Having financial freedom is being able to make decisions that involve money in a lighter way and without great worries. The steps to get there depend on a crucial detail: the starting point of this journey. However, there are some actions that can be adapted and applied to the reality of each individual.
Read on to find out what steps you should take to achieve financial freedom.
Financial freedom involves being able to make choices considering other factors, leaving aside issues related to money. A financially free person can decide whether or not to go on a trip, attend an event, or anything else without having to think about their finances.
Of course, the meaning of financial freedom varies from person to person. After all, for some, it may be having a comfortable life, but nothing too extravagant, and for others, it involves a luxurious lifestyle. Once again we emphasize that everything depends on the starting point and where each one wants to arrive.
It is even worth differentiating the concept of financial freedom from financial independence. The second means getting to the point where you have the option to stop working forever and live only on the income from the accumulated amount. The idea of financial freedom is a little broader and is linked to what each person understands about being free.
Let's now go to the steps that will help you plan to achieve financial freedom. Remembering that each person must adapt them according to their own view on the subject.
Before anything else, it is important that you live within your means, considering time off to save for the future. Avoid living a lifestyle that compromises your entire budget, especially if it's just to keep up appearances.
Find the balance between being comfortable in the present and planning for the future. For this, you can check if you are spending on certain luxuries that can be dispensed with or adapted. It's all a matter of considering what your priorities are.
Many people go on living without analyzing their finances, they don't know how much they earn, let alone how much they spend. If the intention is to achieve financial freedom, it is essential to have this knowledge; because it is from this that you will make your planning. You need to know the values that go in and out to know what changes you can make in your routine to achieve your goals.
To always keep an eye on your finances, you need to record all your expenses. You can create a spreadsheet for this or use some application. In the chosen place, including all the values that leave, including payment of fixed expenses, food, leisure, and everything.
In addition to this record making your day-to-day easier and preventing you from forgetting to pay a bill, it will also help you identify unnecessary expenses that can be cut or reduced. The secret lies in having all visible information represented and not just in the mind.
If the intention is to achieve financial freedom, it is necessary to set aside a monthly amount to invest. Today, there are several investment options with variable yields, which depend on various issues. To make a good choice, it is interesting to have the support of a Financial Coach. Thus, he will indicate options that are in accordance with his objectives.
In addition to saving for the future, it is important to consider that emergencies can happen in the present. To avoid having the double concern of having to think about the issue itself and money, it is essential that you have a reserve to use in these cases.
Set aside another monthly amount for your emergency fund and keep it separate from the amount destined for the future. So, you can use it in cases of health, if you need an unexpected renovation at home or in your car, and so on.
If you have debts, plan to pay them off and be able to focus only on your goals. If there are installments in arrears, you need to analyze the interest and do your best to catch up as soon as possible.
If there is no delay, it is valid to analyze the discounts that would be offered for the advance payment. If there is no benefit to this advance, it may be more interesting to keep the amount you would use to pay applied and yielding. These are details in which a good Financial Coach can guide you.
One more key step involves analyzing your current financial earnings. Do you think they are enough to reach your goals? Is there a possibility of increasing income, either through an extra job or the current one? Doing this analysis will help you better understand your current state and identify potential opportunities.
Most people carry limiting beliefs related to money. Often, they were created over a lifetime, through family experiences. Some examples involve: “investments are for the rich”, “rich people are not good” and so on. Identify if you have any and work to get rid of them.
Setting goals is crucial to achieving them.
Finally, it is important to consider that life is constantly changing, so it is natural that plans need to be adapted whenever necessary. Just be careful not to make adaptations with the aim of making things easier in the present, harming the results in the future. Try to make changes when you really need to.
