Attaining financial freedom is the dream of many people. As much as they want to earn more money, having the time to enjoy life and spend that money is also important.
If like many others, you too wish to achieve financial freedom but do not know exactly where to begin, I have listed 9 very simple and basic steps you can do here to get started. It’s really starting these beginning steps that gets the ball rolling. Here goes!
1. Add Up All Of Your Debt
The first step of attaining financial freedom is to firstly, have a clear idea of where are your debts and how much they amount to. The fundamentals of having financial freedom is to be free from debts and liabilities (or at least reduce them gradually).
2. Identify Where Your Money Is Going
Next, you will want to start keeping records of where you are spending your money on. Trust me, every small expenditure counts because they add up to a lot. Having that $6 fanciful cafe coffee everyday? That’s $180 is a month, and almost $2200 in a year!
3. Determine If You Are Actually Making Enough Money
Are you earning more than you are spending and having surplus to save and invest? Or are you just making ends meet, with debts to clear? You need to be having extra for investing, and that’s how you start making money work for you.
4. Identify Your Bad Attitudes And Habits
Bad attitudes and bad habits really drain your finances slowly but heavily. If you are negative, and always resort to drinks and smoking to alleviate your mood, then these are actually also key areas where your money is going towards and those are not cheap!
5. Be Brutally Honest About Where You Can Cut Back And Stick To The Budget
Touch your heart and make a list of what expenditure are for “wants” and what are for “needs”. You really have to start removing the “wants” and channel those money to investments.
6. Pay Down Your Bad Debt
These debts really have to be cleared, the sooner the better! Debts accrue interests as well and that sum is gonna grow and just keeps draining your finances. You rather have your money in investments or high rate of returns type of savings accounts!
7. Build An Emergency Savings
If you are just making ends meet, you are in bad shape. You need emergency funds for when the days get rainy and your income might become affected. These emergency savings will tide you through the rainy days so that you do not have to get yourself into more debt.
8. Invest Wisely
Learn to make money work hard for you. Aim for investments with good rate of returns and dividends. Do your due diligence and know the difference between investing and speculating or gambling.
9. Teach Your Children How To Handle Money And Stop The Debt Cycle
We all know children from wealthy backgrounds tend to have an edge in life because the finances from the family will already be able to bring them different opportunities compared to their peers who are struggling. With that in mind, teach your children the importance of how to handle money so that they don’t squander yours away, and can eventually build their own wealth too.
Remember these 9 steps and start implementing them gradually starting from now!