How to Become Financially Independent in your 20s as a Student.

Wednesday 4 May 2022

It is not easy to live the life you have dreamt of until you are "Born Rich" or you are Financially Independent. You can enjoy the life you want when you have sufficient money. Being in your 20s is that time when you are open to taking risks and earning a handsome amount of money for yourself and your future.
The More You Risk, The More You Can Earn.
So set yourself up, gather some energy, motivate yourself and start to achieve Financial Freedom. Also, if you start early, you will not have stress problems at a later age in your life.

I will be answering many of your questions that what Financial Independence actually means or how much money is needed to become Financial Independent and when is the right time to become Financial Independent and the main one is How to achieve Financial Independence. Also, I have a BONUS for you at the end of this article which will help you in your journey of becoming Financially Independent.

How to become Financial Independent in your 20s.

What is Financial Independence Actually Mean?

Financial Independence means having a sufficient amount of money that you can manage all your expenses without working a regular full-time job or running a business. It always does not mean having a lot of money, instead, Financial Independence means how you manage your Time, so that you can effectively use your time and grow your money. 
Time is Money.

Is it possible to achieve Financial Freedom as a Student?

Yes, everything is possible in this world. You just have to believe in yourself that you can do this. Think about Mark Zuckerberg, he invented Facebook while studying in college and he is now among the richest persons in the world. There are many examples who started with nothing and now they are not earning a good amount but they all are among the richest persons in the world. 

You will have to work hard and Smart to achieve  Financial Freedom in your 20s, and you can also do this. 

How much money needed to become Financial Independent?

You need nothing specific amount of money to become financially independent. It always depends on you, that what kind of life you want to live. If you want to live a luxurious life, then obviously you'll need more money and if your desires are not much then you might not need more money. Money is subjective as a whole as the dreams of every person are different. 

So decide what kind of life you want to live and analyze how much money you will need to fulfill your dreams and start your journey of becoming Financially Independent.

How to Become Financially Independent?

There are many ways to achieve Financial Freedom in your life, but the main problem is you don't know what are these ways. So in this article, you will get to know about 8 major ways by which you can start your journey of becoming Financially Free. These ways of earning money are very easy to implement in your life and if you use them correctly, your life will also change as they have a direct impact on your personality also. 

So, Let's start with the ways of becoming Financially Independent :

1) Focus on your Current Income

The most important thing to achieve Financial Freedom is to focus on your current income. Current Income is the income that you are earning right now by any means. You will have to focus on increasing your current income, as your income increases, you can use that money for investing and that will help you grow your money. 

Also if you do have a stable source of income, then you can work stress-free and can generate more sources of income, which will ultimately help you in your goal of becoming Financial Independent.

2) Avoid Taking Loans/Credit Cards

If you want to achieve Financial Freedom, then you must not take loans and minimize the use of credit cards so often. Credit cards and loans will act as a barrier in achieving Financial Freedom as they build a habit among people to buy products on credit and you tend to spend more when you are using your credit cards. Your aim will have to be how you can save money, not to spend money without any purpose.

Loans require payment in EMIs, and if you have any loans, try to repay that as soon as possible. So that you can use your money in the right direction i.e. investing your money. So limit using credit cards and avoid taking loans to your fullest. 

3) Make Budgets

Budgets will help you in deciding how much you are earning and how much you should spend, which will give you the power of controlling your money. You should include this in your habits, whether it may be on daily basis or monthly, you should create budgets. When you have a specific amount to spend, then you are more likely to spend on productive things rather than spending money on anything you like/want. 

4) Develop a Skillset

Developing a new skill set will open new opportunities for you to earn some extra bucks. Even if you can earn more than your current income and everyone knows that Knowledge gets praised by everyone, So, if you are spending money on yourself, and generating a new skill set, you are increasing your knowledge, which will return to you in the form of money. 

If you want to spend money, then make spending yourself the main priority of yours. In this world, technology is constantly changing so you should also change your skills according to the needs of the environment. So that you get benefitted every time. 

5) Save and Invest

If you want to achieve Financial Freedom then saving money must be among your top priorities. Saving will never increase your money, so if you want to increase your money then you will have to understand the concept of compounding. Compounding will make a huge difference in your investments in the long term. You can invest your money in various schemes run by the government so that you can get tax benefits. You can also invest in various stocks, cryptocurrencies, mutual funds, etc. Investing in these will not only increase your money but also provides a large corpus for your future. 

Try to save as much as you can, and invest all that money in different projects. You can also invest in real estate. Every person who is rich or financially free, always invests most of their income i.e. why they are getting more rich day after day. So start investing today. 

