The term financial freedom can mean different things to different people. However, the general concept behind it can be described as not being held back by your finances. If a lack of money is the main reason you are not able to do things you want to do, you don’t have financial freedom.
The way to achieve financial freedom may vary depending on your individual/specific situation, but some measures like clearing off your debt if you have any and saving for a rainy day are common to all.
Here we are going to discuss 10 generally applicable steps to achieve financial freedom that you should consider regardless of your personal financial situation.
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Achieving financial freedom is a long-term thing and so, you need to shift your focus from short-term financial success to more long-term goals. And the first step towards that is to learn about money.
Owing to the internet, making yourself financially literate is easier than ever today. Try to make the most of the readily available information and follow financial pages and channels on your social media.
It will not only help you educate yourself about personal finance but (perhaps more importantly) give you the hope and confidence to pursue your financial dreams.
Start with an objective assessment of your current financial situation without being unduly optimistic. Take a look at your income and expenditure and acknowledge where you are most likely to be headed if you continue down the same path as you have been going.
Do you have a decent disposable income (money left over after all your expenses have been met)? Do you have any money saved up for emergencies? Are you steadily moving towards paying off your debt in full?
You don’t have to be harsh or defeatist but, worry is not such a bad thing if it moves you to take productive action. Who knows, maybe an alarming realization is just what you need to improve your financial situation.
For some, financial freedom may be being able to retire early, for others it could be being able to afford extravagances, while for others, it could be simply paying off their debt or having enough saved up for a rainy day.
Whatever it is for you, you need to define it accurately because it is really hard to achieve an objective when you don’t have a clear picture of what it is.
Try to get a specific number for exactly how much money in the bank is your goal. It will help you make decisions that align with your goal better.
Read the article below if your financial goal is to create a passive stream of income for yourself.
Whether it is your student loan or the mortgage on your house, you cannot have any kind of financial freedom as long as you are in debt. If you have got debt and clearing it off is not a priority point in your financial goal, you might need to reassess your whole goal.
That said, it doesn’t mean you should just go all in and devote all the money you have saved up to pay off your debts. It makes far more financial sense to put aside some money for emergencies and then focus your funds on getting rid of your debt as soon as possible.
However, if you have credit card debt, it is generally best to pay it in full every month because of the higher interest rate on it. If you keep paying that interest every month, it is obviously going to be a barrier in your way to achieving financial freedom.
The two most commonly used methods to pay off debt are:
You may also adopt some kind of combination of these methods or a hybrid method if your financial situation calls for it.
Ultimately, the appropriate strategy for you depends on your individual situation, how much, and what kind of debt you have got. And if you are unable to decide for yourself what way would work for you best, don’t hesitate to consult a financial advisor.
Being financially conscious is absolutely essential for achieving financial freedom no matter how little or how much it entails for you. Forget being reckless, even if you are laissez-faire with your spending, financial freedom is probably nothing more than a nice-sounding popular phrase for you.
And setting a monthly budget doesn’t necessarily mean putting yourself on a budget or being frugal (though in many cases, it may be what is needed.) It is more about planning your expenses in advance to create resistance towards unhealthy financial behaviors like impulsive spending.
But remember, don’t set your budget too tight. Start with making a monthly budget that you can easily stick to and once you have gained the confidence, you can progressively make it more and more strict.
Sticking to a budget also helps you cultivate the discipline to save money which is something that can go a long way in helping you reach your financial objectives.
They say freedom is on the other side of discipline, and the same holds true for financial freedom. You need to have the discipline to save money by distinguishing between where you need to spend and where you only want to spend.
If you start the habit of saving money every month, your savings could not only fund paying off your debts but also a passive stream of income. It is a very common financial strategy to save money now and buy rental properties from it or invest it in stocks later to create a passive stream of income for yourself.
And having a passive income is perhaps the best way to ensure financial freedom as it entails money working for you rather than the other way around.
Saving is great but not nearly as good as earning more. Because, let’s face it, you can only save so much.
But, thanks to the internet, today there are various ways you can make money online with just a computer and a strong internet connection without giving up your current source of cash flow.
Almost everyone today has got a social media account and hours of mindless scrolling is probably one of the things standing in between you and financial freedom. Just imagine where you would be today financially if you had put all those countless hours into something productive.
But don’t worry, you can still redeem all that time spent on social media by monetizing your social media following which you have acquired after years on a social media platform.
If you have got a property you can rent out, you can also use more traditional ways to earn some side income using different online rental platforms like Airbnb and Vbro.
For alternate means of income, it is generally best to find something that aligns with your current position or skill set. For example, if you have a good hold over a craft or academic subject, you could try online tutoring. Or if you are good at writing, start a blog.
If you have got a hobby that you could use to make money, utilizing it is the single best way to get an alternate means of income. Read this article for more ideas: 10 Everyday Hobbies That Make Money
The Synkdup Headhunter Program is a great way to reach your financial objectives without investing a whole bunch of time.
It is a novel recruitment marketing program that capitalizes on the concept of social media recruitment and affiliate marketing to create a convenient way of making some extra money for participants.
As a headhunter, you are provided web links to job openings across the U.S. which you share on your social media handles along with your regular posts in descriptions, captions, and comments.
And for every candidate who applies to a job through one of your links, you get a commission of up to $25 (provided the applicant is not bogus). It is one of the laziest methods out there to monetize your social media presence.
Basically, what you would be doing as a part of this program is helping people find a job which is really cool as it would mean you would be helping others achieve their financial goals while chasing yours.
Believe it or not, living below your means has its own charm. You will be surprised by how little you can get by if you just try. And how much you can save every month by simply cutting little unnecessary expenses will surprise you even more.
You just need to identify areas that you could spend less on every month without adversely affecting the quality of your life and start spending less on them. For instance, avoiding eating out is not only good for your wallet but your health too.
In the same vein, don’t go after the brand name when buying clothes, and don’t spend on accessories that serve no purpose other than making you look cool or rich. Decide for yourself what is more important to you, to look rich or to achieve financial freedom.
Enjoying yourself is important but, who says it has to be through material possessions? Simple living and shopping smart, especially with a goal in mind, can actually be really rewarding and fun. When you compare prices, look for sales and discounts, and eventually bag a good deal, it feels no less than a victory.
Getting sick can cost a fortune even with health insurance. And, when you are healthy, it has a direct positive impact on your productivity as well.
You need to take care of your mental as well as physical health to achieve your financial goals and so, if you find yourself stressing too much about your finances, maybe it's time to take a step back.
Stress can be really deteriorating for your body and it is really important to ask yourself ‘’ Is it really worth it’’. Money comes and goes but lost health is extremely hard to make up for.
Your body and mind are your permanent assets and you should treat them as such. After all, what good is financial freedom if you don’t have the health to enjoy it?