while. Instead, what it means is that you should not treat yourself to all those niceties all the time, especially when they are at the expense of your daily financial goals. 3. Forget your flashy neighbors. They’re broke. One thing that makes people live beyond their means is wanting to “keep up with the Joneses”. The fact that your neighbor just renovated their house or bought a new car does not mean you should too. You don’t know how much your neighbor could be raking in, or how deep in debts they are. Those are the two extremes that people fail to consider in these instances. Keep what you earn after covering your basic needs. If you want to make a big purchase, like a new car or home renovation, make sure it’s because an opportunity for such has created itself. Do you really need a new car or an extra room? You can expand your home if you feel the family needs more room, or a new member is coming in soon. Otherwise, leave things as they are and concentrate all that money (and effort) somewhere else. Remember: Spending money on a big purchase has a domino effect on your life. You’re more likely to make additional luxury purchases to maintain your image, and the time required to research and complete an expensive project can rob you of your financial goals. 4. Your Budget is the Cornerstone of Financial Independence It’s easy to decide to spend less and keep your purchases in check. Without a spending plan though, just how much spending will be considered too much? You need to establish a benchmark. Before your paycheck comes in, map out the major expenses for the month and leave room for miscellaneous spending. You’ll be surprised at how much you will have left on paper when you take this initiative. If it helps, you can download various apps that will help you track your spending. Track all your purchases for a month to know what you would normally spend on. Use that information to draw up a suitable spending plan for yourself. More than setting up the plan though, choose to adhere to it. 5. Save and Put the Power of Compound Interest to Work For You One of the quotes we like the most is: “Don’t save what is left after spending. Instead, spend what is left after saving.” When making your spending plan, factor in your savings goals. By saving each month, you will have something to fall back on in case of emergencies rather than having to reach out for a loan. Even if you are forced to get a loan, hardships are always made easier by having access to savings to help offset them. Having some money put away also brings with it peace of mind. Aside from financial peace of mind, a good savings portfolio keeps you prepared to buy into quality investments as soon as they pop up. 6. Invest Your Savings in Growth Opportunities As much as we will advise that you save, know that traditional savings accounts are regarded as the worst way to grow wealth. Better financial independence will be gotten from investing your money in a profitable venture. See this as a form of savings too. The upside is that it is the kind of savings which provides you with real returns on your money. One mistake some so-called investors make is investing into the markets when everything is going smoothly and then pulling money out when the markets hit a bump in the road. While we recommend playing within the whims of the market for short-term profit, long-term positions can be much more profitable. You need to stomach financial storms and recognize them as a potential buying opportunity. When other investors panic, you can purchase assets for far below market rate. Choose a niche you have a passion in/ Team up with an experienced investor. They’ll help you assess whether or not your chosen niche has the right reward-to-risk ratio. It’s always good advice to invest no more than you can afford to lose. This is not because your investment will definitely go bad. Much of the time, provided everything is handled professionally, you will come out on top. Sometimes, however, we will want to make sure you are guarded against the unexpected. And don’t forget to invest your time wisely as well. You might want to start freelance writing, or find another talent that could bring in side-income. 7. Get Started Early – Like Right Now! Becoming financially independent is a journey that requires you to start taking action as fast as you possibly can. Don’t wait till you get a better paying job to start making these decisions. Your waiting period is time that you won’t get back. Why not make use of it now? Start paying your bills as soon as they come and follow your plan to the letter early on into the month. You can even opt for services that allow you get paid early so you can do more with the extra time each month. All the steps above can be summarized into living within your means while leaving enough room for financial expansion when the chance comes. If you have other tested and proven methods of attaining financial independence that we did not mention in this list, please let us know in the comments.