Who does not aspire to be financially independent and lead a luxurious life? But have you ever given more thought on how that lifestyle is built and all that goes into the making of such a life?

Habits are what make a person- we become what we do. Many of us aspire to financial independence, but achieving it isn’t always possible without first changing some entrenched habits. Impulsively buying a cat-shaped kettle worth a lot of money will not help you boost your net worth, reflecting and handling your finances might just.

Here are some tips that will help you get a better grip on your finances while inculcating certain lifestyle changes that will only help you in the long run-

1. Pay yourself first: When you get your salary debited in your account, you instantly start making plans about what you will do with that money. Stop. Postpone your excitement till after you are done putting 10% of your salary in your savings. It makes it easier if you think that 10% was never yours to keep, but belongs to the future you. This change will not only allow you to save and later relish a peaceful mind but also help you cushion the blow from any curveballs that life throws your way.
    
2. Delay gratification: How often does it happen that you visit the mall, and get stuck on this one item that you think you really need? A simple solution to tackle such a problem is to give it a 24-hour thinking window before buying it. If you can still rationalise the buy post that period, most likely it is something that would add something to your life. This is not to say that you should become frugal and should stop “treating yo self” but having a little control over how you spend your hard earned money is not a bad thing.
    
3. Create multiple streams of income: Putting all your eggs in one basket has been declared a lousy idea for centuries now. It is one piece of advice that makes sense. Picture this, you have only a single source of income- your job. Something goes wrong and you lose your job and with it your one source of money.
   
   People have now started investing in multiple ventures, while also managing their traditional source of income. In a time like today, where sacking people from jobs they have been doing for years has become a norm, it is only smart to branch out and earn more. Working for a few extra hours, putting a little more thought in investment will not only drive up your income but also help you become less dependent on your salaried job.  Great ways to expand include investing in the share market and stocks, becoming a silent partner in a promising firm etc.
    
4. Ditch that debt: One of the most emotionally tolling processes is to pay off your debts. Most people struggle with their student debts well into their forties. Paying off your debt does not solely include the amount that you took, but with the rising inflation, the interest rates have reached new heights.
   
   Spending most of your salary paying on debt is emotionally draining as well. But doing it little by little do you more harm than good. If you keep pushing away paying your debt, the interest rates will pile up, and you will have to endure debt cuts from your salary for longer.
   
   Plan how you can get out of debt more quickly. Letting go of your debt will allow you to save more money, and invest in your future, rather than linger on to the past. Become debt free and pursue goals that you cannot afford at the moment because of your debt, freely!
    
5. Avoid lifestyle inflation: If you aspire to be rich, one of the basic rules is that your expenses should not exceed your income. Some people tend to grow with their income, and that seems like a fine idea, till you realise how much that hike actually costs you in the future. Maintaining a modest way of living would help you straddle for the future a little better. Spend on yourself but limiting it to spending a feasible amount is vital. A great tactic is to ignore the salary hike and live according to your previous salary; that way you will save more, and also keep your expenses in check.

It is really easy to get caught in the idea of what people expect out of you. Running around in a circle of people who all have a Mercedes will make you want to spend on one, but keep in mind how your expenses will suffer as a consequence.

Do buy that Mercedes, but do it once you have enough saved, and splurging that money will not burn a hole in your pocket- only then will you be able to fully relish the luxury of that car. Who knows, you might just save enough to buy a Rolls Royce instead.

 If you plan to have a future where you do not have to think twice before spending on you or your family, you will have to start building on it now. Inculcate all these habits in your life, and you will notice a considerable change in the amount you invest in your future!

Jul 37/19

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