We define financial freedom differently. And it’s because we all have different relationships with our money. For some, being financially free means being able to pay the bills with some money left to spend on rest and recreation. Others, like Generation Z, not reporting to full-time work and retiring early with more than enough money left in savings constitute financial freedom.
This economic independence that we all want to have may look a bit different, from one individual to the next. But the common denominator of every definition is control, the freedom to choose and do what you wish.
Regardless of how you define financial freedom, this 5-step formula will help you materialize your vision for the future!
Set your financial goals
Start by thinking about the goals that will require financial spending or support. These can either be short-term plans such as going on vacation, as well as long-term ones like retirement.
Track your spending
For most people, setting aside money for emergencies and retirement can seem a bit challenging, especially if you’re living from paycheck to paycheck. It will help if you find out exactly how much you spend on a monthly basis. Write things down!
Create a spending plan
Write a budget or a plan that outlines where you spend your money on every month. When doing this, it’s important to take into account whether the items you list will bring you closer to achieving your financial goals. So, it’s like doing an inventory of things you need and don’t need.
Discover and try out more streams of income
Let’s face it, your 9 to 5 might not be enough for you to materialize all your financial goals. It’s okay to look for other streams of income or other sources of money outside your current job. Today, there are numerous side hustles and home-based businesses you can try out but make sure you partner with a reputable company or individuals who can help you achieve long-term financial growth.
Invest in the future
It’s always important to set money aside for rainy days, retirement, and family or personal emergencies. Remember, debt has no place in a financially rewarding life. Grow your savings so you can be prepared for anything.