Financial Freedom And How To Get There In Five Simple Steps.
What comes to your mind when you hear the term “Financial Freedom”? The term Financial Freedom may mean different things to different people. It is a little hard to come up with one simple definition for it.
Financial freedom may mean being able to pay bills every month and being able to put food on table for some. It may mean being able to afford small luxuries in life for others. It may mean living a luxurious life without ever having to worry about money for a few.
If you really think financial freedom runs deeper than mere having a lot of money or just being wealthy. It is the freedom of being true to yourself and doing what your heart desires without having to worry about the money.
But, that kind of freedom is likely to be out of reach for most common people.
It is kind of ironic.
When you are young you have a lot of time on your hands to do what you want to do, but you don’t have money.
Later in life you have money but you don’t have time because all your time is spent earning money.
And when you are old you have time and money but you don’t have enough energy to do what you want.
Is this how it was meant to be?
It is like a formula. Go to school in order to get a good job. Work 40-60 hours a week for 40 years. Hope to save enough money for retirement. That is when you finally get to live your life the way you want.
Sadly, many of those people who have the dream of living their ideal life in retirement are not on track to achieve that goal.
I come across people who dread their jobs. They literally live for the weekend. Throughout the year they look forward to two weeks of vacation.
A lot of people don’t outright dread their jobs but look at them as a means to an end. For these people it is a way to pay their bills and make a living.
Then there are a very few people who actually love their jobs. What they do for a living what makes their hearts sing. They don’t ever want to retire from their jobs.
Unfortunately there are very few people in that third category.
And, unless you are one of them you need to take a second look at your work life situation.
There is no point living majority of your life in a hope that someday you will be able to do what you really want to do.
So, how do you get there?
- Know Where you stand
Look at your complete financial picture. Track expenses and income. That will help you understand and identify pitfalls in your financial situation. Create a budget and stick to it.
- Start Saving
Once you get the sense of your financial picture the next step should be to start saving. Do this by paying yourself first. It is best done by automating this process. You can do this easily and effortlessly with most banks.
Having savings to fall back on will be your security blanket. You may have to make some sacrifices now and cut corners in order to save. You may even have to work a job you don’t particularly enjoy.
- Create an emergency fund
Nothing derails your life and plans than an emergency you cannot pay for. Emergency fund will give you the ability to sleep at night without having to worry about any unexpected expenses. It will form the strong base for your goal of financial freedom.
- Manage Your money wisely
Once you have some money saved, in excess of the emergency fund, invest it wisely and keep adding to it at regular intervals. Don’t hesitate to get paid advice but at the same time don’t be a passive bystander. Get involved in management of your money. After all it is your money and nobody is going to care about it as much as you do.
- Start a side hustle
Use your expertise, talents or hobbies to start a side hustle or a gig. Which will not only bring in additional money in the beginning, but you can grow into a full-fledged business later and help you get out of the corporate rat race.
If you ask me, financial freedom would be maintaining our current lifestyle without having my husband or me working a full time job. In other words having the freedom to do to what I like, being able to spend time with loved ones and not having to slave away at a 9 to 5 job for it.
For me financial freedom means being able to travel extensively, not a week or two vacation. Travel to different countries and spend a few months there and experience the culture and beauty of the place.
I don’t want to spend most of my life tied down in one city or a country.
This is definitely not something you can do with a traditional full time job.
I am not quite there yet, but getting there. We have been working towards it for a few years now, and it does take time. Patience and perseverance is the key here.
What does financial freedom mean to you? Have you ever given it a serious thought? Have you ever taken any steps to get there?
Let me know in the comments.