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How To Start Saving For Financial Independence

Dealing with demoralization when saving money

Once you understand where your money is going and what is left for savings, you may feel demoralised. Even though the amount is small in the first few months, you may be surprised by how much your balance grows in six months or a year.

The power of compound interest is what helps accounts grow exponentially and reach your savings goals quicker.

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How To Start Saving For Financial Independence

How To Start Saving For Financial Independence

https://millennialmoney.com/start-saving-money/

millennialmoney.com

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Key Ideas

Start a financial independence journey

One of the most challenging aspects to change your finances is getting started.

  • You may have an idea.
  • You may want to read more.
  • You may talk and talk about doing this and that, but then never follow through.

However, don't procrastinate - get going today and learn as you go. Sit down and create a spreadsheet of all your bills, income, and any extra spending. Once you've listed everything, open your investment account and start saving.

Set alerts to work on your finances

From the day you start saving, put a reminder on your calendar once a week to work for one hour on your finances in some way. It could include reading, balancing the accounts, optimizing cash flow, researching funds, etc.

There is no right number of times to check on your account. If you feel the urge to make decisions based on the news or market changes, limit how many times you look at your accounts. With experience, you will gain more control.

Dealing with demoralization when saving money

Once you understand where your money is going and what is left for savings, you may feel demoralised. Even though the amount is small in the first few months, you may be surprised by how much your balance grows in six months or a year.

The power of compound interest is what helps accounts grow exponentially and reach your savings goals quicker.

Dealing with market fluctuations

Don't get worried when the market starts turning red.There have been a few corrections in the market, but they typically recover in a few days or weeks.

There are times you may want to get rid of a fund or stock, but small changes in the market are not a time to panic.

Improving your financial IQ

It takes time to learn and improve your financial IQ, but it is certainly not that hard.

  • Once you have a saving plan in place and your accounts open, you don't want to jump into investing as you risk making beginner mistakes.
  • Teach yourself the fundamentals and visit websites that provide basic information about platforms, financial terms, types of funds, etc. This includes places like Investopedia.
  • Ask any friends or family who may already know a lot about finances, but be careful since they may have outdated ideas.
  • Avoid jumping in random funds because you read that in an article.

Making the time to read will get you the right kind of results.

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