10 steps to financial freedom in 2022
financial freedom. This sounds like a good theory. But the truth is, it can be achieved by anyone. I mean anyone-even someone who used to have thousands of student loan debts like you. No matter what financial problems you face today, there is always a way to get you back in trouble. In this article, we will delve into the importance of financial freedom and share some financial freedom tips, including some that have worked for me.
What is financial freedom?
Financial freedom is about having your financial ownership. You have reliable cash flow and can live the life you want. You don’t have to worry about how to pay your bills or unexpected expenses. And you don’t have a lot of debt.
It’s about recognizing that you need more money to pay off your debt, or that it might increase your workload, and we will do it in a minute. It also has to do with your long-term financial situation by actively saving for emergencies or retirement plans.
10 Game-changing Financial Freedom Tips
1. Understand where you are
Without knowing the starting point, financial freedom cannot be achieved. Seeing how much debt you have, how little savings you have, and how much money you need can be a frustrating reality. But this is a valuable step in the right direction.
Prepare a list of all your debts: mortgages, student loans, car loans, credit cards, and any other debt you may accrue. Don’t forget to include any money you have borrowed from friends or family over the years.
Now take a deep breath. one left. Then add up all the numbers.
How much debt do you have?
If the quantity is large, don’t panic, I promise I will share some ways to pay this fee later in this article. If the number is too small, congratulations! Welcome to share your financial freedom tips in the comments below.
Next, take a look at all your savings.
Compile a list of all savings: savings accounts, stocks, company stock matching plans, company retirement matching plans, and retirement plans. We will then add recurring monthly payments you receive, such as salary, tips.
Keep these numbers in mind as you work through some of the financial freedom tips below.
2. Positively look at money
Debt is certainly frustrating.
Keep in mind, however, that money is a good thing even if it seems to be burdensome right now.
You deserve financial freedom.
The biggest obstacle many people face when making money is that they feel that it is not good to be rich. Many people feel guilty about having it, but feel guilty about wanting it. Speaking of money, Sincero said, “We use money every day to improve our lives, but we always seem to focus on money.”
Money is like food or water, but it is a necessity. It helps you buy what you need and live the life you want.
To experience financial freedom, you will need to see money as a tool to help you achieve your dreams, redouble your energy, and live a carefree life.
Because if you have a negative attitude towards currency, you will subconsciously undermine the opportunity to make and retain money.
3. Write down the goals
Why do you need money?
Do you want to get out of debt permanently? Are you eager to get rid of the 9 to 5 ordeal? Is there a place you always want to go? Do you need to save for a wedding, child or retirement?
When I achieve financial freedom, it is because I associate it with emotional goals. My goal is to get rid of student loan debt and save money for my first home. Honestly, it was an ecstatic experience to watch my debt decrease and my savings increase.
Seeing the numbers change, I am so excited that I work hard to make more money and see greater changes in my financial situation. If I don’t associate goals with emotions, will I achieve my goal of financial freedom? Maybe not. I desperately got out of debt and moved out of my parents’ home. This despair has kept me motivated throughout my journey.
Another interesting thing happened. In February 2016, I wrote down some of my goals on a piece of waste paper:
Make $ 100,000 by selling products online
Save $ 20,000 down payment
Pay off $ 24,000 student loan
I eventually misplaced the piece of paper and completely forgot about it. One day later, when I was living in my new home, I found it on my laptop. Sure enough, I have done all three things. Interestingly, I didn’t even realize these goals.
You may not get all the work you want in a month. But it takes a year to achieve the goal. Make sure your goal is tied to the specific number you want to reach. Believe it or not, you will start working towards those goals without even realizing it.
Knowing exactly what it takes to achieve a brand’s financial freedom is a million times easier.
4. Track your spending
An important step towards financial freedom is tracking your spending.
You can use a tool like Mint, which will let you know how much you have spent, what categories you have overpaid, how much money is in all your accounts and how much debt you have.
Another cool thing about Mint is that it allows you to set goals on the dashboard. You can track your goals and know the exact month you expect to reach your goals based on the money you invest. So be responsible and remind you to continue investing in yourself.
After using Mint for a month, I managed to save some money to achieve my new wedding fund goals. Mint helps me focus on my goals and drives me to generate more passive income to achieve my financial milestones.
5. Pay first
You may have heard the expression “pay first” before. However, if you haven’t paid yet, “paying first” means putting a certain amount of money into your savings account before paying any other money, such as a bill. Moreover, the act of paying first has helped countless people get closer to achieving financial freedom.
Because if you want to pay yourself $ 1,000 in each payment period first, then everything else will be used to pay the bill. And, if you don’t have enough money to pay these bills, you will have to collect additional income to cover the costs.
By paying yourself first, you can guarantee that you always spend money to invest in yourself. Instead, you only get everything left, which is usually not enough to help you experience financial freedom.
You can also pay in other ways first. For example, if your company has a retirement savings plan, you can ask for a retirement pension. This way you can invest in yourself and the future first. This money is deducted from your salary, so the rest is money you can use to pay your bills and expenses.
6. Spend less money
In 1958, Warren Buffett bought a five-bedroom house for $ 31,500, and hasn’t moved since. His net worth? A staggering $ 90.3 billion. He can afford bigger, more expensive homes. But his frugality is probably why he became one of the richest people in the world.
On the other hand, Kanye West is not afraid to show off her money. He lives in a mansion worth $ 20 million. Once, with $ 53 million in debt, he decided to ask Mark Zuckerberg on Twitter for $ 1 billion.
