Steps to Becoming Financially Independent
When it comes to the financial and money conversation, it’s clear that women are behind. To many, finances are an intimidating topic because it takes time and motivation to become financially stable and reach financial independence. And let’s be honest… feeling confident about money can be a long process. The meaning of financial freedom and independence varies between each person, but we got to sit down with Sophie, the founder of Financial Feminist, and discuss how women can take control of their financial futures and stop splurging, start saving, and escape the paycheck cycle.
Early on in her career, Sophie worked for a FinTech company in Austria where they trade cryptocurrency. She was surprised that there was not a lot of easy-to-understand information about it and found the information to be super boring. While working at this company she realized, “The way we talk to women and the way we talk to men about personal finance is so different. Women aren’t taught to create wealth.” But there was one statistic that she couldn’t shake, and that is women are five times more likely to be stuck in the paycheck-to-paycheck cycle than men. “I can find a way to make this sound fun. I like to take difficult topics and make them sound exciting, interesting, and put a spin on it,” Sophie realized.
So, what are some of the ways you can take control of your money and work towards becoming financially independent? Sophie shared with us some of her top financial tips for women…
Have an Abundance Mindset
You need to have a mindset shift to achieve your financial and money goals. Sometimes when people are struggling with money or stuck in a paycheck cycle, they have this scarcity mindset, which happens when you think that there is never enough money. Being stuck in this mindset can create toxic money habits like splurging or taking money out of your savings account. Instead, we need to shift this perception to an abundance mindset. When you have an abundance mindset, you are grateful for the amount of money you have and it helps you to work towards better money habits. It is also important to keep realistic goals and give your money a specific job and purpose. This can help you build wealth, create healthy money habits, and work towards having this abundance mindset that will positively impact your financial situation.
Have a Timeline and Make Specific Money Goals
Having a timeline will help you work towards achieving your money goals. This relates to giving your money a job and purpose. Making specific money goals will help them become more realistic, and will motivate you to reach the goals that you set for yourself. So, take time to sit down and map out your financial goals. “It is important to have a realistic mindset on where you want your money to go, besides just saying you want to save money,” Sophie encourages. Becoming financially independent doesn’t happen in an instant; it takes time to see progress. “Pinpoint one financial goal you want and start working towards this goal.” Set your timeline, and start building better money habits.
Identify Your Definition of Financial Independence
You may be following someone else’s idea of financial independence, but many factors make your financial situation unique including your job, lifestyle, and your goals. Ask yourself, “what is my definition of financial independence and what is my financial goal?” Is it to put $1000 in your emergency fund? Is it to pay off high-interest debt and the overwhelming amount attached to your credit card? Your financial needs and wants are not the same as someone else’s, and we all have different perspectives of financial independence. Figure out your definition of financial independence and learn about all the steps that will help you work towards your goals like setting a timeline, making specific goals, and learning about financial education.
Learn about Financial Education
Even if you don’t feel comfortable about the financial discussion or investing, take time to read and learn about things that inspire you. “Women want to invest and learn about these things, but there is not a lot out there that can teach us that,” Sophie advises. “Women have been held back by society and the way society talks to us. Finances are a feminist issue and we need to be talking about this.” Although there are many financial resources out there, it’s important to find people to whom you can relate. If you are wanting to understand finances and how you can become financially independent, read a book, take a course, invest in a coach, and find a community of like-minded women who can encourage and support you on your journey to financial independence, because this will help you invest in yourself and invest in your future.
Find a Community of Like-minded Women
Find a community of like-minded women to help you along your financial independence journey especially when you are learning it by yourself. Sophie explains, “There are so many things that impact women financially because we are constantly pushing against the patriarchy. Society holds women back when it comes to having control of our money, and financial independence is the biggest problem.” Nobody will understand your financial needs more than a woman who has been through the same journey you are about to embark on. One of the best ways to keep reaching your goals is by having women in your circle who help you stay motivated and cheer you on as you progress and set new goals, as you work towards becoming financially independent.
Although there are many more aspects that will help you become financially independent, start by knowing your definition of financial independence and your “why”. Work on creating an abundance mindset while mapping out your financial goals and timeline. Your specific money goals are unique to you and your lifestyle. Dedicating yourself to learning more about financial education, and finding a relatable community of women, will help you build better money habits and stay motivated on your journey to financial independence!
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