Financial Freedom ! You must have already heard this word. Is the only goal of your life to make money? Do you think you’ll be able to reach a point where you won’t have any money issues? All of these questions must be answered today. Today, we’ll talk about ten of these steps that can help you become financially independent and make a lot of money. This method, which consists of ten steps, is adapted from Grant Sabatier book Financial Freedom.
Step1. Recognize your position in life
You can’t be financially independent if you don’t know where you are now. It can be pretty depressing to see how much debt you have, how little money you have in savings, and how much money you need to get out. But these are important steps to take in the right direction for growth.
Make a list of all your debts first: mortgages, credit cards, student loans, car loans, and any other debt you have. Don’t forget about the money you got from your friends and family either.
Now, take two deep breaths and one more. Now, add all those numbers together. How much do you owe in total? Don’t worry if the number is large enough. We will demonstrate some of these strategies to you so that you can repay the entire loan. Congratulations to you if it is a small number!
Now, look over all of the money you’ve saved. Make a list of savings on sarees: Make a list of everything you have saved: stocks, savings accounts, retirement plans, company stock-matching programs, and retirement plans.
We will then include recurring monthly payments, which come from your salary, money from your side hustle, and other sources. Keep this number in mind because we can easily complete them with the help of Financial Freedom Tips.
Step 2. Positive Money Attitude
Debt can have a negative effect on morale. However, despite the fact that it appears to be gaining a lot of weight right now, remember that money is a positive thing. You ought to be financially independent.
According to Jen Sincero’s You Are a Badass at Making Money, people who don’t make a lot of money frequently experience feelings of shame when it comes to making money. As a result, the most significant obstacle that many people face when attempting to earn money is the belief that having money is bad. Many people feel guilty about having it and wanting it.
Financial Freedom Book says that just like food and water, money is a necessity. You can buy what you need and live the way you want. Therefore, if you want to become financially independent, you will need to consider money as a tool that can assist you in achieving your objectives, providing you with energy, and allowing you to lead a life free of the stress that you can enjoy. because having a negative attitude about money will subconsciously make it harder for you to acquire and keep the money.
Step 3 Goals should be specified.
Why do you need money? Do you want to get rid of all of your debt? Do you require a break from your 9-to-5 job? Are there any places you’ve always wanted to go? Do you need to save for a wedding, kids, or retirement? It was simple for the author to achieve financial independence because he was bound by an emotional goal. He desired to pay off his student loans and save for a first home. To be honest, it was thrilling to watch my debt decrease and my savings grow.
Because he was so excited to see the numbers change, he worked harder to earn more money in order to see a more significant change in his finances. Would they have achieved his desire for financial independence if he hadn’t tied the goal to something personal? Probably not. He wanted to move out of his parents’ house as soon as possible and pay off his debts. That desperate feeling kept him going on his journey. As a result, it’s important to know what our ultimate goal is.
And this planning becomes even more apparent when we write that goal down clearly. Then we can work toward our larger objective by discussing it in small groups and working on it individually. With this, we will always arrive on time or earlier than expected at our destination.
Step 4 Maintain a Spending Log
Keeping track of your spending is an essential step toward financial independence. You can also follow this with a lot of online tools. Alternately, a diary with only one date is another option. We ought to have an understanding of our monthly, weekly, and daily expenses. How much do we spend on housekeeping necessities and work-related expenses?
The costs of each must be noted, regardless of the category. The EMIs you pay each month, loans, all loans, where the money goes, and elsewhere, all need to be tracked.
Step 5 First, pay yourself.
The saying “pay yourself first” is probably something you’ve heard before. However, if you haven’t already, you’ll need to put a certain amount of money in your savings account before you pay anything else, like bills. Additionally, putting yourself first has helped a lot of people get closer to financial independence.
Why? Because if you want to pay $1,000 to yourself each pay period, whatever is left over must be used for bills. And if you don’t have enough money to pay those bills, you have to find a side job to make ends meet. Why? You can ensure that you will always set aside money to invest in yourself by paying yourself first. In contrast, you only get what’s left over, which typically isn’t enough to help you achieve financial independence.
