The ability to have the economic resources and to decide how to spend it wisely, is what we call financial freedom. The vast majority of us have to start building slowly through our work and savings plans. In general, we want to have financial freedom for the education of our children, home ownership, retirement etc. But how to achieve your financial freedom? Here are some helpful tips:
Step 1. Determine your current situation.
To draw any plan focused on meeting a goal, we must first know where we stand. We must be aware of the decisions (good and bad) that we take, regarding the use of our money and to learn from them.
Step 2. Financial Freedom For What Purpose?
Set your priorities so you can know how to earn and spend money. For example, a time when you are time free and time for yourself. Find a job that allows you to enjoy some hours or days off during the year in some forest or nature reserve in the country. Your goals, short, medium and long term, write them down, review them regularly and focus on achieving them. And sort them into different levels to achieve different stages of your dreams.
Step 3. Take control.
Taking control of your financial life will put you on the path to achieve the independence you desire:
- Organize your money: determines what your income, your expenses and your bottom line for a month.
- Adjust your spending: consumer less money and more to pay debts. The key to form a heritage is learning to live on your own.
- Be selective: Recognize the difference between spending money to achieve goals and enjoy life, as opposed to spending it by spending it.
- Forging the path to your financial freedom: Once your debts are under control, plan to create a fund that will give you even more freedom over your finances. Save!
Step 4. Handle your credit wisely.
Consumer credit is what we use to buy certain items in our daily lives. It is the most dangerous! Since the higher the interest rate, and the longer you have a balance against, the more expensive will be the new purchases you make. Avoid at all cost! However, not all debts are bad debts, there are useful ones, giving something of value, like a house or education for your children.
Step 5. Use your money to create more money.
Invest in instruments that are suitable for your target (long or short term), your risk tolerance and an instrument that pay you a real return above inflation.
Step 6. Protect yourself.
There are many examples of families who have lost all their property for not having had proper insurance protection. Hire the necessary insurance and do not forget also the succession estate planning through the development of a testament.
And as for you, do you still want financial freedom?