One goal that we all have in common is to achieve financial freedom. However, statistics show that just a small percentage of people actually achieve that. All of us need enough money, that we never have to worry about money again, but the question is, are you ready to go get it or not?
Today, with technology, many people are finding it easier to achieve financial freedom faster than ever before. It takes discipline, committment, and consistency, and through proper financial planning, you can become one of these people too.
What Is Financial Freedom?
To most people, financial freedom seems like a really nice theory. But, in reality, financial liberty, is possible for anyone. This is not the kind of freedom that is freely given but comes only when you take control and ownership of your finances.
It means having a reliable cash flow that will allow you to live the way you want, how you want without having to worry about your bills or unexpected emergencies. It means that you are also aware of your debts and are in control of them.
Financial freedom is all about realizing you need more cash inflows to cater to all your debts and also increasing that inflow with a side hustle. Financial freedom also means that you also constantly thinking about the future and are actively planning for it- which means you have your long-term plans in play.
How To Achieve Financial Freedom
People have different definitions of what financial freedom looks like. For some, it means being able to pay down your debt and bills on time with the money that is left over each month. To others, it means having a stockpile of money to cater to any emergencies. But, there are some things you can start doing today to achieve true freedom today.
Step #1: Live Within Your Means
A good financial freedom plan is one that allows you to live comfortably within your means. The path to true financial independence has to begin here, even though so many people overlook this fact.
It first starts by tuning your mindset and even though this is something most people don’t like hearing, it is the absolute critical foundation to achieving financial independence.
By living within your means I mean that you have to be honest with yourself. You need to analyze your beliefs about money and examine your relationship with money. It is a foolish thing to assume that wealth is something that is attainable to only the people with sizeable incomes. Avoid overspending and take control of your finances.
Step #2: What Is Your Financial Position?
You are now beginning to take corrective actions and the next step is determining where you are at financially. Remember, you cannot achieve financial freedom without knowing your starting point. You need to examine your debts, how much do you have and how much savings can offset your debts?
You need to be very positive. Some issues, especially debts can be extremely depressing, but remember, you are already winning. This is a valuable step in the right direction.
Compile a list of your debts: they could be mortgages, student loans, car loans, credit cards, and so many others. Also, do not forget to include any money that you may have borrowed from your friends and family members over the years. Add up the numbers, and find out how much money you owe.
How big is it? Or how small is it? Well if it is a big number, do not panic, we’ll share some tips that will help you pay down big debts.
Now that you understand what your situation with debt looks like, the next step is compiling a list of your savings. They could be in your savings account, or in form of stocks, company stock-matching programs, retirement plans, and so many others. Do not also forget to add the recurring monthly payments that you receive, for example, salaries, or side hustles.
Now you have the two sides to the ‘financial independence’ equation. Keep these figures in mind. We’ll use them later.
Step #3: Talk To Your Financial Advisor about Financial Freedom
Though not everyone may need a financial advisor to guide them through this process, it is important that you seek out a person who will help you make smart money decisions that will advance your financial goals.
Think about it, there is a reason why financial experts do exist. These people have the skills and the experience that most people do not have and in addition, you will find that most of them are emotionally attached to your monies, thus they will give you neutral and objective advice in relation to your cash.
Step #4: You Need To Have Goals
Some people say that they do not see the need for goals, but, they are extremely important. They answer one critical question, why do you need money?
Most people who have attained true financial freedom have done it because they have tied their independence to an emotional goal. For instance, it could be to get out of student debt or even to save for their first home. Whatever it is, you need to be intentional and emotional about it.
The more debt you crash, the more excited you become. The more savings you stock up, the happier you become!
There is an excitement that comes seeing the numbers change over time knowing that you have worked hard to make that money. Financial freedom has to come from an emotional place. That desperate and desolate place, to want to be free fuels the desire to want more.
Remember, you may not be able to achieve your goals and dreams in just a month. But a year’s worth of working on your goals and dreams will get you the progress you want. Your goals also must be very specific, let it be a number you want to hit.
Step #5: Invest More In Yourself
It may sound like a trite phrase but in everything you do, pay yourself first. It means setting aside some amount of money in your savings account before paying anything else.
The simple act of paying yourself first has helped so many people move an inch closer to their financial freedom.
Paying yourself doesn’t also have to be in terms of money. Learn something new, take up a new course, and so many other things. Pay yourself first before paying your bills and expenses. It will always pay.
It doesn’t stop with these five steps. We have so many resources to help you build a life and a future that you want and how you want it. Financial freedom will help you take ownership of your life’s finances. It is about living comfortably in your means and embracing a frugal spirit. This means that you are having your money being spent on the things that you need like food, shelter, and so on and not on the things that you want. Not the difference between the two. By following these simple steps, you can be sure that you are making progress towards achieving the life you want.