The Ultimate 10-Step Guide to Give You Financial Freedom

Are you looking out for ways to achieve financial freedom?
You have come to the right place!

Surfing through the internet, you will come across a long list of tricks and techniques.
But how do you know which one is best for you?
Financial freedom is among the most critical goals for youngsters and even adults.
But how do you achieve it?
We have the answer to your questions RIGHT HERE.
These simple ten steps will do all the wonders for you:
1. Start with Budget
2. Draw and Cut Down Unnecessary Expenses
3. Get Rid of Debts
4. Seek Professional Advice
5. Dig Deep and Educate Yourself
6. Run After Opportunities, Not Things
7. Start Small to Save Big
8. Explore the World of Investment
9. Amend your Thoughts, Adopt Healthy Money Habits
10. Stay Financially Active
Buckle up for the most helpful ride and let’s dive deep into these.

What is Financial Freedom?

HANG ON!
You cannot adopt a route without knowing what your destiny is.
Similarly, you cannot be financially free without knowing what it means.
So before we start our journey, let’s explore our final destination.
When you hear the words “Financial Freedom”, what comes to your mind?
A standard answer to this question is derived from the words itself, “To be financially free”, or “To not be dependent on others for money.”
Now, both these definitions are technically correct.
In simple words, it refers to having sufficient savings, financial investments, and enough cash in your hands to be able to lead a well, debt-free life and adopt a desirable lifestyle.
An alternative to it, you can also see it as your ability to pay off bills without any hindrance and afford vital needs and wants.
You can pick whatever definition you prefer.
As the famous Robert T. Kiyosaki says,
“Financial Freedom is available to those who learn about it and work for it”.
So, without any further delay, let’s dig into the ways.

1. Start with a Budget

A key to acquiring any particular idea or habit? Start easy!
Hence, start with a budget!
A budget will go a long way.
The first and main thing you need to do is make a budget. Sit down and pick up a pencil.
A budget doesn’t mean to scribble notes on your notepad. No, there is a lot of thinking and research involved.
Here are some of the factors you need to consider while sketching a budget.

  • Track your monthly income
  • Know your future goals
  • Enlist your needs and wants
  • Do some Magic Math

Let me simplify each step for your convenience.

Track your Monthly Income

To plan a worthy budget, you must know what your monthly income is.
How much cash you are easily getting in your hands and how much do you owe.
Once you are aware of your income, you can make a better budget for yourself.
You will have a clear perspective on how much you are earning every month.
This way, you can better plan your financial future.

Know your Future Goals

When making a budget for financial freedom, you must give a special place to your future goals.
List all your future goals like education, health, a wedding, emergency fund, any travel plans you have, and more in one column.
Once you do that, you will be aware of how much money you will need in the future for these particular goals.
It will help you plan your earnings and budget accordingly.

Enlist your Needs and Wants

After you are on track with your income and goals, you need to separate your wants from needs.
Again, nothing to be worried about, here is how you can do it.
Make a table and write “Needs” on one side and “wants” on the other.
Ponder over your daily life routine and separate your basic needs like bills, food, rents, etc. from your wants.
You can define them like this:
->Needs: Things you need to live.
->Wants: Things you desire for your comfort.

 

                              NEEDS                             WANTS
  • Bills
  • Grocery 
  • Rent
  • Phone and Internet
  • Child Care
  • Transport
  • Fancy Food
  • Subscriptions (Netflix, Magazines, etc.)
  • Holidays
  • A new gadget
  • Home décor
  • Beauty Products

Do Some Magic Math

Last but not least, do some Magic math.
Once you have completed all the above steps, you will face no trouble regarding this one.
All you need is to do some calculations and allocate a specific budget to your needs from your income.
Then, you can go ahead with your wants.
After assigning a particular value to your need, future goals, and putting aside some for savings, you can divide the rest to your wants.
It is always better to have a balance in your life than to overdo and have nothing in the end.
If you think through these tips, you will surely be able to make a decent budget for yourself.
A reasonable budget in return will never make your hard-earned money go to waste.
Follow these budgeting tips for more guidance!
Remember, ‘’Budgeting is not about limiting yourself – It’s about making the things that excite you, possible.’’

