The concept of “financial freedom” has many meanings to different people. Some individuals define financial independence as the ability to purchase whatever they choose, whenever they please. For many, it may include letting go of concerns over how they will cover unforeseen or large spending. Although some of these interpretations are accurate, none of them are complete solutions.
Depending on your lifestyle and financial condition, you can choose your desired amount of financial freedom. There are 5 crucial measures you must take in order to achieve financial freedom. These steps can include actions as well as tactical and strategic choices. Your path to financial freedom will go more quickly the more steps you can complete.
1. Understand where you are right now
Knowing where you stand right now is the first step towards financial freedom. This entails having a clear understanding of your debt load, savings balance, monthly expenses, income, etc.
2. Write Your Goals Down
Why do you require cash? It can be to pay off a student loan, try to launch a business, travel, arrange child weddings, save for retirement, etc. These are the goals you wish to achieve as soon as you have enough money.
3. Monitor Your Expenses
Tracking your spending is a crucial next step towards financial freedom. You can accomplish this in a variety of ways, such by utilising an excel spreadsheet or a notebook. You can also use the ETMONEY app’s money tracker feature, which is a simple and useful method to keep track of your spending. Your spending are automatically tracked by the programme, which classifies them according to travel, shopping, dining out, etc. You must maintain control by meticulously keeping track of your spending.
4. Invest in Yourself First
“Pay Yourself First” refers to the practise of saving a set amount of money in an investment or savings account before paying any other bills, discretionary expenses, rent, etc.
Paying yourself first has been one simple step that has brought many people closer to financial freedom. This works because it drives us to look at other options to keep your costs down.
5. Spend Less
Savings equals earnings. However, the ratio of one rupee earned to one rupee saved is not equal. Because you end up making much more money when you invest that one rupee. Simply delaying a non-essential purchase by a few days will significantly reduce impulse expenditures, which will ultimately get you closer to financial freedom.
The intricacy of the processes stated in this blog varies, so you can find that some go quite easily for you while others take a lot more effort. For instance, many people find it much simpler to keep track of their expenditures, cut back, and invest than, say, to discover a new source of income.
