Achieving financial freedom may seem like a mere concept, but in reality, it is within reach for everyone. Regardless of your current financial situation, you can always find a way to get out of it. Even if you're burdened by student loans worth tens of thousands, like I once was, you can still achieve financial freedom. One way to start is by trying out a budgeting app.
In this piece, we'll explore the significance of financial freedom and provide tips to help you achieve it, some of which have been effective for me.
Financial freedom means assuming responsibility for your finances. You have a steady income that allows you to lead the life you desire, free of concerns about how to pay bills or unexpected expenses. Additionally, you are not weighed down by a mountain of debt.
To achieve financial freedom, you must acknowledge the need for more income to pay off debts, which may include earning extra income through a side hustle. Additionally, it involves planning for the future by setting aside money for emergencies or retirement.
5 Game-Changing Financial Freedom Tips are discussed below:
1- Understand Where You’re At
Knowing your financial starting point is essential to achieving financial freedom. Although it may be disheartening, evaluating the amount of debt you owe, your lack of savings, and your financial requirements is a crucial first step.
Begin by creating a list of all your debts, such as your mortgage, student loans, credit cards, car loans, and any other money you may have borrowed from friends or family. Add up all the numbers to determine your total debt.
If the figure is high, do not panic. Later in this article, we will provide strategies to help you pay off your debts. If the number is low, congratulations! You can share your financial freedom ideas in the comments section below.
The next step is to take stock of your savings. Make a list of all your savings, including savings accounts, stocks, company stock-matching programs, company retirement-matching programs, and retirement plans. Additionally, add up all your recurring monthly income, such as salaries and side hustles.
Remember these numbers as we discuss the following financial freedom suggestions.
2- Look at Money Positively
Debt can be disheartening, but it's important to remember that money, despite its current burden, is beneficial.
In her book, "You Are a Badass at Making Money" Jen Sincero explains that individuals who earn little money often experience shame when it comes to making money. Consequently, the most significant obstacle they face when it comes to earning money is the belief that having money is bad. They feel guilty for having it and even guiltier for wanting more of it. Sincero stated that "we use money every day to enhance our lives, yet we always seem to focus on the negative aspects of it.
Money is simply a necessity, akin to food or water. It assists in acquiring essential items and living the life you desire.
To attain financial freedom, you must consider money as a tool that can assist you in achieving your objectives, boosting your energy, and living a worry-free life that you can relish. If you view money negatively, you will inadvertently undermine your chances of acquiring and retaining it.
3- Track Your Spending
Keeping track of your expenses is a crucial step towards achieving financial freedom.
Tools like Mint can be used to monitor your spending, providing you with a breakdown of how much money you are spending, which categories you have exceeded, and the amount of money you have in all of your accounts, as well as your overall debt.
One of the advantages of Mint is that it allows you to establish goals within the dashboard. By tracking your goals and the amount of money you contribute towards them, you can determine the precise month when you are expected to achieve your goal. This holds you accountable and reminds you to continue contributing towards your goals.
Using Mint for just one month enabled me to save additional funds towards my wedding goal. The tool kept me focused on my objective and motivated me to generate more passive income, propelling me towards my financial milestones.
4- Spend Less
Warren Buffett, who has a net worth of $90.3 billion, purchased a five-bedroom home in 1958 for $31,500 and has not moved out of it since. His frugality may be the reason why he is one of the world's richest people. On the other hand, Kanye West, who lives in a $20 million mansion and once asked Mark Zuckerberg for $1 billion on Twitter when he had $53 million of debt, spends money he doesn't have.
The truth is that many wealthy individuals don't display their wealth. Zuckerberg wears the same simple t-shirt and jeans every day.
Spending less can actually help you become wealthier. By spending less, you'll have more money to save towards financial freedom, and you'll also learn that you don't require a lot of material possessions to live, which can help you save more money.
5- Buy Experiences Not Things
Life is short, and it's important to enjoy it while you can instead of hoarding your money until retirement. Ultimately, it's the experiences you have, not the material possessions you own, that will bring you true fulfillment in life.
Consider whether the things you're buying are truly making you happy in the long-term. Is the debt you're accumulating worth it?
Instead, let's focus on creating happy memories. Think about your happiest memory. What were you doing? Who were you with? Let's create more moments like that.
For example, if you enjoy working out with a friend, invite them over to do a free YouTube workout together. If you're looking for a special date night, find a unique activity on Groupon for a fraction of the cost.
And if you've been dreaming of traveling to Rome, don't hesitate to go on that vacation guilt-free if you've saved up for it. Or consider becoming a digital nomad and traveling while working remotely.
In conclusion, achieving financial freedom is a journey that requires dedication, discipline, and consistency. By following the 5-step formula outlined in this guide, you can take control of your finances, overcome debt, and build wealth. Remember to start with a clear vision and a solid plan, track your spending, save and invest wisely, and always be open to learning and adapting. With time, patience, and perseverance, you can achieve financial freedom and live the life you've always dreamed of.
