Financial freedom means to be financially self reliant; to have enough money set aside to leave a comfortable life, free of debt, and peanut salaries. Financial freedom is important because it gives you the luxury of comfortable living, acquiring whatever you need to buy, and not getting nervous because of its financial impact.
In this article, we are going to discuss 10 tips to reaching financial freedom.
1. Pay your tithe
If you are a believer, you should know that tithe payment is one of the secrets to avoiding financial setbacks and enjoying financial blessings. It is like financial insurance. When you pay your tithe, there is a tendency that avenues to get more income would be open to you, and you won’t need to waste money unnecessarily on irrelevant things. So, when you get income, remember to pay your tithe(10%) from it to enjoy financial stability.
2. Save Money
Saving money regularly will provide funds for you to fall back on when you experience financial setbacks. It doesn’t matter how much you save, as long as you are adding to it regularly. Let us take an example from these past months; because of the covid19 pandemic, many family’s bread-winners lost their jobs, some were paid half of their original salaries; while many family’s suffered because of this, some family’s were able to survive and live comfortably because they had savings to fall back on; this is enough explanation to help you understand that savings is important if you want to enjoy financial freedom.
3. Avoid debt
Being in debt is like having a milestone tied to your neck, and you are thrown into deep water. Being in debt is like being in bondage; it is the exact opposite of financial freedom. People go into debt for various reasons; to rent or buy a house or a car, to pay for tuition, to start a business, to treat health problems, and other important reasons, but some other people go into debt for the wrong reasons; they may just want to live extravagant life, and show off when they don’t have the financial status to match it. Whatever may be your reasons for going into debt, it is not the brightest idea; but if you must, try and pay it off as soon as possible. Avoiding debt is crucial to financial freedom; without it, there is no way we can ever be truly free financially.
4. Manage Money
Managing money is to avoid wasting money on irrelevant things. It means to spend money wisely. Everyone has wants and needs; differentiate your wants and your needs and spend money actualizing your needs. You can get your want only when you have extra income. If you can discipline yourself to manage money, you are on the highway to financial freedom.
5. Live within your means
Living within your means simply means that your expenses are equal to or less than your income. Living within your means will give you financial security, but spending more than you earn will make you go into debt.
Budgeting is the process of planning how to spend your money. A typical budget consist of your expected income, an outline of your expenditures, savings and reserve fund. Budgeting is a way to track your spending, so you can’t spend more than you earn. Budgeting gives you direction on how to spend your money, so that when it comes you won’t waste it.
7. Go for quality
When making your purchases, go for quality. When you avoid buying fake products and go for original and quality products, you will get value for your money. If you buy a fake product, it will not be durable, hence you will need to buy another one soon, but if you buy a quality product, it would have a long shelf life, so you won’t need to waste money buying it again in a short period.
8. Be Positive About Money
Your mindset about money would determine how you earn and spend money. To develop a positive mindset about money, you need to develop and maintain good money spending habits, stop comparison and accept your present income, use money for good and not to oppress people, finally don’t be greedy about money.
As you earn money, you can look for and be part of a good investment companies. When you invest money, it will accumulate interest over time depending on the terms and conditions of the company. FXTM and Axamansard are licensed companies you can invest with. You can also invest with trusted banks in your locality.
10. Regular Financial Review
When you start enjoying financial freedom, you have to review your financial status regularly. According to Tom Corson-Knowles in his article, “How to be financially free”, he said-
Every successful, profitable business has regular financial meetings, if not monthly, then weekly or even daily.
The more profitable the business, the more organized the financial meetings become.
It’s time to start managing your own finances like a business. Schedule your own 1-hour monthly financial review meeting in your calendar.
At least once every single month, you should review all of your finances at this meeting—your income, expenses, savings, investments, and financial plans for the future.
Here’s a list of questions you should answer every single month. Even if you’re single and live alone, schedule a monthly meeting and go through all these questions by yourself, or with a friend, mentor, or financial advisor.
• How much did you earn this month?
• Is there anything you could do to earn more?
• How much did you spend?
• Is there anything you spent money on that you now regret?
• How could you save more money in the future and reduce your expenses in a way that would add more value to your life?
• Are you paying for any ongoing subscriptions or items with monthly fees? If so, can you reduce or eliminate them?
• How much did you save and invest this month?
• How are your current investments doing?
• Based on your current situation, how well will you be doing financially over the next 1, 5, 10, and 50 years?
If you can discipline yourself to follow these 10 tips, I assure you that you will have total financial freedom. Thanks for reading.