Before we define the term, we should understand the context of freedom. Freedom is a situation where one is in control of his or her life choices, be it marriage, education, finances, career, devotion and others.
Financial freedom connotes having wealth (savings, financial investments, cash at hand and others), that would be enough to afford the kind of life one desires. Financial freedom aligns with financial independence; that is the status where one can have enough money inflow (income) to offset one’s living expenses without having to be dependent on others.
Financial freedom is also the ability to fund one’s expenses from passive income (Income earned without having to work a job or income that requires minimal daily effort to maintain).
Regrettably, too many people fail to achieve financial freedom as various economic indiscretions like profligate spending, carelessness, and failure to adequately manage their finances, in tandem with other factors, hinder them from reaching their financial goals. Financial emergencies, unexpected occurrences that overturns spending plan would result in increasing debts and financial hindrances and it is on the aegis of this that we are suggesting these three tips to guide you as you attain financial independence.
1. Have a Financial Plan (Set Life Goals With Budgets)
To be able to adequately control your income and expenditure, you should have a financial plan of what you want. You should note the income generated by you, the lifestyle presently suitable for that income. You should write down how much assets you should have (bank account, land assets), the kind of life you crave for and when you want them achieved. Being specific about your goals gives you a higher likelihood of achieving them.
Create a goal with your current state, while establishing financial mileposts at continuous intervals.
You can then make a monthly budget that you will stick with to make sure you foot your expenses while still affording to save. This prevents profligacy.
2. Have Targeted Savings
Remember, you are planning for the future and it is hence expedient you have a saving plan. Have a targeted amount you want to save every month/every year and faithfully stick to it.
Save Before You Spend And Not Spend Before You Save, you should live below your income and not exactly as your income.
Once you receive the income for the month, do not make the mistake of paying your bills first before you save.
Remove the ‘planned savings’ from your income before you start spending it, that way your targets would be met.
3. Invest your savings
Do not just save and leave it dormant in your account without using it. Invest the savings to yield bigger returns.
There are low-risk stock markets you can invest your funds in but be careful not to fall victim to dangerous ones.
You can for example open a brokerage account online that will allow you to easily learn how to invest, while creating a manageable portfolio, and you can then automatically make weekly or monthly contributions to it.
You can invest in properties that would appreciate steadily. You can also buy shares.
The idea is to make your savings work themselves while you focus on other things.
Note: These 3 tips alone may not solve your financial issues as there are other tips in maintaining financial freedom or independence aside the stated but for the purpose of this article, these three were summed up.