What’s the difference between two super successful gentlemen? Buffett didn’t spend more than he needed, and West spent money he didn’t have.
The truth is that many rich people don’t look like rich people. Zuckerberg actually wears boring T-shirts and jeans every day.
Buying less can actually help you become richer.
By reducing your spending, two things work for you. First, you will have more money for financial freedom. Second, you will learn that you actually need much less, which can also help you save more money.
This is our next point …
7. Buying experience instead of things
Life is too short. You won’t accumulate all your cash until you are 65 years old. You can enjoy life alive.
Ultimately, the things that help you live a more fulfilling life will be the experiences you have, not the products you own.
Does what you buy make you happy in the long run? Will the debt you get from buying a bunch of things make your life easier?
Now let’s toggle the switch.
What is your happiest memory? what are you doing? Who are you with
Let’s create more memories like this.
Maybe you have a friend who likes to work with him. Invite her to exercise a YouTube playlist at home for free.
It’s a date night. You want to make it unforgettable. Find great events never before on Groupon at a great price.
You have always dreamed of traveling to Rome. You have saved a year of money to experience your dream vacation. Feeling innocent while on vacation. You did not owe it, you have earned it. Alternatively, you can become a digital nomad and travel around the world while working abroad.
Life is made up of moments. The best choice comes from spending quality time with friends and family. Although some products can make you closer to your family (such as a weekly home video game night), most products don’t add much value.
Don’t spend money, you don’t have to pretend you have money.
8. Pay off debts
Someone will tell you that it is wise to invest money in stocks rather than paying off debts. If you’re an expert stock picker, that might be right. However, if you have never invested in stocks before, you may carry more debt.
Many people feel the same way after completing their last debt repayment: relieved.
If you have $ 50,000 in debt, even if you have $ 30,000 in cash at the bank, you cannot really claim to be financially free. You still have $ 20,000 in vulnerabilities.
Although paying people is not as glorious as having money in a bank, it does bring you closer to financial freedom.
There are two main ways to pay off debt: snowball and avalanche. Snowball is when you first pay off your smallest debt. An avalanche is when you pay off your highest interest rate debt.
You need to determine the method that works best for you. But when I worked hard to achieve debt-free, I played a snowball role. It makes me more motivated. As I was able to get rid of my first debt, a $ 1200 credit card bill, in a month, my sense of accomplishment prompted me to embark on a larger, more durable student loan.
Since credit cards are no longer an issue, the average amount I pay is only three times the minimum $ 300. In the end, it took about three years to pay off the student loan instead of the nine years I allocated.
Paying off huge debts can reduce your burden. After paying off the debt, you will see the money in the bank increase. Watching the numbers climb is an amazing feeling (even if you have to watch it decline from the beginning), and it gives you an incentive to continue to grow.
9. Create other sources of income
OK, so at this point, you might be thinking, “My debt is far more than my salary. How can I pay it off if my income is not enough?”
If you take financial freedom seriously, you must sacrifice some blood, sweat, and tears.
Your 9 to 5 may not cut. If so, you need to redouble your efforts and look for funding outside your current job.
Some experts have suggested seven sources of income. If you have a 9 to 5 job, congratulations, you only have one and only six!
There are two ways you can now look at your source of income: active income (time spent money) or passive income (money that flows continuously even while you sleep).
If you trade time for money, you will be limited in your working time during the day. You can earn positive income with the following side jobs:
Become a popular Giovanni Lashes area agent and sell those lovely eyelashes to your friends and neighbors in the community. Giovanni Lashes’ products are rich in variety and beautiful in appearance, with unparalleled quality, they are selling well everywhere, and they can bring you a lot of income.
10. Invest in the future
The last financial freedom tip is important. Say you follow the advice and recommendations in this article to get out of debt and increase your savings. This may be enough to help you immediately. But what if something unexpected happens? Are you ready for this?
It’s important to set aside money for rainy days, retirement and (sorry I’ll be sick here) just in case, to make sure your family doesn’t drown for funeral, debt and tax payments. Okay, now let’s go back to that happy place.
If you have 9 to 5 jobs, talk to your company about adding a retirement plan, or check if you have deducted the plan. The deduction is credited to your account, so you never feel like you are losing money. It’s cool to check and see your savings growth regularly.
Next, you want to save enough money for the emergency fund. Some experts say that $ 10,000 is okay, while others say your salary is six months. Honestly, these numbers may look high if you don’t make a lot of money. So start with what you can afford-for example your first month costs $ 100. As you start earning more active or passive income, start raising your goals to $ 500 a month, $ 500 every two weeks, and so on. If your credit is overspending and your credit card bills are too high, don’t use contingency funds-focus on capturing more positive income opportunities so you can repay them faster.
Emergency funds are only used for unplanned emergencies, such as a tree hitting your house, you need to pay for your own car accident or go to the hospital to see a doctor.
By setting aside funds for rainy days and retirement, you are unlikely to end up where you are now: hope for financial freedom.
Financial freedom can help you control your finances and, more importantly, you can have a life. It’s about what you can do, be frugal, and make sure you spend your money on things you really need, such as food, shelter and leisure, and even vacations (relaxation is important, you know). By following the financial freedom tips in this article, you will be closer to achieving your financial freedom. So take a look at these financial situations, build more sources of income, pay down debt, and then when you know you are free.
How close are you to achieving financial freedom? Let us know in the comments below!
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