We all want freedom, and there are many different kinds of freedom – of course, it depends on what is important to you and your lifestyle. However, we think that it’s safe to say that many people want financial freedom, whether that’s paying off their mortgage, cutting down on their credit card debt, or finally reaching that threshold of savings that makes them think, “Yes! I finally don’t need to worry about money anymore.”
Regardless of which camp you are in, here are 7 ways we believe you can achieve financial freedom.
Get some solid planning done
Freedom might mean no constraints and no planning for you, but to get there, it’s likely that you will need to do some planning (it’s ironic, we know). In particular, we mean financial planning, or, as it is more colloquially known, budgeting.
Often, people feel like they are drowning in financial problems because they simply have too many bills to pay and can’t keep track of all their expenses. To avoid this, start charting your income and expenditure. Figure out how much you earn, spend, and how much you can save.
Once you’ve figured out how much you can save, it’s likely that you’ll need to figure out what you’re going to sacrifice – unless you already own a million-dollar salary. For most people, financial freedom means building up a solid amount of savings. To do this, you’ll need to sacrifice some of your wants, whether that is a shopping splurge every month, another holiday, or a phone upgrade. Remember the goal and these little sacrifices will become worth it.
Cut down on your debt
For others, one of the biggest barriers to financial freedom is their credit card debt. If this is you, then consider re-evaluating your various credit card accounts and figuring out how much you still need to pay back and at what rate. If you have many credit cards, it’s worth considering whether you need so many – and perhaps consolidating them into one card. If on the other hand, you’re about to get another one, pause and think: do you really need it? Will it help you in your journey to financial freedom? Perhaps not.
Increase your income
If you’ve tried your hardest to cut down on your expenditure but still don’t feel like you’re saving that much, consider upping your income. This can be done in various ways: if you have some spare time and the willingness, you might want to consider developing some streams of passive income. If you’re less entrepreneurial, you might want to look around your neighbourhood and see what odd jobs are available. Just think: even something like tutoring people in English can bring in a few hundred dollars a week!
Remember those around you
What does that mean? We suggest that on your road to financial freedom, you would do well to remember those around you and their financial situation. In particular, if your partner doesn’t have the same financial mindset as you, you might land yourself in a lot of trouble down the line. Similarly, if you have ageing parents who might need extra care, make sure you factor that into your decision about how much you are saving.
The road to financial freedom may seem, especially after the above points, uneventful and dissatisfying. It really doesn’t need to be so. If you are feeling discouraged, remember the goal: financial freedom. If that isn’t enough, take some time to learn from those who have trodden the path before you. Libraries and bookstores are filled with stories of financial success. Take some, have a read, and get inspired.
Stop worrying about money
Ultimately, you will never be free from a tough master, and as we’ve all experienced in the world today, money and personal finances can be an incredibly tough master. If you want to achieve ultimate financial freedom, you need to let go of our concern over money. Remember that virtually no one says in their last breath, “I wish I had saved up more money” or “I wish I had paid off my debts”. What is real freedom to you? Maybe it’s worth chasing after that instead.
Amelia Harris is a freelance writer who is interested in personal finance and smart choices. She has recently been investigating and is highly impressed at the SMSF admin service offered by Clime.