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.
What 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. Financial freedom allows you to control your finances instead of being controlled by them.
Although it might sound too good to be true, the good news is that it is achievable!
Here we have compiled a checklist regarding flagging 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!
How to achieve financial freedom?
To achieve financial freedom, you need to build an emergency fund, create a budget, pay off your debt, learn how to earn extra money, make several income streams. Please read the following financial freedom checklist :
1. Build An Emergency Fund:
Everyone should compulsorily have an Emergency Fund.
According to statistics, 26-27%% of Americans have no Emergency Fund whatsoever.
Also, 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 have an unexpected expense?
Creating an Emergency Fund helps you avoid taking a loan and sailing through tough parts of 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.
The majority of the population carries a lot of financial stress in Student Loans, Credit Card Debt, Mortgage, Car Loans, 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 control your Financial Life and achieve financial freedom rationally.
3. Pay Off Your Debt:
Do you have Debt that 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.
The majority of the people put expenses on Credit Cards and shell away money more than they can afford.
Such habits can lead to excessive 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 positively change your life.
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.
- A 75% savings rate will take you 7 working years until retirement.
8. Arrange Financial Meetings With Your Family:
It is essential to conduct regular Financial Meetings with your family.
Families that 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