2. Draw and Cut Down Unnecessary Expenses

Now that you have drawn a budget let’s have a quick look at your expenses.
The second most important step you will need to take is to track your expenses.
You must know where your money is going!
Before jumping on to the second half of this step, you need to know what your expenses are.
Now, this might sound a bit dreary, but it is necessary.
It will give you a new perspective of where you stand and how you are burning your money.
Drawing out your expenses will help you pinpoint all the little mistakes you have been making, which could, in the future, leave a drastic impact.
Once you identify where your money is going overboard, you can easily cut down those unnecessary expenses.
When we talk about expenses, there are of two kinds; Necessary and Unnecessary.
Here’s what lies in them.

Necessary expenses:

  • Utilities
  • Grocery
  • Rent
  • Bills
  • Fee
  • Food etc

Unnecessary Expenses:

  • Shopping
  • Entertainments
  • Dining or Junk Food
  • Memberships to Gym

Now, we are not in any way, undermining the unnecessary expenses.
All these unnecessary expenses are quite fun to do. That is why they might also be hard to cut down.
But you can always minimize them.
For instance, you can adopt 2 or 3 things from the options below.
Don’t go out for movies every week, instead, make it once in two weeks.
Prepare your meals at home rather than dining out every day.
If you are a student, you can take your lunch from home and save your money for the whole day.
Don’t pay heavy loads of money for a gym membership when you can find a good YouTube video for an effective workout.
Don’t overstuff your closet with clothes that you are not going to wear twice. Learn to wear the same clothes again and minimize shopping to once a month.
Make a Grocery list before going shopping to avoid stocking up.
Set a shopping limit.
Now, this may seem like asking a lot from you, but embracing even one or two of these habits will make a substantial difference in your budget.
It will look challenging at first, but once you get the hold of it, things will ease up for you.
You will also see a positive change in your financial situation, which will be a reward in itself.
All you need is a strong will!

3. Get Rid of Debts

As Mark Cuban smartly said, “Pay off your debts first. Freedom from debt is worth more than any amount you can earn.”
I think a lot of us can relate to this.
Debt is your foulest enemy when it comes to financial freedom.
Therefore, if you are aiming for it, get rid of your debts.
Here are some of the ways you can adopt:
1. Go from smallest to largest.
2. Minimize the use of credit cards.
3. Sell spare stuff.
4. Look for a part-time job.
5. Take advantage of online sites.
Let’s have a short review of these.

Go from Smallest to Largest

When it comes to paying off your debts, the rule is always to go from smallest to largest.
It’s a smart way because it is doable.
Enlist all your debts on a piece of paper and encircle the smallest one.
Always try to get clear of them first before you jump to the bigger loans.
This way, at least you are getting rid of some while still having money in your hand.
“Pay off your debts from smallest to largest. It’s not about Math; it is about momentum.”

Minimize the Use of Credit Cards

We all use credit cards nowadays.
You cannot get rid of it, but you can try to minimize its use.
Every time your purchase from your credit cards, you are adding one more stock to your pile of debts.
DO NOT PURCHASE FROM CREDIT CARDS UNLESS YOU CANNOT PAY IT BACK.
Always try to pay it by cash but if you do use credit cards, try to pay off the debt immediately.
The road is tough, but it is worth the destination.

Sell spare stuff

To get rid of debts and ease the stress of your shoulders, you can also consider selling some of your extra stuff.
Most of us have stuff lying around that we seldom use and can go on without them.
So why not utilize them to pay off your loans?
It doesn’t have to be your precious belongings, just some rusted stuff you don’t need anymore, for instance, some of the old furniture, or a dress that doesn’t fit you anymore.
You can always sell some of your old accessories to get enough fortune to pay off your debts.
Your smart decision now will do wonders in the future.

Look for a Part-Time Job

In your early years, you have all the energy and potential to do more.
You can always look out for some part-time jobs that would pay you just enough to manage your debts.
If that happens, it’s a treat for you.
Grab it.

Take Advantage of Online Sites

Since we are living in the hi-tech world, why not take advantage of it?
You can get access to some online and free mobile debt repayments tools like Tally, Unbury.me, and more.
With these sites, you can track your progress and seek guidance on how to pay your debts fast.

