Freedom is a state of complete self-rule. You can do what you want because of the comfort that surrounds you. Financial freedom is a state of being worry less about your future expenses because you are prepared and able to clear them off without even trying. How to achieve financial freedom?
Although freedom is a personal definition and is different for everybody, I’d state financial freedom as the “ability to survive without debts without reducing lifestyle expenses, relying on savings and investments, even after losing a job”.
How to achieve financial independence in this pressing economy?
Make a new monthly financial budget
Every financial advice I have given in the past emphasizes this point, and I will never stop stressing it. But first, track down where your money is going for which after, you can make a budget.
Making a budget is another way of teaching yourself how to manage your finances. When you stick to your budget, you are cutting down on unnecessary expenditures and avoiding a splurge. Before you attain your financial peace, you must learn how to manage your finances. If you cannot manage the little money accordingly under you, then you will not be able to handle the more significant sums that may come in, in the future. It will draw you further from attaining your financial independence. That’s the first, long step on the way for achieving financial independence.
Write your financial goals
Create long term financial goals that are going to help you attain your overall financial freedom. Your goals should include answers to questions like;
- How do I increase my income?
- How fast can I clear all my debt?
- How can I avoid more debt in the near future?
And so forth.
Your goals should be made up of what activities you can do to lead you to the big life ambition. Make sure to attach a time frame to each purpose you intend to achieve them.
Always review your goals as much as possible to remind yourself.
Start to invest
Investment is a slow process that grows with time and the best time to start is now. Have a retirement plan set up and talk to your employer about it, so you don’t have to worry about doing the deposit yourself.
It is crucial to have funds to cover up any future emergencies, so you do not strain to get another debt on top of the existing one.
Aim for financial assurance for your kids’ college funds. It is essential to invest as you’ll have your future financially together.
Minimize your expenditure
Cut down your regular spending by a quarter and more. Most millionaires are frugal spenders before they accumulate considerable assets. They hardly wear designer clothes and own a very minimal number of cars to what they need and stick to it. Being economical is not something that you learn and adapt to in a day. It is clear that even before today’s millionaires became extremely wealthier, they already practised economy in their daily lives.
Those extra bucks you are spending on designer clothes that you wear only one is enough to fill your bank account as emergency funds.
Your spending should be lower than your income. How much lower depends highly on your frugal nature.
Develop your financial knowledge
I would recommend getting yourself a financial advisor, but we have just talked about minimizing expenditure, and this might impact your finances. I do however still recommend it for those who can get it for free or at a subsidized fee from friends and relatives.
The moment you have gathered enough amount of wealth and investment, you might then need a financial advisor to help you make the right financial decisions.
Invest in education. Sometimes it is even worthy of borrowing for this purpose
Vocational and business education is generally one of the best investments. Even if you have to take out a loan for this – you will probably win in the end. Among the millionaires, many have not graduated from school and are self-taught. However, the majority of millionaires in the world are educated. Some of them supplemented education after they started earning well and became financially independent. Without knowledge, they would usually not be able to get rich or keep their property.
Get extra bucks from an additional source
Keep learning and building new skills. Become an expert in your interests. We know it is not as easy to become a millionaire when employed. Others think it is way too impossible. Most people have quit their jobs to invest in businesses and income-generating occupations.
With the internet, learning something new and finding your customers has been made as simple as “a, b, c…”. Extra income should be used wisely to clear debts, build on savings, and investments.
Do not expect your financial situation to change overnight. Yes, you can be under a very high payroll, but your money mediocrity will pull you down to bankruptcy. Good money habits take time plus effort to evolve in a person. When you try to adapt to the above patterns, you will slowly incline towards your financial freedom. Best of luck!