Everyone wants to attain financial freedom but few are willing to work for it and making it a reality.
Money isn’t everything but it can certainly improve your life and make things easier if you are smart about it.
Creating Financial Security is one of the ideal ways to use your money.
Now, what exactly is Financial Freedom?
Financial freedom usually means having enough savings, financial investments, and cash on hand to cover your expenses without constantly worrying about money.
Although it might sound too good to be true, the good news is that it is achievable!
Here we have compiled a checklist regarding how to flag off your own journey to improve your financial life.
As you knock down each one off of the list, you’ll get one step closer to attaining Financial Freedom!
1. Build An Emergency Fund:
Everyone should compulsorily have an Emergency Fund.
According to statistics, 26-27%% of Americans have no Emergency Fund whatsoever.
In addition, only 40-41%% of families have enough in savings to cover three months of expenses.
Can you even imagine the deadly scenario?
What if you lose your job or your hours are cut back or you have an unexpected expense?
Creating an Emergency Fund helps you to avoid taking a loan and sail through tough parts in life, and is crucial in reaching financial freedom.
2. Create A Realistic Budget:
According to Gallup, an American Analytics and Advisory Company, 68-70% of households in the U.S. do not have a budget.
Majority of the population carries a lot of financial stress in the form of Student Loans, Credit Card Debt, Mortgage, Car Loans, and etcetera.
Not many people have a realistic budget.
Learn to live below your means and spend less than you earn.
The practice of Budgeting can help you to rationally control of your Financial Life and achieve financial freedom.
3. Pay Off Your Debt:
Do you have Debt which is preventing you from reaching your financial goals?
If you want to attain financial freedom, then you must figure out how to eliminate any Debt.
Paying off debt has the following advantages:
- Low-Stress Levels
- More Money in the Account
- Zero Interest Fees
4. Diversify Your Income Streams:
Don’t be too dependent on a single source of income.
Learning ways to make extra money allows you to diversify your income.
Generally, diversifying your income with multiple income streams will make you eligible for early retirement.
There are numerous ways to diversify your income.
Here’s an extensive list:
- Selling On Amazon
- Pet Sitting
- Content Editing
- Hosting A Garage Sale
- Driving An Uber
5. Stop Trying To Impress Others:
Keeping up with others is something everything has experienced at some point in their lives.
Nonetheless, the truth is that such vicious practice can actually make you broke.
Majority of the people put expenses on Credit Cards and end up shelling away money more than they can afford.
Such habits can lead to an excessive amount of debt and potentially set you back years with your financial goals.
If you want to attain Financial Freedom, try to distinguish between “wants” and “needs”.
Instead, become realistic with your expenses.
6.Learn To Earn Extra Money:
Learning to earn extra income can change your life in a positive way.
Here’s a list of things you can do once you have an extra source of income:
- Save For a Vacation
- Early Retirement
- Purchase a House
- Escape 9-5 & Start a Business
- Pay Off Det
7. Save For Retirement:
According to Statistics, 56-57%% of Americans have less than $10,000 in retirement savings and 32-33% have no retirement savings at all.
If you want to attain Financial Freedom, saving for retirement is mandatory.
Let’s have a look at some staggering calculations!
- 1% savings rate will take you 98 working years until retirement.
- 5% savings rate will take you 66 working years until retirement.
- 20% savings rate will take you 37 working years until retirement.
- 50% savings rate will take you 17 working years until retirement.
- 75% savings rate will take you 7 working years until retirement.
8. Arrange Financial Meetings With Your Family:
It is extremely important to conduct regular Financial Meetings with your family.
Families which conduct regular Money Talks and Budget Meetings are more likely to be financially successful and happy.
It simply ensures effective communication among the members and a more unified financial goal.
How many of them have you checked off of this financial freedom checklist?