Having financial freedom means different things to different people. It could mean having enough money to afford a certain lifestyle, travel around the world, pursue a new business venture, relocate to another country, or even plan for retirement.
To attain financial freedom, you need to have a financial cushion like savings and investments beyond having a normal salary.
How to Achieve Financial Freedom
Here are 6 good habits to help you attain financial freedom;
1. Organise Your Finances
Make a consolidation of all your savings, investment, debts, insurance, and non-financial assets. Set your life goals, create a budget to achieve your goals, and have an automatic cash flow.
Creating a budget is also a good way to organise your finances. By mastering a frugal lifestyle – living a good life with less or spending less and saving more you can attain financial freedom. You will need to handle your wealth with modesty by distinguishing between what you need and what you want.
2. Start Investing Today
Explore investing in the stock market, buying a treasury bill, buying shares in a reputable company, leasing property or opening a fixed deposit account. These are all good options to help strengthen and diversify your financial portfolio.
Your investment choice should be influenced by tax, liquidity, diversification, investment tenure, and investment risk. Investing is a long-term goal and you must be fully aware of the pros and cons to reduce the risk of a costly decision.
Also, consider making use of your company’s pension plan and any other contribution benefit available to help you save more from your salary.
3. Educate Yourself on Financial Trends/Issues
Keep up with financial developments in the stock markets, stay updated on the news and do not hesitate to make changes in your investments if necessary. Review the tax laws and check that your investments apply these updates or deductions as the case may be.
Staying informed would also save you from fraudsters who prey on investors. Ensure your financial strategy is up to date as your goals or life continue to change over time.
4. Pay Off Your Debts
Attaining financial freedom also involves being debt free. From car loans to business capital loans, student loans, mortgages and any other high-interest consumer loans are toxic to wealth growth.
However, interest loans are important and can help you achieve some of your life goals but on-time payments will build your credit and help your financial portfolio. Make it a point to pay the full balance of your debt each month.
5. Prepare an Emergency Fund
Your emergency and retirement funds should be pulled out of your account the day you receive your salary to avoid spending it or gaining access to it. This would help you stay more committed to your financial goals.
Remember that the recommended amount to save in your emergency fund depends on your lifestyle and circumstance. Explore having an automatic withdrawal into your emergency fund which can be accessed for unexpected expenses.
6. Get a Financial Advisor
After amassing a decent amount of wealth – either fixed assets or liquid assets, you will need a financial advisor to help you maintain your finances and remain on the right path.
Read Also: 3 Ways to Make Your Money Work for You