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What does financial freedom mean to you? Is it being able to afford whatever you want without having to worry about money? Or is it something else entirely?
In reality, financial freedom is different for everyone. For some, it might mean living a comfortable life without any debt. For others, it might mean being able to retire early and travel the world.
The important thing is that financial freedom means something different to each individual and everyone can achieve it.
So, how do you go about achieving financial freedom? Read on to find out!
There are many different paths to financial freedom. Some people achieve it through hard work and disciplined saving, while others come into money through investing or inheritances. No matter how you reach financial freedom, the important thing is that you have a plan and you stick to it.
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Can you achieve financial freedom?
The short answer is yes! Financial freedom is possible for almost everyone, no matter your current situation.
So whether you’re struggling to make ends meet or already comfortable, you can always make changes to improve your financial situation. It might not be easy, but it is possible.
The key to achieving financial freedom is to have a plan and to be disciplined. You need to know your goals and what you’re willing to sacrifice to reach them.
For some people, that might mean cutting back on unnecessary expenses and saving as much money as possible. For others, it might mean taking on additional work or investing in high-yield investments.
For us, the Biesingers, Financial Freedom is living on our terms. Having enough money in savings and investments that we can pivot or change what we do for work or stop working entirely. We believe that flexibility allows us more opportunities to feel peace and happiness.
Related Content: Coast FIRE: The Easiest Way to Join the FIRE Movement
Let’s turn our attention to how you can obtain financial independence:
Understand your current financial situation
When it comes to financial freedom, the first step is always the hardest. But the journey becomes much easier once you take that first step.
The first step is to take stock of your financial situation. This means listing all of your debts and savings.
Once you have a clear picture of what you owe and have saved up, you can develop a plan to pay off your debts and grow your savings.
One strategy for reducing debt is first to pay the debt with the highest interest rate or try the Debt Snowball Method. Another method for growing your savings is setting up automatic transfers from your checking account to your monthly savings account.
Have clear goals that you can achieve
The second step to achieving financial freedom is to set clear goals. This means knowing what you want to achieve and when you want to achieve it.
For example, do you want to be debt-free in five years? Do you want to retire at age 60?
Perhaps what you what to achieve is financial independence and retire early. Whatever your goals may be, make sure that they are realistic and that you have a plan for achieving them.
To help you understand how much you may need for retirement, you can check out our other blog posts about the 4% rule or the 25x rule.
Be disciplined with your spending
The third step to achieving financial freedom is to be disciplined with your spending. This means knowing what you can and cannot afford and sticking to a budget.
It can be challenging to stick to a budget, but it is possible.
Many helpful resources are available, such as online budget calculators and financial planning apps.
If interested, you can check out our other article – 15 Frugal Living Tips to Save a Ton of Money to help you get started.
Track all money that you spend
You can’t just be disciplined regarding spending; you need to track every cent you spend. This means knowing where your money is going and ensuring you are not spending more than you can afford.
You can’t get a good picture of your financial situation if you don’t know where your money is going.
Spend far less money than you earn
The goal is to spend far less than you earn to save as much money as possible. This can be difficult, but it is possible.
There are many ways to save money, such as couponing, setting a budget, and cooking at home.
You also need to ensure you are not spending money on unnecessary things. For example, don’t buy anything on credit that you don’t have to.
The interest on credit card debt can quickly add up and make it difficult to get out of debt.
Have an emergency fund
Life can always throw you a curveball, no matter how well you plan. That’s why it’s crucial to have an emergency fund to cover unexpected expenses. This fund should be used for medical bills, car repairs, or job loss.
Your emergency fund is there to protect you from financial ruin, so don’t dip into it unless it is necessary.
I created another article sharing on everything you need to know about Emergency Funds.
Invest in yourself to become financially independent
It can’t be stressed enough that you must invest in yourself if you want to become financially independent. You should consider investing in college or learning a trade to earn more money.
You’ll never succeed in becoming financially independent or retiring early if you don’t have a skill that enables you to earn more money than the average person.
An excellent way to increase your PASSIVE income is by renting out extra space! With NEIGHBOR, you can easily rent out extra space, such as your garage, self-storage unit, rooms, etc.
Start your own business
One of the best ways to achieve financial freedom is to start your own business. This can be a difficult and risky endeavor, but it can also be very rewarding.
When you own your own business, you control your financial destiny. This means you can earn a lot of money if your business succeeds.
Of course, starting your own business could be something you do on the side. It takes a lot of hard work, dedication, and some risk-taking. But if you are up for the challenge, it can be a great way to achieve financial freedom.
One of the most crucial steps: Paying off debt
Carrying around debt is like having a weight tied around your neck. It can be incredibly stressful and difficult to achieve your financial goals.
That’s why paying off your debt is one of the most important steps to becoming financially free.
There are a few different ways to pay off debt, such as using a debt consolidation loan or making extra payments on your debts.
Whichever method you choose, ensure you are dedicated to getting out of debt as quickly as possible.
Every person reading this can become financially independent
It’s true; every single person reading this can become financially independent. Of course, it will take work, dedication, and discipline, but it isn’t as complicated as you think.
If you are willing to put in the effort, you can achieve financial freedom. It is not an impossible dream; it is within your reach.
The difference between those who achieve financial independence and those who don’t is simply a matter of choice. You’ve got this; we’re rooting for you!
Disclaimer:
We hope the information in this article provides valuable insights to every reader but we, the Biesingers, are not financial advisors. When making your personal finance decisions, research multiple sources and/or receive advice from a licensed professional. As always, we wish you the best in your pursuit of financial independence!
