The term “financial freedom” is thrown around regularly, but few people are aware of the true meaning of the practical steps needed to accomplish it. In this article, we give you a head start by outlining some of the basic tenets of financial freedom and some strategies to get there.
Set Realistic Goals
Financial goals look different to different individuals and families, but one thing all financial freedom seekers have in common is the ability to turn abstract ideas into concrete realities. Before you can find financial freedom, you need to work out what that freedom looks like.
Most people want to live a comfortable life, feel secure, and have enough free cash to travel and engage in the activities they enjoy the most. Start with your imagination, let it run wild, and find out how much is required to live the life you want. Next, set realistic short and long-term goals.
Change Limiting Beliefs
Everyone experiences limiting beliefs of some kind, they can be around personal growth, career opportunities, or life goals, but often they are situated around financial fears. People work hard because they fear not having enough money, or they don’t believe they can ever be wealthy.
These are all psychological tendencies that aren‘t always rooted in reality, someone might come from a poor background, but that doesn’t mean they can’t achieve wealth. Limiting beliefs can be hard to break, but breaking them is the first step to make on the journey to financial freedom.
Understand Finances
Now that you have the motivation and mindset to generate financial freedom, it’s time to take a long hard look at the numbers. Chances are you’re thinking about financial freedom because it’s something you don’t have already, so take some time to understand your financial challenges.
It doesn’t matter where you are starting from; if you have the right mindset, financial freedom is possible. Start by researching Debt Help to manage any unsecured debt, then look into savings solutions. It’s a good idea to arrange a lifestyle budget at this point and start to integrate it.
Savings Strategy
Financial freedom can’t happen without saving, but before you save, you need to get out of debt. When you are free from debt, you have extra money to play with; this need to go into an emergency fund. The emergency fund is for unexpected events and medical costs on the way.
An emergency fund should be able to cover you for six months of basic expenses. Getting to this point is a milestone of your journey; after that, it’s all about accumulating wealth to live your dream life. Now you have an idea of the process; it’s time to build a financial freedom machine.
Build the Machine
A financial freedom machine consists of three buckets, a security bucket, a risk and growth bucket, and a dream bucket. Set up a bank account for each and separate your wages into them. It’s a good idea to talk to a professional about your investment growth bucket as well.
