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The Financial Freedom Guide: Financial Freedom Strategies That Work
Your Financial Freedom
Achieving financial freedom is a goal and dream many of us have.
We all long for the day that we can just walk away from our 9-to-5 jobs while pushing our cubicle walls down upon our exit.
According to the Consumer Federation of America, rising credit card interest rates and debt have risen substantially since 2013.
This increase in debt makes it difficult to attain financial freedom.
It’s the ability to become financially free in our every day lives that we all crave.
Not having to worry about your day-to-day debt and finances can become a reality.
The steps below will help you reach financial freedom.
What is Financial Freedom?
In it’s simplest definition, financial freedom is being able to control your finances. You have an income and cash flow that allows you to live the lifestyle you want.
Your life has become debt-free. There is no worry of mounting debt and you don’t have any credit card bills.
There is no longer worry about how you will pay your bills or sudden emergency expenses that arise.
Financial freedom is about planning your life and how to plan the long-term finances of your lifestyle.
Knowing that you are able to cover financial expenses that may come up on the horizon is financial freedom.
These are all examples about becoming financially free.
How Much Money Do You Need For Financial Freedom?
This answer is different for everyone. It’s all about what kind of life you are living and want to live in the future.
If your future life is made up of traveling, vacationing, and buying new cars every so often, it will cost a lot for your financial freedom.
On the other hand, somebody who is happy and content living in a tiny house off the grid, their financial freedom will cost a lot less than the previous example.
It comes down to the lifestyle that you envision for your future.
These tips below will help you sort out what to do in order to achieve financial freedom.
My Top Financial Freedom Strategies
- 3 Necessary Steps For Building Wealth In Your Household – Three simple and necessary steps for individuals who want to build wealth in their household. Master these tasks and be on your way to financial freedom.
- 7 Ways To Pay Off Your Mortgage Early – Discover how easy it is to gain financial freedom and take control of your life by using these 7 ways to pay off your mortgage early.
- How To Keep Your Financial Health In Check – Personal finance tips designed to keep your financial health in check. Learn how to chart out your path each year and achieve financial wellness. Be sure to use these 10 finance tips and checklist yearly to improve your financial wellness.
Looking for more articles about financial freedom? Check out our full list at the bottom of this page.
Tips For Achieving Financial Freedom
1. Current Life Status
It is true that you can’t achieve financial freedom if you don’t understand where you are currently at in life.
By this I mean understanding what are your every day finances.
You should look at how much savings you have, how much debt you have, and what your monthly bills are.
2. Write Down Goals
It is essential that you figure out what is holding you back from achieving financial freedom.
- Is it having a lot of debt?
- Is it not making enough money?
These goals are important to write down in order to achieve financial freedom.
3. Make A Budget
Once you figure out what goals you need to achieve, the next step is creating a budget.
By creating a budget, you are documenting your financial future. A budget will be necessary to guarantee that you have a road map to paying your monthly bills and achieve goals.
The goals mentioned above should be worked into your budget.
A budget is important because it will cover things such as making sure all of your bills are paid each month on time.
Your budget can also track your savings goal. Knowing how to budget your money is important.
If one of your goals is to pay off credit card debt as a step towards achieving financial freedom, that should to be reflected in your monthly budget.
You will want to create a line item so additional payments can be made that go towards paying off your debt each month.
Once this goal is completed, you are one step closer to financial freedom.
4. Create Automatic Savings Plans
Setting up a new savings account is a great way to achieve financial freedom. This can be done each month.
By putting aside money each month into a savings account, you are starting the seed money which will eventually grow and fun part of your future lifestyle.
5. Track Your Spending
This is a relatively easy step to monitor if you are using a budget. You should review your budget at the end of each month to take a look at your expenses.
If you find yourself overspending on certain discretionary categories, think about focusing on that in future months.
You can use such systems such as the envelope system for discretionary purchases each month. Once the cash in that envelope is gone, you won’t be able to make any more purchases for the month.
6. Monitor Your Credit
Your FICO score can determine a lot of things for you in your life.
