Money is of utmost importance in our daily lives. From basic necessities to all the luxuries of the world, money is a crucial necessity for all of it. What this means is that if you want to live a life where you have all that you need for a comfortable existence, you will need to be smart with money.
In other words, you will need to achieve financial freedom, for that’s the only way in which you’ll be able to get the things that you want from life and do so at a steady pace. There is much that can be said when it comes to achieving financial freedom.
Some of the most important steps in achieving this are given in the points below.
1. Define Financial Freedom
In order to attain financial freedom, you need to be able to define it.
Different people have different opinions about what ‘financial freedom’ is. To some, the ability to meet the basic necessities of life is more than enough. But to others, the ability to have things like luxuries and other extravagances also counts as financial freedom.
Therefore, it is important to have a clear idea of what this means to you, and then write it down.
So ask yourself what does it meant to you? Spend some time to think about this aspect of your life, and get busy withdrawing the big picture.
It is only when you complete this step that you should begin doing everything else.
2. Understand Your Finances
Figure out where your life is, in financial terms.
What this means is that you should be able to list out every last detail about your financial status, ranging from assets and liabilities to commitments and so on.
Doing this will help you to get a clear idea of where your finances actually lie and give you a starting point.
3. Get Out of Debt
There is nothing more destructive to financial freedom in life than debt.
Debt is akin to slavery, whether it is with a bank or to another individual. You simply cannot live your life in a peaceful manner, if you have debt, for it will always nag you at the back of your mind.
The term debt here should include anything and everything, whether it is loans, credit cards as well as the money owed to other people.
Figure out what the total debt is, whatever interest is applicable, and anything else that might be related. Once you get an idea of the total debt you owe, you can get started with repaying it all back.
4. Figure out Your Assets
An asset, in general, means anything that has value.
In the context of finance, it should be thought of as anything that has equity, can be sold, and offers liquidity or something along with the like.
This is required for you will then know the total amount of wealth that you actually have, and be figure out what is lacking in your financial life.
5. Get Rid of Your Credit Cards
There is almost no reason to use credit cards in your life, to a very large extent.
Given that the total amount of money owed on them is usually far greater than the principal, it is very likely that you could end up paying for it, quite literally, your entire life. And that’s certainly not the most ideal way to live.
So get rid of any credit cards that you might have, by cutting up and having them canceled. If you owe money on them, work on paying them off as fast as possible. The interest always ‘builds up’ and will come back to haunt you, sooner or later.
If you really want to use credit cards for the benefits they offer, such as discounts, flyer miles, and a waiver on fuel surcharge and so on, make sure that you pay off the cards as soon as you can, before the interest kicks in. Also, if you insist on having your own credit card, you might want to check up on the many different cards on the market, rather than sticking to the one you are with, for you might just be able to get a better deal.
6. Grab As Many Offers As You Can
This is one of the more ‘hidden’ secrets about saving money, which many people don’t practice.
Due to the fact that there is always the need for a sale, companies usually have one kind of sale or another. While many of them don’t offer much, there are a few which can offer some really sweet deals.
So check up on any offers that might exist, the next time you go shopping. From freebies and cash backs to large discounts, all of them add up, when it comes to being financially smart.
7. Value Time More Than Money
As much as money is important, it must be noted that time has a far greater value in comparison.
This is because, money, even if spent, can always be regained later on. But that certainly doesn’t hold true in the context of time. Once the moments are lost, you will never be able to regain them again.
Also to note is that money is actually available in abundance if one knows how to earn it. Every single day, literally of dollars worth of goods and services are traded across the world’s markets. If you can find a way to harness the power of the marketplace, you’ll never have to worry about finances ever again.
Unfortunately, a vast section of the population thinks in the exact opposite manner, where they value money more than time, albeit to their detriment.
8. Start a Business
This is by far one of the best ways to get started with one’s wealth-building journey, and achieving financial freedom.
Starting a business allows you to trade value for money, meaning that you’ll be able to amass vast fortunes in a relatively small period of time.
The business itself can start out as a small venture, which can steadily grow with the passage of time.
9. Read the book called The 9 steps to financial freedom, by Suze Orman
To sum up, the above list of strategies are some of the most tried and tested in the world, when it comes to achieving financial security in life. By simply taking steps in the right direction, and using the steps mentioned above, you can look forward to a more secure financial future in no time.
Read more about the best tips for saving and investing money!