Just like any steps into adulthood, becoming self-reliant is something everyone has to do at some point or risk becoming a victim in the world. It can happen over time or all at once, depending on your situation. With proper education, planning, and resources, becoming financially self-reliant is possible and lets you take control of your life.

Preparing to be financially self-reliant is very important so you aren’t caught unaware when it has to happen. Major life events, like your parents retiring or getting older, come with more responsibilities you have to pay for.
 

Identify What You are Reliant On
 

Depending on your situation, there may be a lot or a few things you rely on others for help when it comes to money. For example, if you go to college, you might be reliant on a scholarship to pay for everything, or your parents for paying your phone bill. As you grow older, you will likely take on more and more expenses, but still have a few things you are reliant on that are too big to handle.

Take stock of your life and which bills you aren’t paying for currently. By knowing which ones you are reliant on others for, you can start preparing for the day you do have to pay for. Some examples of common expenses you might be reliant on others for include:

• Housing
• Food
• Cell Phone and Internet
• Health Insurance
• Car related expenses
• Education
• Technology
   

Earn Enough to Cover Expenses
 

While you are still able to count on coverage for the items you are reliant for, make plans on earning enough money to cover those expenses. Shop around to know how much they cost, make a list of how much everything will cost you and then start working now to earn enough to cover it all.

Rather than just staying comfortable now with your income with the help of others, push yourself to bring in more. Apply for new and better jobs, push for promotions and advancements and advocate for fair raises and wages at your current job. That way, when the day comes that you have to start paying for your bills, you have the money to do so.
 

Have an Emergency Fund
 

Being self-reliant financially is more than just paying your monthly bills, it’s being able to take care of yourself when things go wrong. Your parents might be a safety net saying you can always move back home or ask them for help, which is wonderful, but they won’t always be there to catch you.

Build up an emergency savings fund you can use when something big goes wrong. This could include needing to buy a new car after it breaks down, paying bills if you lose your job, or covering medical expenses after an emergency. It’s wise to have three to six months of income saved up at all times in case of an emergency.

If you need a good place to keep this emergency fund safe, accessible and separate from the rest of your finances, Pioneer’s Special Purpose Savings Account is the perfect match.
 

Investments for Your Future
 

Once your now and immediate future is secured, it’s time to begin planning on how you’ll stay self-reliant for the future and that means investments. The biggest and most common investing you need to do is preparing for your retirement. There is no guarantee Social Security will be enough for people to survive on in the future, so you need to have enough income to keep afloat.

If your employer offers it, utilize a 401(k) to build your retirement funds. Many employers will match your deposits to a certain amount, meaning free money for when you retire. If you don’t have access to a 401(k), open an IRA at Pioneer, to start saving on your own.

You can also start making investments sooner for your future. If you have the means, investments are a way to grow your wealth and become self-reliant. Having access to wealth that isn’t just in your savings account can lead to living a better lifestyle and more security. Pioneer has partnered with Cetera Advisor Networks to give our members access to investment services.
 

Become Financially Flexible
 

In order to be self-reliant, you need to be able to handle anything life throws at you and that means being flexible. Being too rigid, too structured, and stubbornly sticking to a plan can only result in being ill prepared. Everything should have a little bit of wiggle room in case you need to pivot to a new expense or opportunity.

This means not putting all of your eggs into a single basket. Don’t keep all of your extra money in savings because then it isn’t growing, but don’t put all of your money into investments because then getting it back out when needed takes time. Keep your finances balanced to give you flexibility when needed.

Another important tool to financial flexibility is your credit. With a healthy credit score, you can take out loans and use a credit card when necessary. This can help you fill needs you can’t afford right now but can pay off over time or later. To learn more about your current credit situation, use Pioneer’s Credit Checkup to guide you on understanding  your credit score and how to improve it.

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