That three digit number determines what interest rate is offered when you are buying a car or purchasing a home. It can also affect many other things including insurance premiums as well.
That is why it’s important to get a credit report once a year to check your credit score. Be sure to take a look at our article on how to increase your credit score even if you have had a recent bankruptcy.
7. Start Investing
Once you have adequate cash reserves built-up, you should start investing in order to achieve financial freedom.
There are many different things that you can invest in such as real estate, stocks, or even mutual funds that pay great dividends. You will have to determine for yourself how much risk you feel comfortable taking on.
8. Spend Less
There are ways to speed up the process for achieving financial freedom. One of those ways is to spend less.
While it is great to spend less on every day items, spending less on housing is one of the biggest rate of returns per year on how to increase your annual amount of money saved.
I recently sold a very large house and downsized my house.
As a result, I got rid of my mortgage, ended up paying cash for a smaller home, and also saving thousands of dollars per year on the operation and maintenance of that house.
All in all, I’m saving close to $30,000 per year now!
If you are able to do this, and reduce your living square footage, it can have huge financial payoffs for you and your family and your quest to become financially free.
9. Get A Financial Advisor
Sometimes it’s OK to ask for help. If you have built-up significant savings, you should seek the help of a financial advisor to educate you on what your options are.
A financial advisor can walk you through all the ins and outs of investments in real estate holdings and other products besides leaving your cash idle in your savings account.
They can also help you determine what level of risk you are comfortable with.
10. Live Below Your Means
Another way to achieve financial freedom fast is to live below your means. Try not buying as many clothes each month.
Or think about shopping at a secondhand store instead of purchasing new clothes each month.
11. Reduce Eating Out
Try to refrain from going out to eat often.
You can find all kinds of recipes online such as this list of over 270 cheap meal ideas for families.
12. Reduce Transportation
If you are a two car household, see if you can go down to just having one car.
Better yet if you lease your cars, think about buying a new entry-level type vehicle.
Try to keep that vehicle for at least 10 years so you can get your moneys worth out of it. There will be several years where you will not have a car payment which will allow you to save significant money.
13. Save For Retirement
I highly recommend contributing the maximum amount towards your retirement accounts if you can. The benefit of this is the money you contribute will continue to grow tax free throughout your working career.
Additionally, the stock market has returned 8% historically. That’s not chump change on a $500,000 balance.
14. Create Additional Sources Of Income
Sometimes if your monthly expenses exceed your income you’ve got a problem.
This is known as deficit spending and it can be detrimental to achieving your financial future.
Don’t despair if you are in the situation. There are things you can do to create additional sources of income.
There are all kinds of creative ways to make money or side hustles that could help put more money back into your monthly budget.
15. Continuous Education
Sometimes you have to spend money to make money. That is the whole purpose about receiving a collegiate education.
Going back to school when you are a seasoned professional or mid career can be a wise thing to do. If your employer offers any type of match for college courses consider taking them.
Not only is this a educational benefit to you, but if you receive an additional degree you may also receive additional compensation from your current employer.
16. Avoid Going To Bars
Going out to bars and picking up bar tabs can certainly add cost to your monthly budget.
It’s not uncommon to easily spend 40 or $50 having drinks with coworkers after work.
Save that money and opt to meet up at someone’s house instead.
17. Pay With Cash
Paying some of your discretionary expenses with cash will go a long ways towards growing your bank account.
Most people that pay cash for expenses end up spending less. This is especially true if you are incorporating the cash payment method into your budgeting system.
It’s a good way to teach yourself spending discipline and self-control. Once your cash is gone, then you are unable to spend and make purchases.
Financial Freedom Living
Living with financial freedom is about living within your means. Focusing your purchases and expenses on needs rather than wants will allow you to attain financial freedom.
Be sure to pay down your debt, create additional sources of income, and spend less money overall. These tips will help put you on the fast track to achieving financial freedom.
Financial Freedom Strategies
Check out our strategies below on how to achieve financial freedom. Take control of your life and get your financial life back today.