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Being financial independence may seem out of reach to some, particularly those in their twenties. However, the truth is that it is more than possible for anyone to achieve it- even if you have thousands of student loan debt. Whatever financial difficulties you are facing right now, there is always a way to get back on track.

Financial independence, in reality, can mean different things to different people. Some believe that to be financially self-sufficient is to be able to meet their financial obligations without the assistance of parents, relatives, or friends. While others believe that financial independence means having the freedom to enjoy the “fruits of their labour” when they retire. But either way, everyone is rallying towards the same goal- to be financially free. So, let’s dive into the six important steps to make it happen:

1. Know Your Financial Objectives

Everyone has their own set of financial goals, including you. Think about your long-term goals. Are you aiming for complete financial freedom, or are your goals flexible? Whatever your objectives are, write them down either on paper or on your phone, and be sure to look at them every day. Your age and financial situation will impact the goals you choose. If you are in your twenties or thirties, you will have years to accomplish your objectives and the freedom to take greater risks.

At that age, you might want to consider the FIRE (Financial Independence, Retire Early) approach, a method for planning your finances and reining in your spending habits to retire as early as in your 40s. The good news is that you don’t need to set aside half of your salary to achieve your retirement objectives. Instead, start by putting at least 15% of your earnings into tax-advantaged retirement savings accounts. The trick is to make saving and investing a monthly habit. When you do that, time will work in your favour instead of against you.

2. Learn to Haggle

Although many are hesitant to negotiate for goods and services, afraid that it might make them seem pushy, being able to negotiate the best bargain can help save thousands each year. Small businesses, in particular, are more receptive to bargaining than big ones. However, certain things in life cannot be negotiated- take power and water bills, for example. The utility bills have statutory fixed rates, so your hands are tied.

But when you find yourself in a position to negotiate, just make sure to be clear on your negotiating goals. Unfortunately, many show up at the negotiation table without a clear idea of what they want to achieve. This simple mistake can lead up to you paying more than intended.

3. Diversifying Your Sources of Income

If you are able to build up a solid stream of passive income, then get ready to say hello to financial independence. One popular strategy for passive income is creating a blog or presentation template for various themes, then sitting back while cash rolls in from the sale of your product. Templates can be sold through popular sites such as Amazon or eBay.

You might also want to consider affiliate marketing. Social media influencers and bloggers use affiliate marketing to promote a third-party product by linking it to their sites or social media platform. You’ll receive a commission whenever someone clicks on the link and makes a purchase from the third-party affiliate. The commission might be anywhere from 3% to 7%, so you’ll need a lot of traffic on your site. Try popular niches such as financial services, fitness or beauty.

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4. Clear Your Debts

Spending less and saving more are laudable goals. But being debtless is prime to success. Debt is a serious threat to attaining your financial freedom as it prevents you from getting the most out of your money. What you spend on debt payments could be stashed away during your life’s upheaval. There are two primary approaches to chip away at those revolving loans.

The first is the snowball technique, in which the smallest debt is paid off first. In simple terms, you cross one small debt off your list before moving on to the bigger ones. The second approach is the avalanche technique, in which you pay off the debt with the highest interest rate first and then move on to the smaller ones. Both methods are highly effective, but at the end of the day, you need to choose using a free monthly budget template.

5. Create an Emergency Fund

An emergency fund may go by many names, but at its core, it’s a necessity for anyone seeking financial independence. It acts as a safety cushion against financial adversities such as getting evicted, sudden illness or even losing your job. So, it is the only thing that keeps you afloat during these rough patches in life. Think of it as an insurance policy. But rather than paying a company, you’re paying yourself money that you can use later in life.

Start by calculating a list of your monthly expenses, including your rent, utility bills, groceries, and transportation expenses. Preferably pen it down on your laptop so, data can be stored safely. Then start a separate account that you won’t be able to access using your debit card. Set up automatic transfers from your primary bank account to this designated account to coincide with your paydays. That way you won’t have to see the money in your primary account. It is as if it never existed. And once you’ve saved a sufficient amount in this account, you can finally sit back and relax.

6. Spend Less

Spending less does imply sacrificing your current lifestyle or living frugally. However, spending less is primarily about spending wisely, which can be accomplished in many creative ways. For example, some of the common techniques include learning how to make delicious gourmets in the comfort of your home, which in turn decreases your eating out expenses.

If you love to make a pit stop at your local coffee shop before your morning commute or simply enjoy a midday coffee break with your friends, you might notice a huge dent in your bank account. These small sums can add up to hundreds of dollars in a year. Try investing in some of the best coffee machines for barista-style coffee at home. Not only can it save you the extra money, but it can also save your time from the long queue. Double the win!

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These 5 steps of financial independence can have varying degrees of difficulty. You may find that some of them come naturally to you while others need a great deal of effort. Tracking expenses, spending less, and investing, for example, are much easier for you than generating extra income. But just know that the more steps you complete, the faster you will be on your way to financial independence.