Everyone definitely wants to achieve financial freedom. Stop worrying about monthly bills, mortgage payments, or your kids’ education costs. Unfortunately, few people are able to be financially independent. So what is financial freedom and how to achieve it?
What is financial freedom?
Financial freedom is a state in which a person has sufficient savings, is debt free, has investments, and is able to fulfill the desired lifestyle for a relatively long period of time.
Additionally, someone who achieves financial independence will have enough passive income to make ends meet. In other words, you are no longer dependent on your monthly salary or income from active work.
Gaining financial freedom allows you to make your life choices without being weighed down by financial factors. You can take a job you love, a hobby you love, or take a vacation to a dream location without worrying about the cost.
Benefits of Achieving Financial Freedom
Achieving financial freedom can have many benefits, from reducing stress to improving quality of life to providing financial security. Here’s the review!
1. Achieve financial independence
With financial freedom, a person has the financial freedom to make decisions about their life without being weighed down by financial factors. This allows a person to do the things they really want and achieve their lifelong dreams without having to worry.
2. Reduce stress
Not having financial problems is one of the best ways to relieve stress. With financial freedom, you no longer feel pressured by monthly bills or mortgage payments. This allows you to live in peace and focus more on the more important things in life.
3. Improving the quality of life
When a person is financially free, they have the freedom to do as they please and to pursue their life dreams without being held back by financial factors. This can improve the quality of life and create a greater sense of contentment and happiness.
4. Provides financial security
Financial freedom also provides financial security. In this state, a person has sufficient emergency resources to deal with undesirable situations such as job loss or disaster. This provides a greater sense of calm and security.
5. Provide more flexible time freedom
Financial freedom allows a person to manage their time and do whatever they want. In addition, one becomes more flexible when accepting a job without being fixed on the expected salary.
How to achieve financial freedom
It has to be admitted that gaining financial independence is not easy, especially for those of you who are still in the sandwich generation zone. However, that doesn’t mean it’s impossible to achieve. Here are some surefire ways to achieve financial freedom.
1. Create clear financial goals
Once you understand what financial freedom is, the next step is to set clear and realistic financial goals. Good financial goals must be measurable and have a specific time frame.
For example, your financial goal might be to save six times your base salary in an emergency, pay off debt within three years, or plan for future expenses for retirement.
2. Create a financial plan
After you have set clear financial goals, please take notes on financial planning. This record will really help you achieve your financial goals faster and more effectively.
Later, your financial plan records must include regular monthly expenses, total savings, total investments, and debt reduction. Everything must be recorded in detail and in detail.
3. Reduce monthly expenses
One of the best ways to gain financial independence is to reduce your monthly expenses. Identify unnecessary expense details. Then reduce or even eliminate these costs.
For example, if you always order coffee from a modern coffee shop, try buying home-ground coffee beans or coffee beans from the supermarket. After that, you can craft it at home with existing equipment. So you no longer have to eat coffee and waste money.
4. Increase your income
In addition to reducing monthly expenses, increasing income can also help achieve financial freedom faster. Thus, your burden can be supported by passive income.
Look for ways to increase your income, such as taking a part-time job, starting a side business, or developing new skills that could improve your career prospects.
5. Start investing
Investing can help you achieve financial freedom faster. Divide your funds into different investment vehicles according to your financial goals. Don’t forget to diversify your investment for maximum profit with minimum risk.
For example, you can invest in crowdfunding securities platform Bizhare. Not only do they generate promising returns, but they can also help fund the MSME companies listed here.
6. Pay off your debts
Debt can be a major obstacle on the way to financial freedom. Pay off your debt aggressively by making more than the minimum payment every month. Also, avoid buying unnecessary items with a credit card or Paylater.
By paying off your debts on time, you not only gain financial independence but also keep your credit score strong. So if you want to apply for a mortgage, you won’t be made difficult or even rejected because of a bad score.
7. Consultation with Financial Advisers
To achieve the desired financial freedom, you can use the services of a financial advisor. Especially if you need a more complex understanding of the financial world, this service can be of great help.
Hopefully, you can make a decision that doesn’t hurt you. A financial advisor can provide very useful insights, especially when you are unable to balance your income and expenses.
Achieving financial freedom requires a lot of discipline and sacrifice. However, there is hope that by gaining financial independence, a person can better plan for their future, such as taking longer vacations or taking early retirement, starting their own business, or providing social services to those in need.