4. Seek Professional Advice

Everyone needs a bit of practical advice now and then.
Especially when it comes to financial situations, you cannot just dive in blindly.
Seeking professional advice is an excellent option for you to consider.
While you can take suggestions from your family and loved ones, a professional is a professional for a reason.
To get some guidance from a financial advisor is a smart option.
He will help you make intelligent decisions that will advance your financial goals and situations.
There is a reason professional exists. They have experience and have excelled in that particular field.
They can give you better advice keeping in mind the economic situation of a country and your current state.
Furthermore, an advisor is not emotionally invested in your money. Therefore, his advice will always be neutral and objective.
So, if you are stuck with no way out, if you need a direction for your financial road, head towards the best financial advisor you know and ease the tension off your shoulders.
Here’s where you can review more about the best financial advisors for you.
Hope we are of good help to you.

5. Dig Deep and Educate Yourself

You cannot make such a vital decision for your life without proper knowledge.
Always remember, an empty mind is the most dangerous downfall.
If you are rushing into a new course or making a grand decision without knowing its pros and cons, then you are merely pushing yourself under the water.
When things go down, no one is going to come and save you.
Make an intelligent decision from the start rather than regret it later in life.
The whole purpose of this writing is to educate you about the various options.
There is a whole ocean of information spread all over the internet. Head on to Google and dive into the world of knowledge.
Enlisted are some of the aspects you must know beforehand:

  • Gear up and get to know about the types of incomes and what you are currently doing with your life.
  • If you are opting for investment, don’t dive into it without educating yourself about various options.

There are several vehicles for you to invest in, such as:
1) Stock Market
2) Bonds and Funds
3) Real Estate
4) Mutual Funds
5) Physical commodities
Along with this, you should review the best brokers for your work.

  • Get to know a little more about personal finance ratios.
  • Furthermore, you must also know what your net worth is and how to track it. You can always use these sites:
  • -> Mint.com
    -> Personal Capital
    -> Google Spreadsheet

  • Educate yourself regarding Emergency funds. These are the funds that you use in case of any emergency. When you are planning for your financial freedom, you need to give topmost priority to these.

Your savings and hard work will go in vain if you have no amount saved for emergencies.
Hence, dig deep into this matter as well.
Always make a prudent and intelligent decision when it comes to your personal finance.

6. Run After Opportunities, Not things

When it comes to youth, the most unfortunate habit is how they run after things.
I have clothes. I need more.
Let’s order pizza even when the whole refrigerator is full of fruits.
Buying expensive gadgets but relying on the ones they already have.
Fill your basket of life with opportunities, not things.
When you are young, you have got all the potential and energy; both physically and mentally. You can strive more, participate more actively, and make wise decisions for yourself.
Binge-watching Netflix will do you no good in the long run.
If you are looking for financial freedom, run after opportunities.
The world is throwing them at you every other day. There is no deficiency. All you need to do is try out your luck!
Given the times of this grave pandemic, the online world is submerging in the flood of online jobs for you.
YES! It gives you a perfect opportunity to earn money online, from the comfort of your homes.
Here’s how you can earn online:
Freelancing: there are several sites like Fiverr, Upwork, and freelancer itself that are more than eager to welcome starters. You can go for writing, web development, logo designing, and data entry. If you have even one skill, it will not go wasted.
Affiliate marketing: this one is the best option for people who are good with words and have got the convincing power. Grab your mobile and convince people for further marketing and see your bank balance increasing.
Start a Blog: Blogging is one of the most famous and renowned works adopted by our youngsters lately. In the world of media, you can pick any skill you excel at and start your blog. Whether it is photography, writings, Vlogs, or a Gaming blog, as long as it is innovative and unique, you are good to go.
As an alternative to online work, you can also opt for some part-time physical jobs such as:
-> Customer Service
-> Uber Driver
-> Home Tutor
-> Start a side business.
-> Work at a fast-food restaurant
Don’t just still idle, try your luck.

7. Start Small to Save Big

“SAVE SAVE, AND SAVE”
Embrace this mantra for the rest of your life.
One of the keys to achieving financial freedom is to save.
Save less but save more often!
Consider saving as the one turn along your way towards your destination. If you miss that one turn, you might never reach your goal.
Saving is a habit that will not only make you financially independent but will also bring you up in times of dark and conflicts.
The key to lead a prosperous life, save, save, and save.
“Save money and money will save you.”
For sure, adopting a new habit is always gruesome at first.
Hence, don’t rush into it. Start small to save big.
This way, you can save more persistently.
You don’t have to deny all the fun you owe to yourself. No, life is given once, might as well enjoy it to your fullest.
You can do that, but you can always play smart. Just start saving a little from your daily spendings, and you will see how easy it gets gradually.
What I suggest, start by saving $1 or if you can $2 from your everyday expenses and see how it does wonders for you.
“Do not save what is left after spending, but spend what is left after saving”.

