Being financially independent is a dream of every person. But unfortunately, people are often burdened with increasing debt, financial emergencies, unnecessary spending and other issues thwart that dream is from getting fulfilled. Many people after long employment period, spend their lifetime earnings on unnecessary things that after retirement they run out of ways and ideas how to get a proper living. There are endless examples of people earning a high salary and still end up leading a struggling post-retirement life and there are also examples of people with financial freedom on low income. It’s all about planning which you need to do while you are in your employment period, earning money. In Malaysia, there are 1.2 million government servants working in various government departments and agencies. A research study conducted by The Malaysian Employees Federation (MEF) revealed that in average 100,000 employees retire every year, from both the public sector and private sector combined. The study reveals a frightening result which shows on 5% of Malaysian’s are prepared for post-retirement life and will be financially independent after they retire. Despite growing awareness about people becoming financially independent even with low income, many people do not translate their plans into actions and they have to suffer the consequences later on in their life. Here are few ways by which you can be become a financially independent person even on a low income: –
1.Setting Life Goals: Chalk out your life goals as soon as you get a job and start earning, keep an aim that at a certain age you have to save a certain amount of money. How much money do you have in your bank account, how much you aim to take it to and at what age? Simply plan these things out and make sure you transform this plan into your action.
2. Don’t keep outstanding credit: High-interest loans like credit cards, home loans and mortgages often create a barrier in your way of becoming financially independent. Try avoiding these high consumer loans if not extremely needed but if have taken any make sure you pay the outstanding credit balances every month by allocating a separate budget from your salary which will go towards paying these balances as suggested by MeCan Trade Malaysia, who tends to give an overall effective solution to all budding business entrepreneurs.
3. Make A Monthly Budget: Making a monthly or a periodic budget is one of the most important steps towards you being financially independent even on a low income. When you start getting a salary, allocate a portion of your salary towards the household budget, your leisure activity expenses, other credit expenses and the rest towards savings.
4. Invest your Funds in Fixed Deposits: Fixed deposits have a higher rate of return compared to normal savings. So, invest your funds into for fixed-term and earn returns at a fixed rate.
5. Maintain all your belongings: Do proper maintenance of your property from your house to car to any kind of property you own. These things will get obsolete fast without maintenance. Maintenance cost is just a part of the cost of replacement. So, it’s better to maintain rather than replacing it.
6. Take Care of Yourself: Avoid any kind of bad habit which might affect your health severely and might cost you a lot of money in the future. Addiction to drinking and smoking not only takes away your lots of money but harms your health severely as well.
7. Keep Bargaining: Many people think bargaining make them look cheap but it simply isn’t, shopkeepers don’t discriminate against their customers. So, if they are allowing to have a bargain then why pay extra for an item that can be bought for a lower price.
8. Lead a Simple life: Keep your lifestyle simple. Do have a bit of a lavish lifestyle but don’t go into overspending. Have some leisure activities but don’t make them a habit which might consume all your savings and make your life harder.
These practices won’t exactly solve your money problems but will help you develop a positive attitude and behaviour that can get you on the path of financial freedom even on a low income.