6) Generate Passive Income

Passive Income is that income that you are earning while you are sleeping. This does not require the active participation of the person. It means that you will also earn money when you are not working. Having multiple sources of income not only reduces your stress but also fulfills all your dreams. Passive income can be earned by many methods, you can write blogs, make videos for YouTube, sell something online, and many more. 

If your current income is stable so now is the time to develop some new passive income sources or I can say that now is the time to increase your sources of income. The more you earn, the more you can invest, and the more you invest the more you get in the future. Passive income is a great source of income that you can not work full time, you can work according to your desires, and over time, the income from passive sources tends to increase more than your stable income sources in which you have to participate actively.

Also if you want to enjoy your life, you must have different passive income sources so that you did not have any tension related to your work. 

7) Live the Frugal Life

First of all, let me tell you the meaning of living a Frugal life, it means that you are being very intentional about your spending. You did not spend your money unintentionally, and you like to prioritize the things on which you are going to spend. 

Frugality does not mean sacrificing with the quality, instead, you have to be frugal about things that add the most value to your life. Also, Frugality can mean different things to different types of people. The overall meaning of living a frugal life is that you are not spending much money and like prioritizing your expenses. 

8) Negotiate

Finding the best deals will save a lot of your money. If you love to shop online, then you must look for the best deals available to you, but when you are going to an offline market for shopping then you must know how to negotiate. Negotiation is the art by which you convince the opposite party to give you the product at your price. 

Negotiation will not help you to achieve financial freedom but also to get the best deals in the market and you will save a lot of money. Also, you will never get any discount if you will never ask for it, so make asking for a discount a habit.

These are the ways that will help you in your goal of becoming Financial Independent. Now is the time for the BONUS that I have stated at the start of this article. 

Financial Skills needed to Become Financial Independent

The decisions you make in your 20s, have a major impact on your finances for years to come. So it is important to develop some healthy financial skills or habits so that you can get benefits later. Developing these skills will make it easier for you to build a strong foundation for your future. 

Master these 5 money skills, and you will be thanking yourself at a later age. 

1) Creating a Budget

The first and the most important skill which you should master if you want to achieve financial freedom is to learn how to create a budget and stick to it. The budget gives us all the information that how much we earn and what may be our expected expenses during a particular period. 

You become very relaxed since you know where your money goes or what are your priorities. There are many ways of creating a budget, you can also use them in your life. You can try starting with something simple that as the 80/20 budget rule or maybe the 50/30/20 budget rule. 

You can also discuss it with your partner or your family member just to make sure that you are going on track with your financial goals. It is important to take a review of your budget after a certain point of time, It may be a month or maybe on daily basis. 

2) Financial Planning

Get some time out to visualize and plan your financial future. This plan should include all your major dreams, it may be buying a specific property or a specific car, or something else it depends on you. Financial Planning means prioritizing your goals and letting you know when and how you'll be spending your money and especially your time. As I have already said Time is money, so you have to plan your time management properly.

You can also consider seeking help from professional Finance advisors with these tasks. 

3) Learn to Avoid Impulse Shopping

Impulse Shopping means shopping without any plans or I can say that impulse shopping is generally spending money on unwanted items which are not that much needed by you. It's just you want that product so you purchased it, but if you want to achieve financial freedom then you have to stop these things for some time. 

If you want to do shopping then make a list first that what things you need the most and then find the best deals for these products, maybe online or offline. This will save a lot of money of yours and congrats you moved one step forward if you have learned this skill.

4) Saving For Emergency Fund

It is important to have a good emergency fund/opportunity fund available to you so that you will not have to depend on your credit card for covering that expense. Try to save up to four to six months' expenses. So that in any emergency situation you can use that money.   

Emergency funds can also be used for investing if you have found a great opportunity in the market.

5) Networking and Career Growth

It is also very important to build your professional network, which will help you in getting new jobs. The strong the network is, the more you get new opportunities to earn money. Your career will also grow a lot if you know how to network with people across the globe. Try to make good relations with other employees in the organization, you never know from where you will get the best opportunity. 

If you can master these 5 money skills, then it will not be difficult for you to become Financial Independent in your 20s as a student. Although it will take time to achieve all this so you have to master one more skill which is very important for all the professions out there in the world. 

6) Being Patience and Grateful

This is the most underrated skill that most people ignore because they want everything to happen at a fast pace in their life, which is not going to happen. You have to be patient and grateful for what you have and work hard for your dreams. Everything comes with time but I am sure that you can get what you want but you have to be patient. 

If you can master this skill, you can get everything in your life. So work hard for your dreams and start working today. 

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