10 tips for your financial independence

Recently I was chatting with a friend who spoke of how much they relied on their spouse to provide financial security for their family.   

However, since becoming divorced, they were barely living above the poverty line.

Financial planner and TV host Suze Orman made an impacting statement recently.  She said: “Our problems with money are manifestations of problems in our life and relationships. 

“Work on the money issues and many of the other problems will take care of themselves”.  

I don’t think that this statement could not be said any better.  Regardless of whether you are a man or a woman, a lot of issues develop from money. 

What you need to do is examine what drives you emotionally when it comes to money and figure out the stumbling blocks that keep you from becoming financially independent. 

Here are a few points about how to arrive at financial independence:

1. Don’t rely on someone else for your financial security. Educate yourself about money management and investing. 

2. Set financial goals — it’s the key to financial success. 

3. Don’t use money to make yourself feel good. Instead, do things that promote self-respect and creativity.

4. Spend less than you earn – it’s the easiest way to create wealth. 

5. Get an education. People who finish high school and go on to get a tertiary education make on average significantly more money than those who don’t.

6. Build an emergency fund. Without one, losing your job or incurring a large unexpected bill could force you to take on heavy credit card debt which could put you into a financial hole that will be difficult, if not impossible, to dig your way out of.

7. Be involved. The day-to-day management of your family’s finances should be a joint effort with your spouse. Both partners should at least talk about money.

8. Don’t take on your spouse’s debt when you marry. Wait until you’re both out of debt before tying the knot or protect yourself with a formal agreement. Yes, it may seem a little harsh but you need to be rational.

9. You have to take chances. Don’t let the fear of losing money stop you from investing.

10. Acknowledge previous mistakes you’ve made with your money. Remember, no one is perfect.  Instead learn from those mistakes and avoid old habits.

Amassing wealth and becoming financially independent is a slow process that takes time.  Do small things every day such as cutting your expenses, generating extra income and putting the money into savings and finally making a little extra payment monthly into your pension. Over time you will see growth and as each new investment opportunity appears, you can respond on a larger scale than you did with your previous investments. 

Financial independence starts with you; it should have nothing to do with your spouse or dreams of receiving a family inheritance. Financial independence is created from working hard, saving diligently, spending wisely and making sound investment choices.

How do you know when you are truly financially independent? When you have complete control over how you spend your day and how your finances are being managed. 

You work because you want to not because you need to.

Carla Seely is a senior wealth Manager at AFL Investments.  She may be reached at 294-5712 or [email protected]