Financial freedom is much more than just getting cash. It is the independence to remain who you are and do what you want in life. But achieving financial freedom is not as easy process. By developing specific habits, one can achieve financial freedom.
We all know that money is the only thing which makes the world go round. Financial freedom means self sufficiency or having sufficient savings and money in hand to pursue your enthusiasm, making decisions not affected by your bank account and living on your terms. Financial freedom is much more than just getting cash. It is the independence to remain who you are and do what you want in life. But achieving financial freedom is not as easy process. By developing specific habits, one can achieve financial freedom.
The very first step to achieving financial freedom is figuring out where you are before thinking about where you want to be. List down how much you should save in your bank account, what the lifestyle entails and at what age this will be accomplished and then establish financial mileposts at regular intervals.
Establishing a written budget and sticking to it is the best way to achieve financial freedom. Try dividing your monthly expenses into three divisions: Essentials, Non-essentials and Junk. Track down your expenses and select categories to prioritize and cut wherever you can.
The next step is to be self sufficient or earning enough to live on your own and being able to provide for oneself. Once you have saved 6 months of your living expenses, you will find enough room to breathe. Recent research suggests that at this point of time, around 37% of people can handle an unexpected emergency of $1000. Next, you should indulge in saving up a year’s expenses with which you will feel rooted.
While saving up your yearly expenses will give you protection from unforeseen incidents, by saving up your two year’s expenses, you can be flexible with how you want to live. Achieving financial freedom is having sufficient money to protect you for the rest of your life.
Financial independence can be achieved by two ways. One is to save more than a million dollars and then living off the investment interest forever and another is investing in income generating assets like real estate which pay back a considerable amount of money.
Financial freedom cannot be achieved overnight. With each passing year, your financial stress will decrease and your options such as where you live, where you work and what you drive will increase.