(Akiit.com) Financial freedom can be achieved by almost anybody if they want it enough, even if it does seem like something you’ll never be capable of doing. There are numerous things you can do to ensure you work towards the ultimate goal of financial freedom, but it means delayed gratification now so you can enjoy your life more in the future.
Below, you’ll find 14 things that you must do to become financially free.
1. Know What Financial Freedom Means To You
Financial freedom may mean different things for different people. However, at its very core, its making enough money to cover your bills and expenses without having to work (or at least work very little). This means building wealth from now on, rather than trying to make money. If you keep on swapping your time for money in a regular 9-5 job, it’s highly unlikely you’ll build the wealth you need to become financially free. The money you earn will be finite and you’ll stop earning upon retirement.
Write out your ideal future so you can come up with goals and then feel motivated enough to take the rest of the steps in this guide.
2. Start Budgeting
Budgeting means you need to track your spending accordingly. You should know how much money you have to spend on things like bills and track everything you spend so you are always aware of your finances. If you only look at your budget occasionally, it’s all too easy to ignore it and stray from it. Keeping an eye on your budget and holding weekly or bi-weekly money meetings with yourself can seriously help you to stay on track. Also keep a lookout for any unnecessary expenditure, for instance, if you are part of a timeshare that you rarely use, research timeshare exit companies that can help you get out of your timeshare and stop your future maintenance fees.
3. Spend Less Than You Earn
If you want to become financially free later, then you need to make sure you’re spending less than you earn now. This is why knowing your numbers and keeping an eye on your budget is so important. If you’re spending everything you earn, even if it’s not a penny more, you need to make a change. You should be spending less than you earn so you keep money in your bank, and have enough left over for things like your emergency fund and investing.
4. Build An Emergency Fund
On the subject of emergency funds, making this your priority will ensure you don’t need to go into debt should an emergency occur. Your car might break down, you might injure yourself, or something else could happen costing you a lot of money. Providing you have an emergency fund, you will be able to pay for emergencies without going into debt. You’ll also have peace of mind, which can be great for your wellbeing. Having one months living expenses is a great start, but you should aim for a minimum of 6 if you want to be properly protected.
5. Start Investing
Investing is one of the only true ways to build wealth. If you want to become financially free, you need to invest. Saving money is great and can get you out of trouble in an emergency, but it won’t bring you wealth. In fact, money depreciates over time, whereas investments can appreciate (providing you make the right ones). It can be tough to know what to invest in, but that’s why there are apps dedicated to helping you get the hang of it. Even investing 15% of what you earn can make a big difference to your life in the future.
6. Eliminate Your Debt
Debt will always weigh you down – you’ll never be financially free while you have debt. Paying it off can finally take that weight off your shoulders, even if it is easier said than done. If you’re in severe debt, visiting a place like McCarthy Law Debt Settlement Law Office can give you the advice you need to go forward with confidence and turn your situation around. Once you’re out of debt you can focus on saving money, investing, and everything else it takes to become financially free.
7. Trim Your Expenses
By trimming your expenses you can easily have more money to save, invest, and put towards your goals. Below are some examples of what you can do:
- Switch bill suppliers
- Get a cheaper phone deal
- Stick to a list when you go shopping
- Cut out purchases such as takeaway coffee (they really add up)
- Bulk cook your meals
- Take your lunch to work
- Switch to unbranded products in the supermarket
8. Create Passive Income
Passive income is one of the most popular ways you can build the wealth you need to create a better life for yourself. Passive income can be achieved in numerous ways, such as:
- Writing Ebooks
- Building a dropshipping business
- Becoming an affiliate
- Making YouTube videos
There are so many ways you can start building passive income – just keep in mind that it’s rare to find something 100% passive. You will need to do work initially in order to make money while you sleep. Writing an Ebook can take a lot of work to start with, but as people buy it, you’ll make money for it again and again.
9. Read Financial Books
Reading financial books will help you improve your financial literacy, teaching you everything you need to know about limiting beliefs and what you have to do to get closer to financial freedom. Even if you set a goal to read one or two a year, in a few years, you’ll be so much more knowledgeable.
If you don’t feel like you have a lot of time to read books, you can always listen to them using a platform like Audible. This means you can learn while you commute, cook, or do just about anything else.
10. Figure Out What’s Holding You Back
There’s usually something that holds us back from financial freedom, whether we know it or not. Many people are afraid of being financially free, so they resist it. They may not realize this, however, with a little introspection they discover it to be true. For example:
- You may worry about being more successful than your parents
- You may worry about people trying to take your money from you
- You may worry that you’ll have ‘mo money, mo problems’
Again, these things are not always conscious, so it’s important to examine your beliefs and what could be true.
11. Visualize
By visualizing yourself as a financially free person, you can begin to shift your identity into that very person. You will be able to see your life as you want it to be, and see yourself as you want to be. This will help to keep you motivated and seep into your subconscious so you continue working towards this goal. It might seem woo-woo, but people like Tony Robbins recommend visualization all the time. The brain can’t tell the difference between something that is real and something that is imagined, so make the most of this and see yourself in all your glory as a financially free person!
12. Get Insurance
Insurance will protect you should you lose earnings, fall ill, or die. It’s another way to achieve peace of mind. You won’t need to worry about expensive medical bills, for example, when you have insurance. A huge medical bill could easily mean undoing years of hard work towards financial freedom, making your goals seem out of reach again.
13. Be Careful Of Who You Spend Time With
The people we spend time with can influence our lives, actions, and beliefs more than we realize. If you’re constantly spending time with people who spend money irresponsibly, hold on to negative beliefs and just aren’t a good influence on you in general, it could be time to cut your ties with them. If you can spend more time around people who are good with money and wealthy, then you are far more likely to become wealthy. Obviously you shouldn’t just drop the people who matter to you, but it can be a good idea to avoid participating in conversations around money or going shopping with them if you know it will bring you down.
14. Practice Minimalism
Rather than aiming to be financially free because you want more stuff, try to enrich your life with experiences instead. Practice minimalism and it’ll be so much easier for you to become financially free. Keep your wardrobe to a minimum by turning it into a capsule wardrobe, and buying quality items that last. Don’t fill your house with needless junk and things you don’t use. Find the joy in other things. At the very least, you’ll get to know a lot about yourself and learn some valuable lessons!
If you aim to incorporate the above 14 things into your life, you’ll be well on your way to becoming financially free. It may take years to achieve, but the sooner you start, the better. You’ll be so glad you set out to do this when you have more time to yourself, to spend on your hobbies, and to spend with those you love!
Staff Writer; Ricky Ford