What is Financial Freedom and the Surefire Strategies Towards it?

We all have a desire to control how we earn and support ourselves as well as our family.

23:12 03 March 2020

Yet there are still a lot of people who work an 8-5 job that they are not interested in, but need to, because they need to earn a living. In this situation, money has taken control of their lives. The task of taking things into our own hands and earning the way we please might seem daunting and not easy to accomplish. Therefore, here are some ways how you can become financially free and the necessary strategic steps you can take to accomplish this goal. But first, let’s understand what it means to have freedom, financially.

What is monetary freedom?

Monetary or financial freedom is the freedom you have to say goodbye to your job and start earning while doing what you love best, even if it means earning less. Financial freedom is also the ability to do what you want without worrying about where the money will come from, you can live your life the way you want to because you have made the right choices and prepared for it. 

If traveling makes you happy, then go for it! Book that flight today without any worries and start making memories that will last you a lifetime. Pro travel tip: it’s important to know the conversion rate when traveling to the country of your choice beforehand, so that you know just how much money you will need to bring and exchange into your destinations local currency. If the conversion rate is in your favor, you can stay at expensive hotels, eat out at some of the best restaurants in town or go on a shopping spree without worrying about spending too much. 

Not worrying about your finances, especially when you travel, is a dream everyone would like to achieve some day. It’s definitely an achievable one too, you just need to play your cards right and start making smarter financial plans. This article is here to help you figure out where to begin. 

Below are some ways in which you can move towards staying financially free and in control of your future.

Learn to manage your money well (budget wisely)

 

The first step to financial freedom is that you learn proper money management skills. Without a money plan in place, chances are you are planning to fail and the rewards of gaining financial freedom slipping through your fingers. One of the best ways to practice money management is for you to make a budget and closely stick to it. A well prepared budget will keep you from going overboard and spending too much money, especially on stuff that is trivial. Since your needs can differ for each month, you should create a new budget monthly so you can always be in control of your funds.

Choose a career that can get you on the right track

The career you choose can help produce the financial freedom you have always wanted to experience. A dead-end job will only result in making you miserable and unable to meet all your financial goals while giving you financial security for the future. When choosing your goal, ask yourself the following questions:

What do I hope to achieve in 10 years time?

Is there potential to earn a good income in this sort of career?

Do I love the career I am choosing?

Will the benefits I will be getting from this career choice be enough to support my quest for financial freedom?

If the answers to the above questions are positive ones, then go ahead and start making plans to kick-start your career. However, if you have a problem truthfully answering them then turn away from the career you have in mind and think of something else. A good career choice will always put you in line with wealth and give you the financial freedom to do whatever you want to do.

Save short-term

A surefire way to reach financial freedom is by creating a plan for short-term savings. If every time you remove money from your account when something needs attending to, like fixing the refrigerator and paying the rent, then you are defeating the whole purpose of saving and gaining financial freedom. To counteract the action of constantly pulling money from your savings account, you need to put a plan into place that can take care of emergencies that will suddenly appear. A good way to deal with sudden emergencies is for you to have a separate account where you can withdraw from to meet such financial needs. Save every opportunity you get and make sure to invest wisely as well.

Learn about the different investment options

With your savings plan in place, you can consider investing money that will eventually grow and give you a good turnover. There are various investment options available to you that can bring you to a place of wealth in your life. The three main ones are seen below:

Retirement savings: you can have peace of mind by opening a retirement savings account that can meet your financial needs after you stop working. Some tax-free retirement savings options you can consider are Roth IRA and Roth 401 (k).

College savings: if you are a wise parent and want to invest in your kids’ education from early, you can invest your money in an Education Savings Account (ESA). This savings account also grows tax-free as well.

Real estate: a real estate investment is always a surefire way of achieving financial freedom. The home you purchase will continue on a financial growth path throughout the years and this trend will help you reach a place of financial security.

Mutual funds: mutual funds give you the privilege of investing in a number of stocks all at the same time and in a single purchase. When you invest your money in mutual funds, you are required to pay a fee to the mutual manager. 

The stock market: stock market investment over the years have proven to be big business not only in the US but the world as well. Buying stocks makes you own a small percentage of the company that the stock belongs to. If the company should make a profit, you are paid a percentage of the profits in the form of dividends. You can sell your stocks anytime at a profit.

Taking the right steps to become wealthy is a sure way of getting on ahead and securing your future. Therefore, make the right move towards economic freedom now and stay on top of things.