Financial Freedom in Three Steps
So what is financial freedom? Unfortunately, a lot of people think that if you have plenty of money that means you will have all the freedom you need. There are many examples of people who have plenty of cash still feel unfulfilled if not depressed.
On the other hand there are plenty of examples of people who live modestly, have few worries and no cash needs and consider themselves financially free. There are even those who have very little but feel happy beyond words. Thus we can conclude that freedom is more than just money.
Financial Freedom is About Money But So Much More
Financial freedom is what you make it and how you define life. It is very much more than a big bank balance. It could mean the freedom to travel, the freedom to walk into a shop without worrying about checking the prices in the window. You might say that financial freedom isn’t so much as being rich but feeling comfortable and self-confident, without cash needs.
Now there is no one way to ensure financial help, any more than there is one universal definition of financial freedom. But here are three steps that should certainly move anyone a long way down the road.
Budgeting Your Money is Essential
Virtually everyone would agree that the very first thing you need to do is work out exactly what you are spending. This is more complicated than you might think as you would be surprised at the many different categories of expenditure that crop up in a family’s budget these days.
Fortunately you only have to go online you will soon find help to budget all your costs.
Once you know the total you expect to spend over a year, and include a ten per cent contingency, and compare it to the amount you have in income, you are ready to make the big decisions that cutting expenditure demands.
Now you can’t cut out everything but there has to be something that can be sacrificed. Such decisions are not particularly pleasant. What is going to go? The cable television? Perhaps cutting restaurant outings by 50% would help matters?
If you’re a smoker you could certainly try and cut it out and save thousands of dollars.
Staying Out of Debt with an Emergency Fund
Once you have improved your cash flow the next item in your quest for financial help is to boost your savings and also to create an emergency fund. Even if you could only save $25, it’s far better than nothing. If you could save $100 so much the better.
It is really important to have something that you could put away for the proverbial rainy day and having savings that you can fall back upon are key elements in financial freedom.
The final element in the financial freedom stakes is to eliminate debt as much as possible. Try and cut down all your credit cards and the use of a car title loan would enable you to pay off the lot and just concentrate on just one payment a month. You will be on the road to freedom.
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Category: Family Finances
It really is as easy as you described. It’s funny how so many people complicate budgeting, saving, and investing. It’s not rocket science. It just takes persistence and consistency.
And sacrifice. One thing most are not willing to do.