How to reach financial freedom
Want to reach financial freedom? Don’t know where to start?Do you know what financial freedom means?
I will explain what financial freedom is and how you can reach financial freedom in this post.
What is financial freedom
Financial freedom is being able to live the life you want without having to worry about money and be happy. You may be the sort of person who is optimistic and doesn’t worry about money at all, you have achieved financial freedom.
But the majority of people do worry about what they would do if they lost their job, or an unexpected repair or illness arose. These people would love the security of not having to stress about extra money to cover daily or unusual expenses.
You can achieve financial freedom several ways, but this depends on what your financial freedom dream is.
What’s your financial freedom look like?
What you think is financial freedom is very different to what everyone else desires as their dream of financial freedom.
Do you want to retire early, or maybe work in a job you love, maybe afford a trip every year.
Your first step to financial freedom is deciding what you want in life. This is your decision and only you can know what will make you happy.
Having mega bucks doesn’t make everyone happy, some people just love helping others, or creating their own art. Financial freedom allows you to be happy with your life.
Step 1 – Plan your money
Are you living paycheck to paycheck, wondering where your money goes, your on the road to financial disaster. A budget is the first step towards financial freedom.
Without a budget, you cannot expect to reach your financial dream. Budgeting helps you track your money and work out where you can make saving or stop your over spending.
Your budget is a work in progress as you will need to make adjustments along the way. A budget is a must if you are to reach financial freedom.
Find out how to budget at my post here https://www.lotaincome.com/how-to-budget/
Step 2 – Where are you starting from?
Ok, you have now have a budget, what’s next.
What is your financial position now? Do you have credit card debt, a student loan, or a personal loan. Get these off your hand as fast as possible.
However before tackling the debt you have, you need to get around a $1000 saved so you don’t get side tracked by emergencies that pop up. This will be your financial freedom foundation.
Any extra money you have from your budget should be put onto paying off your smallest debt. When you have paid off that debt continue with your next debt until they are all paid off. Paying down your debt is hard work, but financial freedom is not an easy fix.
When all your debts are paid, endeavor to stay out of debt, as debt will undermine your financial freedom.
Tip: Paying your mortgage weekly will save you 5 years of repayments which could be as much as $80,000
Step 3 – Income choices
On your path to financial freedom, you will have many choices when it comes to your income.
Do you get a job with a large salary, or look at a career you love, maybe you want to stay home and look after your children. These choices shape how you will reach your financial freedom.
There’s no point earning big bucks if you hate the job, you have to be happy in what you do. You may enjoy helping others by volunteering your services.
You can reach your financial goals by living humbly and within your means and not have to sacrifice your time for a job you hate.
Step 4 – Saving plan
By now you have your budget, paid off your debt, saved an emergency fund and have a few extra dollars available.
Life is good and you are stress free when it comes to those little hiccups that occur, like car repairs or home repairs.
You need a saving account to cover the the bigger purchases that are not emergencies, like a holiday. Work out what your holiday will cost and add a line to your budget to allow for your holiday, and put a little aside each week. This way you can enjoy a holiday without having to worry about a credit card debt when you come home.
Step 5 – Invest in your knowledge
Before investing in real estate, bonds or any other investment, invest in your knowledge.
Learn all you can about your investment vehicle. Read everything you can about whatever your interested in investing in to understand all options available. If reading is not your thing, there’s always YouTube, it’s has unlimited sources of information.
If you have a mortgage, the best investment you can make is to pay out your mortgage. The interest saved paying out your mortgage early is the best investment you can make.
Without a mortgage your financial position is now outstanding and frees up your income to enable investments to grow your wealth.
What do you do when you a financial independence
You’ve reach financial independence, what now?
Your life is now free from stress about where or how your going to pay for whatever you want.
You have a budget that continues to change, no debt and you are living within your means, you have investments that build your wealth and life is good. Without the stress of financial woes you can direct your life to anywhere you like, doing a hobby you love, travelling whenever you like or looking after your loved ones full time.
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