8. Explore the World of Investment

If you have read our posts before, you must know how we strongly advocate about “Investment”.
A smart and intelligent investment at the right time will save you from so many monetary crises.
The right investment is your best shot to grow your money; however, there are risks involve but then again, what is life without risks?
Explore the world of investment; look out for rewarding options, research about the ways of investment. Learn o differentiate between passive and active investment and see what suits you the best.
There are several options for you to invest your money in, for instance:
1) Give your shot at real estate.
2) Try out Physical commodities that suit you the best.
3) Buy stocks from promising companies.
4) You can also consider Mutual bonds and Funds.
You must also be in touch with the market price of your preferred asset.
Always go for a smart investment that says, purchase the asset when its market price is low and sell it when it’s back up again.
Furthermore, keep an eye on depreciating assets such as vehicles, machinery, etc. These will result only in loss.
Also, while we are on the topic, never invest in a single-vehicle.
Always go for diversified investment.
Hence, before rushing into it blindly, explore its world to its depth, and make a smart choice.
It’s never too late to start.

9. Amend your Thoughts, Adopt Healthy Money Habits

It doesn’t matter how much you earn unless you don’t have healthy money habits.
Psychologically speaking, the mind controls everything. As the law of attraction dictates, you attract what you think.
Hence, always try to think about positive and healthy thoughts.
Tell your mind No, you don’t have to go out for movies to be happy. You can always watch it on your laptop and save your precious money.
As it is said by the legendary Warren Buffet, “The chains of habits are too light to be felt until they are too heavy to be broken”.
One bad habit can ruin a lifetime for you.
When it comes to Money Habits, always adopt a healthy one.
For instance,

  • Start saving.
  • Don’t just spend money unconsciously on useless things.
  • Stay updated about your bank balance.
  • Make a list before going shopping.
  • Open an emergency fund.
  • If you have enough money, give charity.
  • Take a limited amount of money with yourself while going out.

Now, these are some of the few habits that you can adopt.
The process might be slow, but you will see how these healthy habits bring along a positive change in your financial success.
For financial freedom, always tell yourself you can do it. A negative mind will only push you back.
Be bold and risk it.
“It’s not your salary that makes you rich; it’s your spending habits.”

10. Stay Financially Active

As the saying goes, “You can do anything you put your mind to”.
It might sound a bit exaggerated, but if you think about it, it is true.
The last but not least step for you to acquire financial freedom is to stay active.
Be actively engaged in your financial future.
Stay in touch with the world; try to keep up with its pace.
Explore and research more often. Try to come up with extraordinary ideas. But most importantly, keep on working hard.
Thanks to the internet and laptops today, it is a piece of cake to gain knowledge about the ongoing affairs. Try to catch up with current opportunities.
Lastly, keep yourself motivated. Read books, watch videos, stay tune with autobiographies of successful people around the globe. Get to know their lifestyle and their ways to success.
Skim through self-help books to boost up your self-esteem and bless yourself more confidence.
The more updated you are, the better you will be able to keep up with the astonishing pace of the world.
The hard work and discipline you show now will lay the foundation of success in your financial future.

The Bottom line

The bottom line is; financial freedom is not exactly effortless to achieve.
But with the right habits, prior knowledge, careful budgeting, mindful spending, you will never be far from your destination.
Think of it like this; you don’t want to be in your fifties regretting the chances you didn’t take when the time was right.
So, without a second thought, follow some of these simple strategies to be financially free in no time.
Get into the habit of saving more and mitigating debts.
Seek professional help, educate yourself, and change your thought process.
You will be happy and contented with the results!

author

ABOUT THE AUTHOR

Jun Sing Tan

I help young adults and working professionals achieve their financial goals with a full suite of risk management and wealth accumulation solutions. I firmly believe that financial education should be easy and achievable for all. I am committed to service and hope to be your one stop financial solution.

author

Jun Sing Tan

November 23, 2020

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