You can also prioritize your own needs in other ways. You can ask to have money taken out for your retirement, for instance, if your company has a retirement savings program. You’ll be investing first in yourself and your future this way. After that, the money is taken out of your paycheck, and you can use the rest to pay your bills and other expenses.
Step 6 Reduce your expenses
Warren Buffett paid $31,500 for a five-bedroom house in 1958 and had not left it. His wealth is estimated to be around $100 billion. He can, of course, afford a more expensive and extensive residence. However, he may be one of the wealthiest people in the world due to his thriftiness. On the other hand, Kanye West doesn’t hesitate to show off his wealth. A $20 million mansion houses him. He also made the decision to ask Mark Zuckerberg for $1 billion on Twitter at one point, with $53 million in debt.
What distinguishes the two extremely successful gentlemen? West spent money he didn’t have, while Buffet didn’t spend more than he had to. The truth is that many wealthy individuals do not appear to be wealthy. Every day, Zuckerberg doesn’t change his boring t-shirt and jeans.
There are two advantages to cutting back on spending. You’ll have more money to save for your freedom financially. Second, you’ll discover that you don’t need nearly as much stuff to survive, which will also help you save more money.
Step 7 Get Experiential, Not Material
Life is brief. It is not necessary to save all of your money until you are 60 to 65. You are entitled to live life to the fullest. In the end, your experiences, not the things you own, will help you live a more fulfilled life. And are the things you buy ultimately making you happier? Does having a lot of debt from buying stuff make your life easier?
Let’s turn the switch now. What is your most happy memory? What had you been doing? Who was with you? Let’s make more memories in the same way.
Step 8 Delete Debt
Some people will advise you to pay off your debt rather than invest your money in stocks. That may be true if you are an expert stock picker. However, you may have even more debt if you have never invested in stocks. After paying off their last debt, many people experience the same emotions: relieved. However, even if you have $30,000 in the bank, you can’t call yourself financially free if you owe $50,000. You still have a $20,000 shortfall.
Although paying someone else isn’t as glamorous as having money in the bank, it is a step closer to financial independence. Debt repayment can be accomplished in one of two ways: Avalanche and snowball When you complete a snowball, the smallest debt is paid off first. When you pay off the debt with the highest interest rate, you are in an avalanche.
Naturally, you must decide what is most effective for you. The snowball effect, on the other hand, took place when the author worked toward eliminating debt. He was able to stay motivated as a result. He was motivated to tackle a much larger, lingering student loan because he was able to pay off his first debt, a $1,200 credit card bill, in just one month.
Step 9 Develop Additional Income Sources
Okay, at this point, you probably think, “My debt is significantly higher than my salary; If I don’t make enough, how am I going to pay it off? Blood, sweat, and tears must be shed if you want to achieve financial independence. Your 9-to-5 job might not be enough. If that is the case, you need to work harder and look for other sources of income besides your current position. There are experts who advocate having seven income streams. Congratulations if you have a 9-to-5 job; there are only six more to go!
As a result, we ought to keep both active and passive choices open. You can get a part-time job or a new job with more money for active income. You can start a blog, become an influencer, sell your courses online, or make audiobooks and podcasts for passive income.
Step 10 Invest money for your future
The final advice on achieving financial freedom is crucial. Let’s say you implement the recommendations in this article to reduce your debt and increase your savings. That might be enough to help you right now. But what happens if something unexpected happens? Will you be prepared for it? Saving money for bad days—for retirement or in the event of your death—is essential to ensuring that your family does not get into trouble.
If you work a 9-to-5 job, talk to your employer about adding a retirement plan or seeing if you already get money taken out of your paycheck for it. You never feel like you’re losing money because the deduction is taken out of your account before it gets to you. It’s also pretty cool to check it out on a regular basis and see your savings increase.
Friends, these are the ten steps you can take to make your financial journey better. Improve your life and the lives of those around you by taking each step at a time. In addition, if any of these points have been helpful to you, please share them in the comment section.