Financial independence is a goal for many. Few realise this in their lifetimes. This is often due to a counterproductive mindset about money and habits concerning money rather than a person not earning enough income. If one spends more than they earn they will never generate wealth and wealth is often generated over time through accumulation. Reducing spending and debt payments means more money can be diverted towards savings and investments. Not all debt is created equally and debt acquired in property and education can appreciate and return more than initially invested. Knowledge is power and specialist intellectual skills can be outsourced at high rates sustainably over time. Educating oneself in matters of the world including person finance will always reap a great harvest. 

Have a financial plan! 

Sit down and create a budget. This can be monthly or even an annual budget. It is imperative a person knows how much they spend each month and on what. You can look where savings can be made. This is one way to avoid overspending. The aim is always to keep monthly spending lower than monthly income. Pay yourself first. As soon as you receive your pay divert a set amount immediately to a savings account. This savings account could be separate or in addition to an emergency fund. An emergency fund is typically six months of wages saved away for the instance when an emergency arises putting you out of work. You will be able to maintain your current lifestyle for at least six months. The emergency fund can also cover a sudden immediate cost that needs to be paid helping you avoid taking out a loan (which comes with interest) or depending on the good will of others. Another amount should be allocated to S&S ISA contributions to ensure that the £20,000 tax free allowance is realised each year. Maximise pension contributions. Money put in pension pots reduces the amount of tax paid on overall gross earnings. I would rather pay my future self in the form of a pension than pay the government in income tax. 

Overpay on mortgage repayments! 

One of the most effective strategies to reaching financial independence is to limit the amount of interest paid on products. Where possible put full down payments and avoid interest charges completely. Where full down payments cannot be made for example with a mortgage for your own home make regular overpayments and maximise the over contribution total each year. This is often set at 10%. By overpaying each month by even a few hundred pounds this will reduce the principal amount on the mortgage and therefore reduce the interest paid overtime. This strategy can drastically reduce the amount of money paid in total during a mortgage period by a factor of several tens of thousands of pounds. This can be applied to any large repayment agreement. 

Maximise use of Stocks and Shares ISA! 

Money saved from avoiding interest payments can be redirected towards stocks and shares (S&S). Use a S&S ISA as the vehicle for investing in the stock market. There is a £20,000 tax free allowance which one should aim to max out each year. Using a S&S ISA will also save money on broker charges which are very low in these accounts and avoid the S&S being taxed at the end of the year. The best strategy is to invest in Index Funds that are automatically managed and Accumulation Funds which reinvest the dividends paid on the S&S automatically meaning the account worth keeps growing, compounding. This is a low risk and certain way of slowly increasing wealth. This is a long game where the S&S are purchased and held for many years for a couple of decades to compound. Money is only truly made or lost when the S&S are sold and exchange hands. If they keep being held no money is being lost and the value of the S&S will most certainly increase overtime as the whole stock market grows over time. Invest in global tracker funds with built in diversity. Like credit cards less is better and more manageable. Often one good global tracker fund will suffice. 

Live a frugal lifestyle! 

Consumerism will keep a person poor unless a person has excessive amounts of wealth to offset reckless spending. If you keep buying new products you cannot accumulate wealth because it keeps being spent. Essentialist and minimalist lifestyles are effective bases for frugal living. There is no sleep like the sleep of a debt free person who owns their own property and has multiple streams of income. Buying a brand-new car is a poor financial decision as is leasing a vehicle. The best option is to buy a second hand used vehicle with low mileage that can be sold after some years still holding significant amounts of its value and replaced with another second hand used vehicle. New cars depreciate fast as do designer clothing and a lot of tech products. Thrifty spending habits will help generate wealth as money saved is redirected to investments. Good debt builds a person up and increasing their contribution to the world. Compare this with consumer debt which is bad debt and depletes wealth faster than anything else. Do not try to keep up with the Jones’ they are probably up to their neck in debt or living off generational wealth. Live well within your means. Buying one consumer product often leads to buying more consumer products to fit the image. Paying off all credit cards at the end of the month avoids interest charges and builds credit score. It is best to have a primary credit card and at the very most have two credit cards and no more. This will help in controlling spending. I hope everyone who is striving for financial independence will reach their goals.