20 Steps Toward Financial Independence

20 Steps Toward Financial Independence

May 20, 2020

Tagged As: Personal

When you thought about what your senior graduation would look like, you probably didn’t imagine it would involve virtual ceremonies, social distancing, and a world full of uncertainty. Yet those are the times we find ourselves in.

If you don’t know what might come next, it’s important to be prepared for the unexpected. Whether you’re headed off to college, going right into the workforce, or have other plans for the future, here are 20 steps that 2020 graduates like you can take to achieve financial independence in a world that can turn on a dime.

1. Build your credit

Making consistent payments on credit cards, rent, student loans, and other financial products can help boost your credit score, giving you better terms on big-picture purchases like cars and homes.

2. Get a savings account

Put a small amount of money away each paycheck, and it will add up in no time – giving you a safety net in troubled times. 

3. Put extra cash into a certificate of deposit (CD)

This unique financial product usually earns a higher interest rate than checking accounts, with the stipulation that you can’t touch the money for a certain period of time. At the end of that period, you’ll get your money back with interest – like a cherry on top of your well-earned cash.  

4.  Write out your financial goals

Do you want to focus on paying off debt, or making a certain amount of money per year? It can help to have a concrete reminder of what you’re striving for. 

5. Track your goals

Once you’ve written out your goals, use the Goals feature (coming soon) in Hills Bank Online on your desktop or smartphone to give yourself a target and start setting aside money automatically! 

6. Consider the whole picture

Becoming financially independent is about more than just making more money. It also matters where you live (and whether you have roommates), where your career might take you, whether you need a car or can use public transportation, and much more. 

7. Don’t be afraid to negotiate

Whether buying your first car or starting your first “real” job, you’d be surprised how much you can get just by asking politely! Just be sure you can point to reasons why you deserve the price you’re asking for. 

8. Live within your means

As we’re sure some adult has told you before, credit cards are not free money. But living within your means also involves taking a critical look at your spending and asking what you want to prioritize in your life. Living within (or below) your means now allows you to have a higher standard of living later. 

9. Track your spending

Many people find they don’t actually know how much they spend on various items – until they start tracking it. There are a number of apps that track and categorize spending to give you an accurate picture of where your money is going, including the Manage My Finances tool within Hills Bank Online

10. Create a budget – and stick to it

A budget can seem restrictive, but it’s actually one of the greatest tools available to achieve financial independence as it lets you truly control your spending and set your priorities for the future. 

11. Pay down high-interest debt

Though no one likes paying the bills, reducing or eliminating debt with a high annual percentage rate (APR) will save you money over the long run. For most people, this is credit card and student loan debt. 

12. Look into debt refinancing

You can also pay off long-term debt (such as car loans, student loan debt, mortgages and auto loans) years in advance by refinancing, which can lower your interest rate, typically in exchange for higher payments. You’ll pay more now, but by paying off loans faster you’ll avoid accruing as much interest on the balance of the loan, which saves you money over time. 

13. Put your bills on auto-pay

If you have the money to pay your bills each month, it pays to automate the process. You won’t have to worry about whether you submitted your payment in time to avoid late fees and interest charges, and some lenders and service providers give incentives for setting up automatic payments. 

14. Switch to paperless for financial statements

Not only will you save trees, you’ll also be able to easily find previous bills, statements, and other important financial information right in your email inbox to help you track your spending. 

15. Save for retirement

What? Saving for retirement as a high school graduate? It sounds crazy, but once you start working full-time, it’s a good idea to set aside some money from your paycheck for your 401(k) retirement plan*, especially if your employer matches your contributions. Like paying down debt, you won’t see the savings immediately – but as your money compounds and grows over time you’ll be glad you started saving when you did.

16. Consider investing on your own*

Aside from retirement programs sponsored by your employer, there are a number of easy-to-use apps that help new investors get into the stock market. But remember that the stock market is not guaranteed to go up, and not to invest more than you’re comfortable with possibly losing. 

17. Sell things you no longer use

Overdue for some spring cleaning? This summer, set aside the things that have been gathering dust to consider selling them in a garage sale, on sites like eBay, or to retailers that offer pre owned goods. It can be hard to part with items once they’re back on the top of your mind, but ask yourself: if I haven’t thought about this thing in the last year, will I really end up missing it?

18. Replace an expense with an event to save

Do you buy coffee every morning? Stop for a snack after work? Quitting these recurring habits (especially ones we look forward to) can be challenging. But if you decide to save the money you would’ve spent on one or two of these expenses each week, you might find the act of saving to be just as habit-forming!

19. Earn while you spend with high-interest checking

Let’s face it: some spending is simply unavoidable. For those purchases, consider using a high-yield checking account that earns interest when certain deposit and spending requirements are met. Those account debits might feel better when you know an interest payment is on the way! Ask a Hills Bank banker about our High Interest Checking Account.

20. Get in touch with a personal finance expert

Our bankers are well-versed in helping young adults like you achieve their financial goals, and luckily, they’re only a few taps away! Download the HERE by Hills Bank app to text with a banker whenever, from wherever. They can help keep you connected to your finances – and your future goals. 


*Investment products are not a deposit, not FDIC insured, not insured by any federal government agency, carry no bank guarantee, and may go down in value.