How does the sound of freedom feel? It is like the wind blowing through your hair on a sandy beach. It is like a boat adrift on a calm sea-tossed ashore gently with no harm.
It is ecstatic, gleeful, and undeniably peaceful. This type of feeling is akin to what financial freedom presents. You are resourcefully prepared against eventualities and financially ready for exigencies.
Attaining this level of freedom does not come without a cost. It is a series of dedicated steps stringed on the arms of purpose and a good financial plan. These are the steps that we are taking into consideration in this article.
Tired of being immersed in debts and unhealthy financial entanglements? Are you seeking proven ways that can help you stop taking wrong financial decisions?
In this article, a concise approach toward proven habits that give financial freedom will be carefully examined. Then further application of these steps and their efficacies will be brought into view.
PROVEN HABITS THAT GIVE FINANCIAL FREEDOM
These are activities that have been practically utilized and it has proven to be efficient in their administration towards the achievement of a life of financial freedom.
To achieve this financial freedom, we will be considering some practical approach.
HAVE A GOAL-ORIENTED LIFE
Purpose drives the direction and enhances accountability. Our daily life is shrouded in financial commitments and nurtured by our devotion to achieving them.
To imbibe in habits that can give you financial freedom, an individual must have a goal-oriented life. Your financial plans must be carefully organized to encourage a debt-free life.
Set goals and ensure that you follow through on these goals. Prioritize your needs and not wants. Allot money to things that are important as this will enable you to curtail a spendthrift lifestyle.
A well-iterated plan can be drawn up to capture your set goals and these can be written down with a complimentary percentage assigned to each plan. According to the bureau of labor statistics, a survey was taken with these statistics derived.
- Housing – 32.9%
- Education – 2.3 %
- Apparel – 3.3 %
- Food – 12.5 %
- Transportation – 17 %
- Personal insurance – 11.3%
- Healthcare – 7.8%
- Cash contribution – 3.2%
- Miscellaneous – 3.2%
This statistic was drawn up to analyze the goal-setting attitudes of individuals over a period. With this survey, the planning habit of individuals was strategically collated to reveal the amount of time and finance spent on different areas of their life.
From this survey, the highest percentage was allotted to housing while education had the lowest allotment. This reflects the goal-setting lifestyle of a specific geographical location and in turn, affects their spending habit
Taking a cue from this perspective, you can draw up your own goal and set up your financial plan in tandem with your budget.
DRAW UP A BUDGET
A budget is a plan which depicts the estimation of a person’s income and expenses over a period.
A budget should reflect your earnings as it should not be above your income. Take the time to set this budget and stick to it as this will enable you to keep track of your expenses.
From the statistics shown above, you can draw up your budget with an allotted percentage to suit your income. Start with your needs while the wants sit at the bottom of the list.
Be decisive about your plans and weigh in on your decisions by sticking to your laid-down budget.
HAVE AN AUTOMATED SAVING PLAN
Saving plans can be taken to assist an individual to cultivate the habit of regular and compulsory savings, especially during the working or earning period of their life.
Then, to enforce this step, an automated saving plan can be enshrined into their earnings. This can be done either through the traditional savings account with the banks or investment.
Whichever method is employed to achieve an automated savings plan, the goal is to have a financial backup plan which provides an estate to the individual, especially during emergencies or financial exigencies.
LIVE WITHIN YOUR MEANS
Ever heard of the long adage ‘‘cut your coat according to your cloth’’? It is a proverb that has proven to be true in all contexts.
A prudent lifestyle can be achieved when financial plans are in tandem with your income. You can earn $2,200 per month yet you have a budget of $5,000, which will be a recipe for disaster.
Even if you decide to augment your income with other incentives such as loans and salary advance offers, these measures can only provide momentary relief as these are structures that will further walk you down the aisle of financial stress.
Enjoying financial freedom is an intentional step that is taken by an individual who wants a way out of financial slavery. Breaking out of the chains of debt is also one of the ways to live a life graced with financial freedom.
GET OUT OF DEBT
This is the fastest route to financial slavery. Debt is a deferred payment, usually an obligation that requires a person which is often referred to as the debtor, to pay money or other agreed-upon sums to another person, which is the creditor.
This agreed sum owed by a debtor to a lender or creditor is payable at a future date or period. Now, an individual embroiled in debt is torn between paying up the debt and meeting other monetary obligations.
Most times, an individual who is indebted to another loses the freedom to invest and have other financial structures that can improve their livelihood. They are constantly faced with the task of meeting up their debt obligations at the expense of other useful monetary commitments.
One of the habits that can encourage financial freedom is a lifestyle devoid of debt.
INVEST IN FINACIAL EDUCATION
A frugal lifestyle requires an investment as well. Be resourceful and invest in financial education materials as this will provide the blueprint for a structured and organized monetary lifestyle.
Buy books, watch tutorials, subscribe to YouTube channels, and get financial advisors that can walk you through the process of living a life driven by purpose and devoid of debt.
In summary, all these steps mentioned above are proven habits that have enabled individuals to achieve financial freedom and if utilized most practically, its efficiency is as potent as every iterated word in this article.