You might sit down right now saying to yourself, how can I stop putting burdens on my struggling parents, asking them for money for my ever-increasing upkeep, well, becoming financially self-sufficient is quite easier than you think – especially when you follow through with these 6 steps to guide you in your path.
Whether you are male or female, taking over your finances will eventually be a necessity when you are just a few years into adulthood. Even when you get hired by that dream job, it will take some time before you can adjust and completely pull the plug from your parents. You would need a lot of patience, planning, and discipline.
Having cleared some grassroots, it is time to put in the work in order to set up yourself for a lifetime of financial success and security. Follow through with these checklists and let me help you along the way to financial independence from your parents, no matter what age or gender you are.
What's in this guide?
1. Create a takeover plan
Long-term financial freedom is the aim, but how will you get there? Create a plan, and an agenda, then discuss it with your parents – yes, your parents. I know most of us don’t really have that close bond with our parents, but this could be for a starter.
- Outline the steps you intend to take: Breaking your long-term objective down into small, attainable milestones can allow you to track your progress and stay on target. Make a list of all the steps you’ll take to achieve financial independence, such as “reduce monthly spending by X amount” or “pay my textbooks,” if you are, of course, a student. Check them off as you go; each small victory will push you to keep going.
- Create a routine: Allow yourself sufficient time to complete each process.
- Be ready to show your parents you are ready: It is scary, I know, but easy and steady does it. Be ready to slowly detach yourself from their money on you. You should not do it in a disrespectful way, show gratitude for their support, and to really show you care. You. You can ask them to help hold you accountable as you take on more financial responsibility without them.
Also Read: 6 Ways to improve financial literacy
2. Watch out on your spending
One key to financial stability is learning to live within your means or to spend less than you make. Now I know it would be quite tempting as a student to get one thing or the other your colleagues and friends are getting themselves, just to be in vogue. Keep your eyes on the goal here mate – SELF SUFFICIENCY FROM YOUR PARENTS.
Well, another issue worth mentioning is the present economic condition and the constant increase in the price of goods and services. Here, set, set, set your priorities straight. Get the things you need (NOT want) NOW! before the cost triples.
Moving in with roommates or cutting back on takeout may be necessary, but such temporary sacrifices will help you rediscover your foundation.
On a side note, it may seem apparent, but it’s remarkable how quickly you can burn through your income if you don’t keep track of where your money is going. Make a habit of keeping track of where and how you spend your money. It might shock you when you see where it goes.
3. Establish a solid base
Establish a budget and increase your savings to lay the groundwork for a seamless transition.
- Maintain a sensible spending plan: I am also aware of the popular funny saying, “the savings I saved for last month would later save me this month.” As the saying sounds legit and all-round truthful in this period, try to follow the 50/30/20 rule when creating your budget: Assign 50% of your income to needs, 30% to wants, and 20% to debt repayment (if any) and savings. Now you are no longer confused about the difference between needs and wants, right?
- Boost your earnings: To increase your savings faster, take up a part-time job or side business around your residence or institutions (for students).
Here is a testimony from Abdulwahab Olatunji, a Nigerian, who boosted his earnings as an undergraduate, letting go of wants and making some sacrifices;
“As an undergraduate – I always wanted to make my own money, do my own things, attain sufficiency as a student. This dream came true in 2012. I sold my BlackBerry Bold 5 for N25,000 ($69) I took the money and added to my N7,000 ($20) savings.
I had always admired a particular boutique outside of the school area. One day, I went into the boutique and negotiated with the owner. I asked him to sell his wears to me wholesale. He sold 32 pieces of nice tops to me at a rate of N1,000 each ($3). I went back to school and told all my friends after class to please check into my room after the class.
There, I displayed everything. On the spot, I sold about 12 pieces for N1,500 ($4). Within two weeks I was left with 2pieces of shirts, I repeated the process about three times, I had managed to roll over my capital, I later bought back my phone. My friends saw me making a lot of money. No one really knew what I sacrificed.” - Create an emergency fund: Being able to draw from this fund in case of unforeseen costs will prevent you from going into debt or needing your parents’ help. Try to set aside enough money for at least three months’ worth of necessities.
Also Read: How to pay off debt and earn financial freedom
4. Develop a debt strategy
I have little to say here, but one thing is certain, it is difficult for someone, I mean anyone to attain financial freedom if he or she is in debt, no matter how small it is. One thing about debt is that it has the power to accumulate over time, little by little if you let it.
So one thing you should do is to tackle your debt. Yes, fight it like your life depends on it, cause it does. From the smallest to the biggest, that is how it should be done. One thing I would also want to let put, it is not advisable to pay up a debt with a debt. Let that sink in for a moment.
5. Pay your parents for rent
If your family house is more accommodating and welcoming to you, one advice is that you should start paying rent to your parents, one way or the other. I know this sounds absurd, but it works like a charm. This would also act as a cushion solution to the housing problem we have in most countries, especially Nigeria.
As you know, the price of renting an apartment, even down to a single room apartment, apartment, is downright overwhelming and high. Now, instead of using a huge amount of money to pay for those houses, you would have saved a lot by paying rent in your parents’ home.
You could kill two birds with just one stone, as you would save a lot on housing and also earn the respect you deserve at your parents’ abode. The point is actually to manage your finances as if you were on your own.
Your parents might call such action baffling, but I am certain that once you open their minds further to the advantage, it would have on your savings, I bet their cash radar would be tingling.
Also Read: Do I need a personal financial advisor?
6. Make more money
Now the next and final step is to print more money. This might be harder than it looks, but if this is what you want, now is the right time, as the change begins with you. You might already take a step toward getting a better or higher-paying job.
That could take longer, so try to search for opportunities to increase your income. By monetizing your talent with freelancing on Upwork.com, you can find thousands of projects or jobs posted every single day. This bridges the income gap until a better-paying hustle comes along.
Conclusion
Although these six steps won’t fix every financial issue, they will assist you in forming the wise habits that will set you up for financial independence from your parents. Making a plan that includes precise target amounts and dates will help you stay motivated to complete the task at hand and prevent you from going over budget.
