What is Financial Freedom?
Financial freedom means not being tied to a job or occupation because you don’t have any other means to earn. It may sound like a farfetched dream because you see most people struggling in a job they don’t like to keep up with their lifestyle. But it is possible to achieve financial freedom and live on your own terms.
For that, you must be disciplined and follow a strategic financial budget with the perfect balance of earning, spending, saving and investing. This post shows you how!
8 Steps to Financial Freedom
Check out these game-changing tips to achieve financial freedom and build wealth to afford the lifestyle you want for yourself and your family.
Take Care of Your CIBIL Score
CIBIL score is a score that is maintained from 300 to 900 according to your credit history. All the credits you took and their repayment comes in the record to generate your credit or CIBIL report. Check your CIBIL score regularly to keep it above 750. Get it corrected if there is an error from the agency’s side.
If your unpaid bills and EMIs are weighing your CIBIL score down, pay all your dues on time for a few months to uplift your CIBIL score.
Set Specific Goals
Goals are vital to keep you on track. But making vague goals doesn’t help. Set time-bound and, if possible, number-based financial goals. For instance, write down how much you want to earn till a specific year with how much balance in your savings account and start working accordingly.
Follow a Monthly Budget
Planning a monthly home budget and following it diligently is an excellent idea to ensure that the essential utility bills and EMIs are paid on time. It will keep your CIBIL score maintained. And will also keep you away from the temptations to splurge on lavish expenses so that you don’t deviate from the track of saving and investing money.
Automate Your Savings
Another way to ensure that you don’t deviate from the path of achieving financial freedom is to set automatic systems for your money to be transferred to your designated savings and investment account. If you don’t have extra money, how will you spend it on unnecessary things?
Start Investing Now
Saving money means keeping some funds aside so you can use them when you need extra money. You earn some interest from savings. But investing money is done solely to earn exceptional interest from the market. Your money keeps adding up even when you are sleeping as the value of your investment increases. So never stop investing.
Don’t Hesitate in Negotiating
Every penny counts! If you are shy in negotiating, you miss out on some good deals and discounts. Are you afraid that you might seem cheap while negotiating? There’s a solution for that. Position yourself as a bulk buyer or repeat customer. This logic will justify your discount requirement, and you will save some good bucks.
Begin a Part-time Business
A side hustle can provide you that financial edge in a few months that your usual 9 to 5 job may or may not give you in years. Promote any of your hobbies or talent and start a part-time business to earn extra bucks. You never know if this part-time business idea could become your full-time occupation in some time.
Spend on Your Property Maintenance
If you are not using a property but keeping it aside to achieve financial freedom in the future, keep that property maintained. This is because when you need to sell the property, the repair and replacement cost can be tenfold the nominal monthly maintenance cost. Also, take care of your expensive items such as shoes and clothes so that they last longer.
Money Can Buy You Financial Freedom Provided You Plan Well
Experts recommend being wise with money and not spending it all at once on buying stuff. If you plan your expenses, investment and savings wisely, you can be financially free to choose whatever life path you like. These 8 steps to financial freedom enrich your life with the financial cushion in times of crisis and plenty of savings for your retirement.
Shiv Nanda is a financial analyst who currently lives in Bangalore (refusing to acknowledge the name change) and works with MoneyTap, India’s first app-based credit-line. Shiv is a true finance geek, and his friends love that. They always rely on him for advice on their investment choices, budgeting skills, personal financial matters and when they want to get a loan. He has made it his life’s mission to help and educate people on various financial topics, so email him your questions at firstname.lastname@example.org.