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Today’s guest post comes from Harper Reid, a New Zealand native who blogs over at Tumblr. In this post, she focuses on the action items someone should take in order to break away from financial dependence. If you’re looking to gain financial independence from your parents, this article is for you! Similarly, if your son or daughter needs a financial push, this article will lead them in the right direction. Enjoy!
For any young adult, becoming financially independent is a huge life step. It’s an incredibly rewarding and freeing feeling knowing that you no longer have to rely on your parents for money. However, reaching that point isn’t always a natural process – instead, requiring a lot of hard work, vigilance, and preparation – and sometimes things don’t go as planned. To help you reach financial independence smoothly and successfully, follow these tips:
Talk to Your Parents
Having an open discussion with your parents is the first step in growing out from their financial support. If you and your parents aren’t on the same page, things can get a bit tricky. After all, you want them to hold you accountable, instead of encouraging you to remain reliant on them.
Start off by telling your parents about your plans to break away from financial dependence. Even if you are still living at home, you can work hard to take on more financial responsibility in the household. Offer to pay your portion of the rent, or simply contribute to monthly expenses such as groceries, petrol, electricity, water rates and so on. This way, when you do eventually move out, you will be well prepared for the real world.
Image Source: Pixabay
Prepare for Financial Emergencies
Your independence is truly tested when an unexpected financial crisis hits. When you can take care of a crisis on your own without turning to your parents first, you’ll know you’ve achieved full financial independence.
For example, say your car headlights need fixing or the computer you use for studying needs urgent repairs. These types of situations happen all the time, and it’s always wise to be financially prepared. The best thing to do is put some money aside purely for emergency use so that you won’t always have to rely on aid from your parents. Of course, there may be times where you don’t have the money, but the less you have to rely on your parents the better.
If you want to succeed in anything in life, it’s always good to set goals. Good goal setting helps to keep you motivated and focused on the right path. And while becoming financially independent is a wonderful end goal, it certainly won’t happen overnight – it’s a long road that requires the completion of various different stepping stones.
To help you reach this overall goal, you’ll need to establish a clear timeline that outlines the different financial objectives you want to reach. Just make sure each objective you set is realistic, measurable, and achievable – and be strict about following through with it along the way. You’ll feel a great sense of personal achievement once you’ve successfully completed each goal.
Image Source: Unsplash
Have Multiple Income Streams
Securing a well-paying job takes time, especially for inexperienced young adults just starting out in their chosen industry. This can make it all the more challenging to reach total financial independence. If you are in this position, just know that you don’t always need a high-paying salary to reach your financial goals. You can find various ways to diversify your income, whether that involves getting an extra weekend job, creating a side business or becoming a part-time freelancer. Sometimes you just have to take that extra job to get where you want to go, no matter how difficult it is. Having multiple income streams will help you stay on your feet until you secure that higher-paying, dream job in the future.
Control Your Spending
Most of us are guilty of spending money on things we don’t actually need. While controlling your spending choices isn’t always the most pleasant thing to do, it’s absolutely necessary if you want to save enough money for financial independence. All you need to do is set a stringent budget.
However, instead of a traditional budget, consider creating an Un-Budget. In other words, set your spending limit to zero so that every purchase you make must provide value. If it isn’t an absolute necessity or doesn’t bring real value to your life, simply don’t buy it. Following this mentality will no doubt help you reach your set financial goals faster.
Making that transition to financial independence is a journey full of ups and downs. Of course, everyone’s situation is different, and some will have an easier time than others. The key is to take the process one step at a time and be resilient with your goals. The rewards will certainly be worth the hard work in the end.
Creative writer Harper lives in New Zealand’s gorgeous Auckland city, home to superb coffee and an incredible choice of scenic walking locations from Mission Bay to Rangitoto Island. She launched her freelance career writing for various sites and blogs and has just started collaborating with local businesses such as Fuso. See more about Harper and her work on Tumblr.