Take a second to picture this scenario: your friends and family around your age constantly complain around the dinner table about being unable to meet their expenses and fulfill their dreams, but you sit in the corner, silently, tasting sweet satisfaction. While everyone was off wasting their money, you took the time to educate yourself about finances. Now, when everyone is complaining about pay cuts and rising prices, you can smile and reap the benefits of your hard work and discipline.
Doesn’t that sound like an enticing scenario? It might also sound a bit daunting, but don’t worry! In this article, we’ll walk you through the concept of financial freedom and how you can start implementing certain things in your daily life. Let’s get right into it.
What Is Financial Freedom?
Financial freedom means having a regular source of income that can help pay for your living expenses, having surplus cash in case of an emergency, and having the funds required to achieve specific goals or passions you might have. The better you control your finances, the more freedom you get in different walks of your life. You get the freedom to choose between different options, the freedom of exploration, risk-taking, and enjoying comfort and security.
Let’s look at how we can achieve this freedom.
The Proven Path To Financial Freedom
BUILD A BUSINESS! Don’t want to build a business? BUY A BUSINESS! If business isn’t quite your thing just yet, keep on reading to learn how to achieve financial freedom in other ways.
Five Ways to Achieve Financial Freedom
Set SMART financial goals.
If you want to succeed in any field of your life, you need to set specific, measurable, attainable, relevant, and time-specific goals. You can’t set ‘Get rich’ as a goal and expect thousands of dollars to start rolling into your bank account! Let’s change that into ‘Save $40,000 by the end of this year.’ Once you have a specific goal, you can start breaking it down further. What sort of job are you willing to take to earn that money? What new saving habits should you employ that could help you save more every month? List down all possible questions you might ask anyone about this goal and then answer them.
Learn the basics of budgeting
You’d be surprised at how clueless some people are about budgeting and managing your finances. If you’re one of those people, don’t worry since this is a time of learning and growing. Many budgeting apps and tools can help you be more aware of how you’re spending your money, but if that doesn’t work for you, you can manually track your spending on Excel spreadsheets as well. Knowing your inflows and outflows will help you develop a better monthly and weekly budget, which you can tweak in times of emergency and crisis.
Get rid of your debt once and for all
Did you know that the average American has a consumer debt of around $96,371? Student loans, mortgages, and credit are all factors that contribute significantly to this universal problem. If you want financial freedom the old fashioned way then you must say goodbye to your debt once and for all. Make it a priority.
Go to a financial counselor or advisor
If you’re someone who isn’t quite fond of research, especially when it comes to learning how to manage your money, you should pay a visit to the best financial counselor or advisor in your locality. Your advisor will initially evaluate your current financial standings before knowing the nitty-gritty of your financial goals and breaking them down into a realistic plan you can follow to achieve financial freedom. They can also give valuable insights about investments you should make, your options upon retirement, and how to set up an emergency fund. If you have a few extra bucks to spare in this case, definitely go for it!
Start contributing to your retirement fund
Unless you come from an exceptionally wealthy family, you’ll likely face all sorts of financial difficulties once you retire and your pension runs out. This fact holds especially true with rising inflation all across the world. A critical step you can take in this scenario is to start saving today for your retirement fund, even if it seems like something that’s ages away.
Start by assessing how much you need to have saved after you retire. Alongside saving, make sure you invest in profitable assets to earn a hefty sum of money over time as passive income. And again, if all of that sounds too daunting, you can always take a step back and ask your financial advisor to help you put together a tailored plan to your specific needs.
Conclusion
Achieving financial freedom doesn’t have to be that difficult a process. Stick to the basics we laid out for you, and don’t hesitate to ask your peers and superiors any questions you have. If all else fails, get into business. Anyway, the more you know, the more attainable your freedom is because knowledge will always be power. For more information, check out some of these books as well as other finance related articles on this site.
