Whether you’re straight out of college, salaried individual or businessman, financial freedom is at the top of wish list. Money issues often lead to several sleepless nights. Financial freedom is an integral part of a well-planned life. It accommodates emergencies and life surprises with relative ease.
What does financial freedom means to you?
For some, financial freedom could mean, the ability to retire early or to quit their desk job to follow their passion or as simple as being able to take their dream vacation without worrying about the cost. Some think Financial freedom means spending the way you want, whenever you want to. While different people have different aims, financial freedom essentially allows you to live your life on your terms, for things and people you love. It means making the sensible choice about what to spend on and what to skimp on so that you can save enough for a future Needs. That choice could vary, depending on personal goals. Whatever it is, Financial independence is the first step towards a more responsible and productive future.What stops you?
While financial freedom makes it to most people’s to-do list, few can achieve it. That’s because a majority of people don’t take it seriously enough to plan their lives around it. Most people begin the journey to financial independence with good intentions but lose their determination when they see the obstacles of budgeting and planning. Many people also misbelieve that middle age is appropriate to start saving, when in fact, the best time is when you’re young enough to afford a few hiccups to your plan.How to achieve financial freedom?
The path to financial freedom is not quick easy; however, with the right strategies, you can be assured of long-term benefits. Starting out can seem intimidating, especially if you don't have fair understanding on how things work and complexities in the personal finance arena.Cash flow Management
Your, First Step towards Financial Freedom Starts by learning how to manage money. When you receive your paycheck and find some excess cash flow, it’s easy to get carried away by dreams of designer clothes and Caribbean vacations.
The important thing is to start budgeting and stick to it. Budgeting doesn’t mean skimping or living like a miser; it’s more about cutting corners you can use so that you can save for a bigger dream. Ensure that you and your partner have the same financial goals to prevent misunderstandings on financial terms.Protect your interest:
Be it your personal finance or business, the first rule is, protect first. One medical emergency, an accident, job loss, business slowdown may derail your casual approach. Insurance is easiest method to mitigate huge financial risks. Insure your life, health and assets.Clear high-interest Debts first
It’s vital to clear high-interest debts first before start investing. By clearing debts, you can be assured that your future can be written on a clean slate. Without liability to slow you down, you can take home all of your hard earned money, instead of the bits and pieces that are left after paying the debt. Once you’ve reached that stage where you’re debt free, make sure to let it stay that way. Liabilities can seriously derail your progress towards financial independence.Make Smart Choices
There are two sides to every coin. In personal finances, they are Income and expenses. Financial independence is all about smart choices. Concentrate on increasing income, preferably passive income streams. Protect your assets, minimise tax obligation, and stick to asset allocation.Ensure you have short-term savings
Another mistake that most people make when planning their finances is not thinking of short-term savings. You might be forced to pull the plug on that much-awaited dream vacation due to a kitchen pipe burst or an urgent medical surgery that eats into your savings. It’s essential to strategically plan for short-term savings. What you need is a buffer in the form of an emergency fund that can fund up to three to six months of expenses. Having a backup fund to prevent you from digging into your long-term saving not just gives you some peace of mind, but also the freedom to splurge on something a little extra now and then.Go for Long-Term Savings
For your long-term goals and needs, investment is the best way to make your money grow. Savings, Investment, insurance are different things. Do not mix up insurance with investment. There are plenty of investment options to explore that vary by risk and returns. Growing expenses (inflation) and tax obligation can make a massive dent in your investment corpus. It’s best to consult a financial advisor who can make a tailor-made plan to ensure that your money grows the best aligned with your risk profile.
A financial advisor can help you with proper asset allocation for your short, medium and long term goals. Financial planners always suggest tagging your investments with goals. This simple action manages our emotions to a greater extent.
Education has also become increasingly expensive and creating a college savings account could be the best gift for your child. By saving up for your child’s college education, you can steer clear of high-interest student loans and thus have them graduate debt free.
Having your own house is considered as the ultimate dream among most families. Having your own house spells security and comfort. While buying or building your own home, it’s important not to get carried away. Invest in a property that comfortably meets yours and your family’s demands without breaking your bank.
Stress-free retirement tops the goal priority now. It’s advisable to know about the type of retirement savings accounts and options available as a part of your company policy and thus help you make the most out of them.Make it as a Habit – Never lose your spirit
The critical step to financial independence is consistency in active participation from your end. After a few years of, people often get bored with the whole idea and splurge unwisely. This sort of one-time break from habit can have disastrous effects. Even if a financial advisor is overseeing your investments, be proactive and show interest in finding out where your money is.
Failure is considered as the stepping stone to success. Allow yourself to make mistakes instead of quitting the first time one of your ideas go wrong. One of the most fundamental things has a structured plan that covers most, if not all aspects of your life.Engage an Advisor
Many people make the mistake of forgoing professional financial help and then realise that they have too much on their plate. A financial advisor will educate you on personal financial matters, devise a strategic plan and review to achieve your goal of financial freedom as painlessly as possible. Professional advisor will consider all important parameters like your goals, time line, your risk profile, ideal asset allocation, tax implications and other external factors. Fiduciary advisor ensures your resources working for you by putting your interest first. Don’t skimp on this step for fear of paying the advisor. The returns will be more than worth the costs.Say Yes to Financial Freedom - Say yes to a Fruitful future.
The road to financial independence is indeed full of complicated choices that need to be handled efficiently and smartly. Many people give up after the first time they overspend. Don’t be harsh on yourself. Instead, motivate yourself to set more realistic goals that you can achieve and thus receive a much-needed confidence boost. Financial freedom doesn’t require drastic sacrifices; instead, it calls for simple lifestyle changes and economic decisions that give significant returns. Financial independence has the power to empower you to live life on your terms and accommodate for emergencies so that you don’t break a sweat when life throws an unplanned event at you. Say yes to financial freedom, say yes to a fruitful future.