Real truth about financial freedom

Financial freedom generally means having enough investments, savings, and cash on hand to afford the lifestyle we want for ourselves and our families and a growing nest egg that will allow us to retire or pursue the career we want without being driven by earning a certain amount each year.

Financial freedom means that you get to make life decisions without being overly stressed about the financial impact because you are prepared meaning that you control your finances.

When you achieve financial freedom, you are able to comfortably afford not only your necessities but also goals. Financial freedom is all about making work as an option, saving enough money to quit your job forever, who doesn’t want that?

HOW DO YOU GET FINANCIAL FREEDOM?

Here are financial  freedom tips:

1. Understand where you’re at.

You cant achieve financial freedom without knowing your starting point. Compile a list of all your debts: mortgage, student loans, car loans, credit cards, and any other debt you may have accumulated. Don’t forget to include any money you may have borrowed from friends or family members over the years.

2. Look at money positively.

Debt can definitely be a little bit discouraging but remember that money is a good thing, even if it seems to carry a lot of burdens right now.

To experience financial freedom, you’re going to need to look at money as a tool to help you achieve your dreams, fuel your energy, and live a stress-free life you can enjoy.

3. Track your spending.

You can use a tool like Mint, which will let you know how much money you’re spending, which categories you’ve overspent in, how much money is in all of your accounts, and how much debt you have.

Another cool thing about Mint is that it allows you to set goals within the dashboard.

4. Pay yourself first.

Meaning putting a specific amount of money in your savings account before paying anything else, such as bills. And the act of paying yourself first has helped countless people inch closer to achieving financial freedom.

5. Pay off your debt.

There are two main methods of paying off debt: snowball and avalanche. Snowball is when you pay off the smallest debt first. Avalanche is when you pay off the debt with the highest interest rate.

6. Create an additional source of income.

Your 9 to 5 might not cut it. If that’s the case, you need to step it up and look for money outside your current job.

Here are a few side jobs you can do to earn an active income:

  • Become a freelance writer finding jobs on Rev.com
  • Help a business owner as a virtual assistant with jobs on Upwork
  • Become an Uber driver
  • Help with household tasks on Task Rabbit
  • Pick up the odd, occasional job on Craigslist

HOW TO BE GOOD WITH MONEY.

Imagine a life where you don’t have to worry about money, the decisions you make won’t be based on what you have in the bank account.

You won’t take that job you don’t like just because it pays better. You won’t have to check the price tag on organic food to confirm if you can afford them.

You can opt to take uber black whenever you wish to, that’s financial freedom. It’s quite possible to get there but not overnight all you need is discipline and put in the effort.

Set life goals.

The very first step is to create a list of life goals don’t just write down a couple of things you wanna achieve but take some time to do some soul searching and identify what you really want out of life.

Once you done with the list attach timelines to them and if possible at costs. Be very specific, accurate and realistic when doing this.

It’s okay to be too ambitious but we both know its not possible to buy that R2 Millon house in Sandton within 6 months unless you won the lottery. Stick to what’s possible and achievable.

Create a budget.

It’s important to know what exactly do you consume every day and how much it costs, this is the only way to truly understand where your money goes.

Writing a household budget and sticking to it relentlessly will end up saving you a lot of money. It’s a great routine that re-enforces your goals.

Have an emergency fund.

Start by creating an emergency fund, the ultimate rule of an emergency fund is saving up six months in recurring expenses and stashing it somewhere just in case something out of the ordinary happens.

By out of the ordinary I don’t mean vacations or that fancy watch you’ve always wanted, that money should only be used on actual needs.

These emergencies include car breakdown, job loss or unexpected hospital bills only the most important needs. Instead of borrowing money or using credit cards which will get you further into debt, use your savings fund which is a first step anyone who wants to achieve financial freedom take.

 

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