This is a contributed post and contains affiliate links.
While money can’t guarantee to buy you happiness, it can certainly save you stress when it comes to making big life decisions. With that being said, achieving financial freedom doesn’t have to equate to being extremely wealthy – it can instead be viewed as a solid plan of action to take in creating a secure future for yourself and those that you hold closest. The good news is that you can start to make changes today: here are 7 steps to take to begin your journey to financial freedom.
1. Reflect on your Financial Behaviour
Acknowledging what you have done right and where you have gone wrong with your finances is one of the first steps you should attempt to take. To truly understand where all your money goes, it’s crucial to know exactly what you consume and how much it is costing everyday. Try to identify particular financial areas that need improving in your life – this could include your self-discipline with money, or reflecting on your budgeting skills. This way, you can start to make changes that will positively impact your financial position in both the short-term and the long-term.
2. Set Life Goals
Take time to soul search and pinpoint what you really want out of life by creating a list of goals. Once you’re finished, attach timelines, and where possible, the costs that will be involved. Achieving financial freedom won’t just happen by itself. While it’s only natural to hope for success to come quickly, remember to be accurate and realistic with what can be achieved within your chosen timeframes and budgets. For the best results, focus on specific money goals that motivate you and try to embed a positive mindset while attempting to achieve them.
3. Change Your Relationship with Money
Money can undoubtedly play with our emotions – one of the primary reasons as to why people struggle to find financial freedom is because their relationship with money is pessimistic. As thinking negatively about money can be an emotional obstacle, you should try to eliminate it as soon as possible. By changing your perspective and relationship with money, you will attract more opportunities and open up more doors than you may have ever thought was possible.
4. Organize Each Day in Advance
Financial freedom has to be something that you specifically think about, define, and plan for continuously. Planning each day, week and month in advance will allow you to focus on your finances and give you a greater sense of control. Creating a household budget and sticking to it relentlessly means you’ll be able to track your spending habits and decide where you’re able to realistically save. This can be a great routine that reinforces your goals and can help to block the temptation of splurging your hard-earned money on unnecessary items. Remember, what you focus on the most and spend the most of your time doing should be in direct alignment with your financial goals.
5. Invest in Yourself
Making the decision to invest in yourself in terms of your own self-improvement and personal learning can greatly support your chances of quicker financial freedom. This could include the likes of listening to podcasts, purchasing courses on time-management or self-discipline, reading books, or finding online resources about money, how to earn more of it, or how to get out of debt such as at www.dtss.us. As you begin to acquire more knowledge in the area of finance, you will become more confident with your spendings and will be prepared in avoiding any money related pitfalls.
6. Create an Emergency Fund
When setting up an emergency fund, the golden rules are to save up as much as possible and keep it separate to your main bank account. Instead of borrowing money or using a credit card to drag you further into debt, an emergency fund will be there for whenever life hits you with an unexpected situation, such as paying for repairs if your car breaks down or for any unanticipated large bills.
7. Plan to Pay off Debt
While being in debt may be beneficial in some cases, such as improving your credit score when it is eventually paid off, it can seriously dent your account and restrict your ability to spend and invest your money. Make clearing off your debt a priority – this can be achieved by categorizing each loan based on the interest rate, and paying off the highest first. Alternatively, you can try tackling the small loans first which can provide you with the momentum to pay off the larger ones in due time.