Understanding financial freedom is the first step in achieving this goal that everyone is after. Financial freedom is not about spending whatever you want, wherever and whenever you want. It is more than that. It is about having enough money in savings, investments and cash on hand to afford the kind of lifestyle you want. If you do not have great money management skills, no worries. Luckily, by adopting some of these key habits, you will be one step closer to achieving your financial dreams.
Do You Have A Life Goal?
Get specific about your financial goals. Think about what financial freedom means to you, how much you should have in your bank accounts, what that lifestyle looks like and entails as well as what age you want to try and reach this goal. Write all that stuff down. Once you do that, count backward until you get to your current age and determine some financial milestones to achieve here and there before you get to the age of your projected financial freedom.
Make And Stick With A Budget
This habit is crucial to achieving your financial goals. Gather all your monthly expenses and come up with a total number. From there, determine how much you are bringing in and divvy up those funds in order of priority. There are some things you cannot change like your rent or mortgage payment, car insurance and things like that but with those things, you can cut back on, do it! Live below your means.
Pay Off Credit Card Debt
Credit cards are detrimental to your wealth-building process. You want those off your back as soon as possible. Do so by paying more than the minimum monthly balance, and try paying off the balance in full if possible. Even if you cannot pay the full amount or more than the minimum balance, the key is paying on time. Paying on time builds your credit.
Before you spend your money on anything when you get paid, pay yourself first! Put that money you paid yourself into a savings account and watch your money grow right before your eyes. You can do a couple of things like enroll in your company’s retirement plan or have funds automatically withdrawn from your paycheck to an emergency fund. The key is to have this money taken out before you even have a chance to see it. That way you are not missing it.
Do Not Be Afraid To Invest
Investing can seem complicated and overwhelming, but it is actually one of the important keys to building financial freedom. Open an online brokerage account. These online resources make it easy for you to learn more about the stock market, create a feasible portfolio and make consistent contributions to it automatically. When the stock market is bad, it can be easy to think investing is a risky idea, but history has shown that it is one of the best ways to grow your money.
Keep A Watchful Eye On Your Credit
Do you know what your credit score is? There are plenty of ways to find it, but once you do, keep a watchful eye on it. You may have money in the bank, but if your credit score is tarnished it can be difficult to make big purchases like a car or a down payment on a house. The concept behind that is if you are careless with financial habits, you may also be careless in other areas of your financial life. Having great credit will allow you to buy things like a new car, home, car insurance and life insurance.
Continuously Educate Yourself
The most important key to financial freedom is to continue educating yourself. Visit the Debt to Success System and other financial memberships that will consistently give tips and advice on successful money management. Make sure that you are in the know when it comes to the latest financial news and latest developments in the stock market. That knowledge can be used to maximize your profit earnings and other financial investments as you can adjust your investment portfolio according to what is going on in the financial world.
Take Good Care Of The Things You Own
Things like your home, car and clothes are considered your property. Therefore, if you break it, you have to spend money to fix it. That is why taking proper care of your items can save you money in the end. You will not have to spend money on fixing them up or replacing them, and they can last you a long time. You work hard for your money. You do not want to see it going down the drain on your possessions.
Live Below Your Means
This is a big one, but it is also the toughest. Sometimes it can be difficult to live below your means, but doing so will put you closer to living in true financial freedom. Plenty of financially successful people have developed the habit of living below their means before they reached a level of affluence. Living below your means will also make it easier for you to stay on budget. You will be spending on the things you need and not necessarily the things you want. Both of those habits are imperative to developing financial freedom in the future.
Negotiate For Goods And Services
For the money that you do spend on goods and services, give negotiating a try. You never know what the end result will be. It could lead to a significant deal that saves you tons of money. There may be a negative stigma around haggling for the best deal, but if you are giving a company great business or you are buying their products in bulk, it is amazing what speaking up and negotiating for a better price can do.
Financial Advisors Can Help
Once you have reached your financial goals, getting a financial advisor is a great next step. With their knowledge and industry know-how, you will be able to make sound financial decisions. A thorough financial advisor will have you maintaining and making more money to reach your next financial goal.