Financial freedom can unlock many doors and a completely new way of life. But getting there is a multi-step process that requires a strategic game plan and a strong mindset. Here are four practices to help you reach financial freedom.
1. Live Beneath Your Means
To achieve and maintain financial freedom, you must spend less money than you make. It’s as simple as that. Living beneath your means doesn’t mean that you have to live as if you have no money, just that you must spend wisely. Sometimes people get caught up in their lifestyle and buy the things they want before they can afford them comfortably. They justify purchases based on money they plan to make, accounts they hope to secure, or debt they will one day pay off. However, those are bad financial decisions to make. Instead of buying prematurely or leasing haphazardly, be patient and live beneath your means.
2. Pay Down Debt
Debt is one is the biggest roadblocks of financial freedom. When pursuing a life of financial success, the first step is not to add to your debt. You can do this by only purchasing items that you can afford with cash. You can still use your credit card to buy those items (to build your credit), just make sure to pay off your statement at the end of each month. The next step is to pay down your existing debt. This can take time and should be apart of your budget, but with hardwork and dedication, you can get it done.
3. Stick to Your Budget
On your journey to financial freedom, your budget isn’t there to restrict your spending, but to help keep you on track. Because you control your budget, you have the liberty to decide exactly how much money to allocate toward each of your financial responsibilities. A good budget should include an emergency fund, a retirement fund, regular savings, enough money to cover all monthly bills, and spending money. If your budget is too restrictive and doesn’t account for the occasional outing or shopping trip, it may not be realistic enough to withstand your lifestyle, so be honest with yourself. Once you have a budget in place, be disciplined and stick to it.
4. Find a Passion Project to Fund Your Dreams
Find your passion and turn it into your profession. To unlock financial freedom, you’ll need a steady stream of revenue. However, work shouldn’t feel like a job that you have to drag yourself out of bed to complete, it should be a privilege that you get to do. So find your happy place and make it profitable. Your ultimate goal should be to generate passive income (money that requires little daily effort to maintain). So plan ahead by thinking of ways to make it happen.
“Wealth is the ability to fully experience life.”–Henry David Thoreau
Financial freedom grants the liberty to live without boundaries. The few years of sacrifices you’ll make to reach your goals will be well worth the reward. Use these four tips, stay focused on your future, and be prepared to achieve your dreams.