Many of us may dream of financial independence, but many also just assume that it's out of reach. That's not a helpful outlook, though, because most people can significantly improve their financial condition, and very possibly achieve financial independence, as well.

Let's define terms first, though, because "financial independence" means different things to different people. A common definition is having enough money to not have to work. You might also define it, though, as being financially healthy, living comfortably, and being on track to secure a comfortable retirement. Thus, you might still have to work and save, but you're not relying on financial help from others, such as your parents, government programs, or credit card lenders.

Here are milestones on the path to financial independence:

  • You have an emergency fund, with money accessible in case you need it.
  • You're debt free, with even your home paid for.
  • You have various income streams, sufficient to support your expenses.
  • Your income streams will last for the rest of your life.
  • If you're working, it's only because you enjoy it and want to.

Steps you can take
So how do you reach such a state of financial nirvana? You might look at your income, which is rather fixed from year to year (aside from any raises you get), and your spending, and conclude that there just isn't enough room to make much of a difference in your financial condition. You're probably wrong there. Here are some actions you could consider. You may be unable or unwilling to do all of them, but just a few could make a meaningful difference.

  1. Boost your income: This is easier said than done, but in most cases, it can be done. You might find a better-paying job, for example, even if it means a little more schooling. You might take on a second job, too -- if only for a while. One year of earning an extra $200 per week amounts to more than $10,000 that can help dig you out of debt, or jump-start your savings.
  2. Reduce your spending: Living at least somewhat frugally is critical to achieving financial independence. You might eliminate some of your expenses, such as that venti Java Chip Frappuccino. A daily $4 drink costs you $1,460 per year. If you smoke a pack a day and can quit, you might save $2,500 per year (and add a few years to your life, as well). Many cutbacks can be relatively painless, too, such as dropping your cable TV subscription (or just the costly premium channels) and subscribing to an inexpensive streaming service instead. You might simply negotiate some lower rates by calling parties like your cable provider or credit card lender and asking to pay less. Shopping around can yield some surprising savings -- the advent of Obamacare, for example, might deliver some health care savings.
  3. Have a plan: Are you deep in debt? Make a plan to get out of it, detailing how much you'll pay off by certain dates. Draw up a retirement plan, too, determining how much you need to amass by retirement and what income you can expect in your golden days. Your days of financial independence, for example, might be supported by $20,000 annually from Social Security, $10,000 from dividends, $15,000 from a pension, and perhaps $15,000 from an annuity. Assess your investments now and make sure that you're investing effectively as you take on a reasonable amount of risk. 

Financial independence is achievable for many of us, either before or during retirement. No matter how unprepared you may think you are, there are always things you can do to improve your situation. Just working a few more years before retiring can make a huge difference.

If you really aspire to financial independence, decide what you'll do to get there.