Dymystifying Financial Freedom
Financial freedom. It can sound like a nice theory. But the truth is, it’s possible for anyone to achieve. And I mean anyone – even someone who once had hundreds of thousands in loan debt. No matter what financial troubles you have today, there’s always a way to get back to black.
Financial freedom is about taking ownership of your finances, having a dependable cashflow that allows you to live the life you want. It's about not worrying about how you'll pay your bills or sudden expenses and not being burdened with a pile of debt.
It’s about recognizing that you need more money to pay down debt and maybe increasing your income with a side hustle – we’ll get to that in just a minute. It’s also about planning your long-term financial situation by actively saving for a rainy day or retirement.
8 Game-Changing Financial Freedom Tips
1. Understand Where You’re At
You can’t achieve financial freedom without knowing your starting point. Looking at how much debt you have, how much savings you don’t have, and how much money you need can be a depressing reality. But this is a valuable step in the right direction.
Compile a list of all your debts: loans and any other debt you may have accumulated. Don’t forget to include any money you may have borrowed from friends or family members over the years. Now, take a deep breath. And another one. Then add up all the numbers.
How much debt do you have?
If it’s a big number, don’t freak out, I promise I’ll share some ways to pay that down later in this article. If it’s a small number, congratulations! Feel free to share your financial freedom tips in the comments below.
Next, take a look at all the money you have saved up.
Compile a list of all your savings and investments: savings accounts, stocks and retirement/pension plans etc. Then add the recurring monthly payments you receive such as salary, side hustle money, and so on.
Keep these numbers in mind as we work through the next few financial freedom tips.
2. Look at Money Positively
Debt can definitely be a little bit discouraging. But remember that money is a good thing, even if it seems to carry a lot of burden right now. Money is simply a necessity like food or water. It helps you buy the things you need and live the life you want. To experience financial freedom, you’re going to need to look at money as a tool to help you achieve your dreams, fuel your energy, and live a stress-free life you can enjoy.
Because if you view money negatively, you’ll subconsciously sabotage your chances of making it and keeping it. You deserve to achieve financial freedom.
3. Write Down Your Goals
Why do you need money?
Do you want to get rid of debt for good? Are you desperate to escape the 9-to-5 grind? Is there a place you’ve always wanted to travel to? Do you need to save for a wedding, kids, or retirement? You should tie your financial freedom journey to an emotional goal. As you smash these goals, you get motivated to do more.
You might not accomplish everything you want in a month. But a year is a long time to make progress on your goals. Make sure your goal is tied to a specific number that you want to hit. Believe it or not, you’ll start working towards those goals without even realizing it.
Knowing exactly what you want to achieve makes achieving financial freedom a million times easier.
4. Track Your Spending
An important step toward financial freedom is tracking your spending.
You need to know how much money you’re spending, which categories you’ve overspent in, how much money is in all of your accounts, and how much debt you have.
5. Spend Less
In 1958, Warren Buffett purchased a five-bedroom home for $31,500 and hasn’t moved out of it since. His net worth? An astounding $90.3 billion. He can afford a bigger and more expensive home. But his frugality might very well be the reason why he’s one of the world’s richest people.
Kanye West, on the other hand, isn’t afraid to flaunt his money. He lives in a $20 million mansion. And at one point, with $53 million of debt, he decided to ask Mark Zuckerberg for $1 billion… on Twitter.
The difference between the two super successful gentlemen? Buffet didn’t spend more than he needed to, and West spends money he doesn’t have.
The truth is, plenty of rich people don’t look like rich people. Zuckerberg literally wears the same boring t-shirt and jeans everyday.
Buying less stuff can actually help you get richer.
By spending less, two things work in your favor. One, you’ll have more money to put aside for your financial freedom. Two, you’ll learn that you actually need a lot less stuff to survive, which also helps you put aside more money.
6. Buy Experiences Not Things
Life’s short. It’s not about hoarding all your cash until you’re 65. You’re allowed to enjoy life while you’re alive. Ultimately, the things that’ll help you live a more fulfilled life will be the experiences you have, not the products you own. And are the things you buy making you happier over the long-term? Does the debt you have from buying a bunch of stuff make your life easier? Now let’s flip the switch. What’s your happiest memory? What were you doing? Who were you with? Let’s create more memories just like that. Life is made up of moments. The best ones come from quality time spent with friends and family. While some products can help bring you closer to your family (like weekly family video game night) most of them don’t add much value.
Don’t spend money you don’t have to pretend that you have money.
Many Africans are hesitant to negotiate for goods and services, worrying that it makes them seem cheap. Overcome this cultural handicap and you could save thousands each year.
8. Create Additional Sources of Income
Okay, so at this point, you’re probably thinking, “My debt is a lot more than my salary, how can I pay it off if I don’t make enough?” If you’re serious about financial freedom, you’ve got to sacrifice some blood, sweat, and tears. Your 9 to 5 might not cut it. If that’s the case, you need to step it up and look for money outside your current job. Some experts recommend having seven streams of income. If you have a 9 to 5 job, congratulations, you have one, only six more to go!
Now, you can look at your sources of income in two ways: active income (trading time for money) or passive income (money that can keep coming in, even while you sleep).
If you trade your time for money, you’re limited by the hours of the day. Here are a few side jobs you can do to earn an active income:
- Become a freelancer finding jobs on ProBlogger and Fiverr
- Help a business owner as a virtual assistant with jobs on Upwork
- Become an Uber driver
- Start a dropshipping online store
- And more!
If you don’t have a lot of time to devote to earning income, you can focus on increasing your income streams with passive income like:
- Invest in stocks
- Buy properties and rent them out
- Become an affiliate or network marketer with Oriflame, Longrich, etc
- Invest in forex with IntuitFx (Earn up to 10% in 5 weeks)
- Invest in agriculture through online agritech platforms like Farmforte
In conclusion, financial freedom can help you take ownership of your finances and, more importantly, your life. It’s about living within your means, being a bit frugal, and making sure that money is spent on things you really need like food, shelter, and yup even vacations (relaxation is important too, you know). By following the financial freedom tips in this article, you’ll inch closer to achieving the financial freedom you deserve. So take a look at those finances, build additional streams of income, pay down that debt, invest with IntuitFx and before you know it you’ll be free.
Overall, achieving financial freedom can be very difficult in the face of growing debt, cash emergencies, medical issues, and overspending, but it is possible with discipline and careful planning.