Steps to Gaining Financial Freedom

As you may already know, financial freedom is not easy. The best thing about the principles to gaining this is that they apply to anyone regardless of where they are on the socioeconomic ladder. It does not matter whether you are a single person or have half a dozen children or whether you earn minimum wage or six figures because the principles below are not based on income level but rather on the decisions we make with the resources we have. These will only work for you if you have decided to make outstanding financial changes in your life.

They say money is the root of all evil… well; it is like a drug, if you use it medically, it will help your body. If you abuse it, it will abuse back, bad. People tend to never have enough money. Even the richest people in the world seem to always want more money because what they have is not enough.  Money can only cause you much trouble if you do not know how to manage it. So how do you manage your money? You budget, invest, eliminate debt, minimize, and contribute.

But first, you must get one thing straight; taking control of your financial life has nothing with you adjusting your income upward but rather, with you changing you financial habits, and using the resources you have to constantly make repeated good decisions.

Budget: do you know where you money goes? You may think that you know, but do you really know? Especially for those who are married. The first step to financial freedom is by having a written monthly budget. For you to write a budget that will work for you, you need to establish your spending categories i.e. Need, Want and Like. Identify all your monthly expenses for the last six months and categorize them then prioritize. You may be able to cut back on some expenses by doing this. Set boundaries at the beginning of the money and allocate each dollar its destination. This will keep you from worrying on what to purchase and not what not to purchase since money that wasn't assigned at the beginning of a month can’t be spent in the middle of the month! Make sure you do this as a team; involve everyone in the household including the children so that you are all on board. It is okay to have some slip-ups along the way; you may just need to adjust until everybody in your family is comfortable with the set monthly allocations. A perfect budget must always have a Safety Net Savings account. This is money you use only on real emergency situations. If you are disciplined, this is money that can save you even when life punches you on the face

Invest: Most people panic when they hear the word invest. Well, instead of looking at it as something you cannot wrap your head around, think of it as paying yourself in the future. Anyone and everyone can invest especially with today’s online tools. Talk to people who have made good investments and do your research. You never know, you may just turn into a billionaire.

Be Debt Free: there is nothing like good debt, do not be deceived. When you have a debt you become a slave to the lender. You cannot free until you clear your debt. So do not take any more debts and clear what you already have.

 

Minimize: one of the key components to financial freedom is minimalism. This is done by eliminating debt, making better decisions with fewer resources and changing financial habits. One way of minimalizing is by getting rid of material possessions that are not adding value to your life. And no, do not throw them away but rather sell them. There are many avenues for selling stuff nowadays.

Contribute: appreciate what you have; it may change your perspective of your finances. The greatest contribution you can make is by donating the most precious asset in your possession: your time. Help out in the homeless shelter, food bank, be a volunteer and contribute to someone else’s life. It will make you appreciate what you have.