How to achieve Financial Freedom
What is financial freedom?
Financial freedom typically entails having enough savings, investments, and cash on hand to afford the lifestyle we want for ourselves and our families. It entails amassing savings that will allow us to retire or pursue the career of our choice without being constrained by the need to earn a fixed salary each year.
What is considered financial freedom?
Financial freedom does not always mean being wealthy and having a lot of money; it also means having control over your current financial situation and future. To give you an example, there are eight different levels of financial freedom.
1. Not having to live paycheck to paycheck
It means you have an emergency fund set aside for unexpected expenses.
2. You have enough money to quit your job (for a bit)
Your vacation expenses must be covered by your savings.
3. Financially content while still saving
You are content with earning enough money to do things you enjoy while also saving money.
4. Time independence
You leave work in peace to pursue your interests.
5. Enough for a bare-bones retirement
You adjust or reduce your living standards in order to retire early.
6. Enough to live comfortably in retirement
You have amassed sufficient assets and/or passive income streams.
7. Enough for a fantasy retirement
You get to enjoy the pleasures of traveling the world and spending time with family and friends.
8. You'll have more money than you'll ever be able to spend.
Your riches sustains you, or you have enough money to last a lifetime.
Many people want to achieve financial independence. It generally entails having enough savings, investments, and cash on hand to afford the lifestyle you desire for yourself and your family—as well as a growing nest egg that will allow you to retire or pursue the career of your choice without being constrained by the need to earn a certain amount each year.
Sadly, so many people do not succeed. They are burdened by mounting debt, financial emergencies, frivolous spending, and other issues that prevent them from achieving their objectives. There are unexpected events, such as a storm or earthquake—or a disease outbreak shake up plans and reveal previously unseen gaps in their safety nets.
Here are the steps to financial freedom
1. Set financial goals in life, both big and small, financial and lifestyle, and formulate a plan for achieving those.
2. Create and stick to a budget that meets all of your financial needs.
3. Pay off credit cards in full to carry the least amount of debt possible, as well as pay attention on your credit.
4. Set up an emergency fund and set up automatic savings through your employer's retirement plan.
5. Start taking care of your belongings since maintenance is less expensive than replacement, but more importantly, look after yourself and stay healthy.