How does that feel if you can pay emergency bills without having to worry about your bank balance? How does that feel if you can escape to your favorite holiday beach whenever you want? Awesome, right? That’s exactly what financial freedom is. You don’t have to worry about your bills, wait for a payday or compromise your personal dreams if you reach financial freedom.
While most people think financial freedom is only for a few people who often take risks, win lotteries or so on, it’s not true. Fortunately, financial freedom is not an impossibility to achieve or meant only for a few. Even people with an average income can also become financially free. However, it needs enough hard work and perseverance to achieve that.
This article teaches you how you can get your financial freedom. But before that let’s see what exactly is financial freedom.
What is Financial Freedom?
People say different definitions of financial freedom or financial independence. While some say financial freedom is the ability to spend on luxury you love to have, some say it is a never-ending flow of money and some say early retirement. Of course, the definitions are obvious and none of them are wrong. Millions of people see money in a million different ways. So, what exactly is financial freedom?
Financial freedom is taking ownership of how you want to live your life despite considering your finances. Meaning, finances do not interfere or let you compromise your dreams. Having enough money and the ability to pay any sudden bills that show up like hiccups is financial freedom. Simply put, taking a decision in your life without having to worry about finances is what financial freedom is.
Why Do You Need Financial Freedom?
There are many reasons for people to dream of financial freedom. In fact, these reasons if valid and strong can lead you the way to achieving financial freedom. You might hate to work for 9-5 under a boss, or love traveling most of your life, want to offer help to needy, lead a less busy life, you don’t want to work hard even in your 60s. You don’t want to wait for the next paycheck, bonus, worry about emergency bills, afford the best things in life, or just want to make more money and the list goes on. So, now comes the important part that is how to get there. Without any further ado, let’s get into it.
How to Achieve Financial Freedom?
As said, achieving financial freedom shouldn’t be any daunting. With the right and clear plan, you can do that. The only secret ingredient to reach financial success faster is to save more. Thinking it is easier said than done? Nope! If you can commit to your plans and ideas and have an aggressive passion to achieve financial freedom, working harder, compromising little luxuries, skipping parties don’t seem heavy to you. Instead, you will find them as obstacles on your way to financial freedom. Below are a few steps for reaching there. Keep reading…
Find Out Your “Why”
The first step to reach financial freedom is determining why do you want to achieve financial freedom. Is it for retiring earlier, or buy the stuff you want or travel anywhere you want? It’s simply your dreams, what do you want to do after reaching financial freedom. This is the same as why do you want to achieve financial freedom.
Write your Dreams
The next important step is to write down your dreams (“why”s) on a paper and put it somewhere you see it often. You will know what it takes to achieve your dreams. The bigger your dreams are, the more you have to work hard.
No matter, how big the list is, take a step forward and put it in a place you will see most often. This is because when you see your dreams on your wall more frequently, you will start working towards them. They help you adopt healthy financial habits such as spending less on less-priorty things and not craving for things that cost you more.
Read: 5 extremely ways to improve your finances today
Practice Living Within your Means
You know that your dreams cost hard work and compromises. However, remember that they pay you back well. So, start practicing living within your means. Say, decide between weekend parties or a luxury world tour (if it’s your dream) or daily takeaways or early retirement. As you know the smaller expenses can affect your finances in a long run. So, calculate your expenses and write down where you are overspending and undersaving.
Read: Frugal living: 10 ways that will save you thousands
Also, look at your premium subscriptions, luxury expenses which are not necessary and credit card bills. So that you can contribute a lot to your savings and reach financial freedom faster. Remember you should not spend before you earn and more than you earn.
Clear your Debt
It’s always a smart idea to pay off your debts first. If you have enough money to clear your debts, do that right away. The interest rates matter though. However, if you are paying more interest to the bank than you receive from your CDs or fixed deposits, it is always advisable to pay off the debts. Most importantly, doing so gives you a proper good night’s sleep. Proper sleep is one of the essential things you should have to get rich. Because health comes first.
Read: 5 ways your lifestyle is causing money problem
Start Saving Money
Now that you have paid off your debts if you have one or two, it’s time to start saving. As you are now free from the burden of paying EMI’s, you will have a lot of room for savings. You can choose to save your money in any way you feel comfortable. You can either save them in CD’s, mutual funds, or stocks to grow the money. Calculate how much risk you can afford and take steps. However, it is always better to start with little if you choosing a higher-risk investment option.
Learn More About Building Real Wealth
Achieving financial freedom is not a one-step process. You will have to work hard, earn more, compromise certain things, save more, to grow the money and get there. Surprisingly, this is how the majority of the millionaires did to reach that position. So, should you. There is no short cut. However, all it takes is an aggressive motivation to commit to your dreams and plans. Luckily, there are plenty of sources to read how to get rich, how to achieve financial freedom etc., articles like the one you are reading now. So, whenever you feel like your motivation is slipping from the cracks, read motivational stories and watch motivational movies.
Finally, with a disciplined and strategical plan, you will soon reach there. You will be able to buy what you want, go where you want and do what you love. However, you need to remember the quote “That man is richest whose pleasures are cheapest” by Henry David Thoreau. You need to always remember the value of a penny and indeed the value of things.
Bottom Line
Though financial freedom is a pretty good theory, it also can be achieved in real-time by anyone, literally. All you have to do is to take the first step. You can’t win unless you start the race. So, get started with finding the “Why”, write down your dreams, have to glance at them every day, pay off debts first, start saving and start growing your money. You will reach there so soon.
