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Just the term alone gives makes everyone giddy and want to know how to do it and be it! Are you one of them too?
For others it means being able to buy everything and anything they want while for others, it may mean not needing to work. Here’s the catch though, Financial Freedom doesn’t really have a concrete definition. Instead, it is a lifestyle one wants to be in.
Who wouldn’t! No need to think about how to pay the bills but still having more left as savings, or having a fully emergency fund set aside. Anyone would love to be in that position in life. But life isn’t that easy for most. Being the one in-charge to make decision (life-decisions) doesn’t make it any easier. Having the freedom to choose what and how to deal with circumstances in life and deal with the consequences of it is a hefty task! No wonder no matter how liberating being an adult could be, others would rather live like a child. No worries, no problems, easy life!
How do you gauge Financial Freedom, some would ask? While answering this may vary, here are the most common signs you’re headed towards that direction.
1. You’re not a Financial prisoner
Having bills to pay, essentials and needs to be taken care of and other responsibilities in life (most of them) that needed you to be financially capable is perfectly normal. Yes! Even the riches people in the world, or even people with power deal with those responsibilities too! Well, not to the extent though of them actually scrambling for a job just to make ends meet neither pay those bills personally. They have specific people already doing those things for them. And that’s basically what everyone should aim to have.
Not the part where you don’t need to pay your bills personally but at least not be in that position to be scrambling to find money to pay them.
Having a job doesn’t mean you’re on the right track either. That still depends, as if you hate your current job, then that simply means you’re being held captive of your job just so you could stay afloat financially. While this is what most people are into, this shouldn’t be the way to live. Life is too short to spend it in doing things you don’t like.
Don’t get me wrong though, loving a job doesn’t mean the job needs to be easy. Everyone needs a little challenge in everything they do in life for them to feel alive. If not, that job would better be given to a robot then.
2. Know you what you want. Is it Financial Freedom you’re really aiming for or Financial Capability?
The word Freedom makes it very lucrative for anyone to fall for it but is it what we really want? Just to be free of financial worries, be able to stay at home and no need to work, no need to think of bills no more responsibilities, no, no, no! I’ll make the story cut-short, that also means you want to die already. Too harsh? Not really, that’s reality. If what you aim in life is just for the sake of breathing, then what makes you better than a person in coma with machines hooked up on them to breath?
One should live a life with purpose. Find value of themselves. You might be wondering hearing rich people often say they’re very busy working. Working? With all those money under their belt and still working? While some may say they’re just being greedy, that’s not really the reason though, for them, being rich doesn’t mean their purpose in life have ended already.
There’s more to life to explore and be. And that’s how life should be lived. Aim for Financial Capability for it takes away the stress you’ve always hated doesn’t give your mind and body the impression that you’ll live like a vegetable in the days to come. In fact, there’s much more you can do!
Now here’s the fun part, some tips to live by in life for you to align your lifestyle with the future you want to be in. Here are some tips that would lead you to Financial Freedom:
1. Live within your means
Knowing that the people around you are too busy to look at you would probably help limit you from showing off. More and more people are living in debt just to sustain a lifestyle they’re not capable with. Live a simple life and with more truthfulness to yourself and that’s where you’ll find your happiness if not, inner peace.
2. Be mindful and aware of your situation
When was the last time you’ve checked your finances in the bank? Being aware where your money goes helps you better plan and be conscious of your spendings.
3. Do your homework. Know more where you can put your money, make it work and benefit from it.
It is not a secret that rich people didn’t get rich by working their a$$ off. Instead, they are wise enough to know where to put their hard earned money and make it multiple without much work. Yes, I’m talking about investing. There’s different ways to do it and that’s why it’s called a homework. We don’t do spoon feeding here. A little words of wisdom though, “If they can do it, why can’t you?”
4. Plan your way of saving.
Too much work and saving for the future can take a toll on you and your body. That’s why I recommend to plan how you save. This way, you’ll know when you should and when you can give yourself a break from saving and instead use it as an award for working so hard. Everybody needs some time to reinvigorate. Know that it’s after much needed rest that you usually come back stronger.
5. Take care of your credit score.
Take your Credit score is like taking care of your family name. Being in debt isn’t what anyone would wish to be in a position with. so being mindful of your responsibilities with your usage of credit cards and paying up loans is really a need. By trying to keep you name clean also means your finances are being kept well managed.
6. Monitor your spendings
Do you record your spendings? Or you just make calculations in your brain and hope that everything will simply fall in place with an extra of your salary as your savings. Mental calculation can be a great skill to have but in reality, with your plate so full with other responsibilities, the last thing you want is to forget that you don’t have enough money to buy food for the coming week and your salary only comes in 2 weeks from now. Believe me, it only takes 5 minutes to write down your expenses for the day, do basic calculation and that’s it! Make it a habit to do everyday and you’ll always know where your money goes. Plus, writing this down also means freeing your brain some space to use to focus on other more important things.
7. Slowly change the way you budget
This comes together with #6 in this list, “Monitor your spendings”. Being mindful on your spendings would show loopholes on your budgeting and make you realise where you could do some adjustments. This way, you’ll know that you’re spending where you really need to and all unnecessary spendings can be allotted for better things.
8. If you have debt, make sure it’s a good debt. If not, make plans to pay them off, as soon as possible.
Misconceptions about debt has been embedded to most of us. In fact, most of us believe it is a negative thing. A few knowledgable ones though know how to take advantage of debt.
9. An emergency fund is essential.
It is important to know that even if we don’t see a rainbow that often, there’s always tomorrow to look forward. That’s why knowing how to balance your finances for current necessities, saving should also be valued. We all don’t know what tomorrow would bring and it would keep our worries away if we know that an emergency fund is kept in case needed.
10. Career choices
One step to reaching Financial Freedom is being able to do something in life that you truly love doing that pays. As mentioned earlier, being tied up like a prisoner of your job just to keep you financially afloat ain’t gonna give you any good. Not only would you let your life fly by beneath your nose but you’re likely to regret not having the courage to use your lifetime to do something you love.
11. Learn how to invest
As risky at it can be, investing is still considered one of the best things you can place your hard earned money if you want to make them grow faster. Gone are the days where people just leave their money in the bank to earn interest. You are wise enough to know that bank interest barely make any difference to your money nowadays. It’s safe to say that keeping money in bank is just a way of safekeeping as it isn’t also safe to carry much cash around. By keeping an open-mind and gaining knowledge on how to invest, you’ll surely find one that would fit your interest.
12. Do something that has value, that would be your legacy.
Making a lot of money not only for you but for you to be able to pass as inheritance to your successors can be a great kind of legacy. But not everyone has the capability of doing that. Don’t worry though, legacy doesn’t only mean inheritance of wealth, it can also be other things. Do something great in your life and not only your family would remember you but more people you’ve helped.