This I-Day start your journey towards financial independence

Financial independence or financial freedom is one of those things which everyone, directly or indirectly, desires to attain. Financial independence is nothing but independence from the money worries, independence from those cruel EMIs, independence from those sleepless nights worrying about money. Here are some of the things that you may start with.

Prepare a budget
If you are not already maintaining a budget, start at the earliest as this will help you to understand how much you require in terms of necessary and discretionary spending. You can figure out how much you can afford to spend on items which you actually don’t need. Having this clarity would help you to save that money and use it for more productive purposes. Budget is also the first step towards being a disciplined investor.

Have emergency fund
Having an emergency fund would help you to reduce your dependence on debt and pre-mature withdrawal from the assets that you have dedicated towards your financial goals. An emergency fund would help you in case of temporary loss of income or any such last-minute emergency such as medical emergency without letting you touch the funds saved for other financial needs.

Manage your risk
Risk management is as important as having an emergency fund in place. Insurance is an avenue available which help you to manage various kinds of risk such as life, health, critical illness, personal accident, vehicle, property, etc. Having these insurances in place will help you and your family to be safe financially. Managing risk with the help of insurance would let your other investments grow which you have allocated towards your financial needs. Having an emergency fund and being fully insured is something which you should think of even before you start to invest for your financial goals. The reason for the same is that emergency fund and insurance protects you financially for any unforeseen situations which usually comes without invitation.

Plan your retirement
While prioritising financial goals, people usually give medium to even low priority to retirement. However, retirement is something which should be your high priority goal. There are various avenues such as scholarships and education loans to fund for your child’s education. But there are no such avenues to completely fund your retirement. Some argue you have EPF (Employee Provident Fund), NPS (National Pension System), superannuation, etc. for retirement. However, whether they are sufficient or not, needs to be evaluated. It is to be understood that the lifestyle that you may wish to carry in retirement years can be completely different than that you follow at present. So, to attain complete financial independence it is important to plan your retirement.