Five Steps to Financial Independence, a.k.a. stop behaving like a toddler and reach your goals faster!


Know what I want independence from?

Interest rates. Fees. Unexpected bills that endanger my financial ambitions, such as buying a home. I hate giving away extra money that I worked so hard to earn. Drives me crazy!

You can keep the fireworks and hotdogs if I can have that!


steps to becoming financially independent


Financial Independence Isn’t A Dream


When talking about financial independence, people can mean different things – both from each other and, also, during different times in their lives.

Some seek out independence from forced labor, a.k.a. working for the man.

Others just want financial security, such as the ability to KNOW you can pay the bills, own the roof over your head and provide for your kids.

Still, others look at financial independence as being able to afford what you want when you want it whether it is on sale or not!

Truly, the dream of financial independence isn’t a small one. However, it doesn’t have to be something that exists only in the fantasy realm, either.

For me, I am looking to provide for my family, own my own home, and not have to be counting pennies two days before payday. If I can achieve that degree of financial independence, it will be a solid step forward. Sure, I may move the goal post after that, but it is a great first step.


steps to becoming more financially responsible


So, What Does It Take?


 Much like transforming a toddler into a functioning adult, it doesn’t happen overnight. It takes consistent, steady application of specific actions and values. Often, it’s not fun. Sometimes, it is messy. But, in the end, the accomplishments is one of the joys of life.


Step 1. Understand your specific situation.

When it comes down to it, only two things will help you reach financial independence – spending less or earning more.

Everyone’s finances are different. Your bills, your resources, and your debts all play a role, and you need to know the real, financial truth. As Americans, too many of us act like financial toddlers (to stretch the metaphor) by sticking our fingers in our ears at the first mention of “budgets” or “spreadsheets.” Don’t be like that!

Sit down and list out all your annual expenses. Include student debt, credit cards (along with the interest rates) and assets like vehicles or investments. A hack? Figure out your monthly expenses, and multiply it by 12; just don’t forget the once-a-year or unexpected expenses such as car registration or Christmas gifts.

The lower your annual expenses, the easier it is to get to financial independence.

Don’t feel scared of figuring this out. Or, more to the point, if you are scared, you have to realize that you want financial independence more than you are scared of knowing the financial truth.


planning to become more financially responsible


Step 2. Make a plan.

This is the dreaded budget word. Honestly, though, I feel better with a budget. I don’t have to worry if checks are going to bounce or if I can afford to get new tires on a moment’s notice because I have made a plan to afford these things.

I use a zero-sum budget. That means, I open an excel document or grab a pen and paper and write down my total paycheck after taxes, also known as take-home pay.

Then, I start subtracting starting with my most vital needs and working my way down to non-necessities. For instance, I start with my housing payment. Then, groceries, utilities, car payments, etc.

Next, I move to debt repayment. I am trying to use 30% of my income to pay off debt. I start with the credit cards with the highest interest rate and then use the snowball method to attack it in ever-bigger chunks.

After that, I take out savings. My goal here is 20% of my take-home pay. I tell myself this is a non-negotiable item. You can save for a housing down payment, retirement or some other goal, but save!

Finally, with any scrap of income left, I move on to the luxuries or fun items. But when I run out of money, I stop. This doesn’t mean we live a life of boredom and deprivation. But it does sometimes mean that I put off a purchase until I have saved enough money or that I buy used or that we sub in some free fun instead of costly items.

I am focusing on creating a better future. That means sacrificing spur-of-the-moment expenditures and non-necessities today.

You don’t have to go at it alone. Plenty of apps and programs will help you create and maintain a budget. Check out these nine great tools!


how to budget to be more financially responsible


Step 3. Cut, Cut, Cut

Now, look at your budget. What can you trim? For each person, this might be something different. Personally, I love experiences with my kids, so I focus on keeping some money in the budget for family trips to the museums (often free on Mondays!).

But my personal clothing budget is almost non-existent. I wore the same maternity clothes through three pregnancies. I have shirts I bought years ago, and none of my shoes have fancy labels.

This works for me. It doesn’t have to work for you.

But you do need to trim from somewhere, and the more you trim, the faster you will get to your goal. 


budget to become more financially responsible with your money


Step 4. Increase your income

We were bound to arrive here eventually. The fastest way to reach your financial independence is to earn more money (and sock it away).

First, start with your current employer. Check out to see what your position, experience, and location typically nets in salary. Then, go ask for it!

Millennials are already keenly aware of this but one of the fastest ways to increase your income is to switch jobs. It’s easier to get a salary hike by moving jobs than by staying in place for years at time clawing your way to a 3% annual raise.

Next, consider the ‘ole side hustle. Forget watching the next bingable Netflix show, and go get yourself some more income! Consider something in the gig economy, such as Uber, or freelancing. Sell items on eBay or Craigslist. Set up a side business. Here’s a list of profitable side hustles.

Eventually, though, you do run out of hours in the day. That’s when you need to turn to passive income, such as investments. This step is not recommended until you are debt free and living in your own home. You don’t want to be throwing away money on interest rates or rent when you start investing.


how to save your money increase your income to be more financially responsible


Step 5. Celebrate the moments

Celebrate when you hit small and large financial goals. If you save enough for a new KitchenAid mixer you’ve been eyeing, buy it! If you ditch your daily coffee and save enough to enjoy a splurge, go for it.

And when you hit that big milestone, congratulate yourself.

So many people cannot discipline themselves enough to hit those marks. They are toddlers pretending to be adults. And eventually, they are going to hit a time in their life when they cannot just keep doing what they are doing. Then, the debt will still be due. They won’t own a home. And they won’t be enjoying life quite so much.

Be an adult. Life is sweeter. And you get to stay up later.


enjoy the little wins in life and become more financially independent

About the author