Money is a constant source of restlessness and stress. It casts its long shadow over every aspect of our daily lives. Regardless of one’s income, achieving financial freedom is ultimately a matter of control. Even in today’s age of consumerism where money seemingly reigns supreme on top of everyone’s list of priorities, there are steps to be taken.
Here are some of the measures you can apply to handling your finances. Again, the key word being – control.
A key step towards achieving financial freedom is having a strict plan. Hence, write down your budget for the month ahead. The best way to organize your budget is listing all of your expenses. That means accounting for each penny you spend on a monthly basis, and then assigning it to three different categories. The first one would be the core necessities, such as food or shelter. Second category contains items you could very well do without (e.g. a new car), but which improve your life(style). Thus, you will not be too eager to get rid of them that quickly. Third category is where you should begin, in terms of removing the costly and unnecessary. It basically contains impulse purchases which have a way of fooling us into believing that we in fact need them.
This way of thinking will help you prioritize. And, since you will be planning ahead, you will lose the burden of having to decide about your expenses as you go along. It is the very first hint of the freedom we are trying to achieve.
When writing your budget, make sure that each member of your household is involved. If each person making and spending the money is part of the plan, controlling your finances will be easier, too. It may sound complicated, but if you include even your children, it will help teach them about financial freedom from a young age, and benefit them later on.
When you start running your monthly finances by this principles, we advise you to review your budget on a daily and weekly basis. By doing so, you will be able to determine whether your projections have been realistic. Remember, it’s not too late to adjust your budget as you go along until you come to a final version.
If possible, when you create your budget, set aside a certain amount for emergencies. That way, you will be able to remain within your plan even in case of unforeseen circumstances.
Invest in yourself
The key to investing is NOT viewing it as some abstract, complicated, business-y affair. Instead – and that’s the trick – look at it as paying yourself.
Besides, there are plenty of easy-to-use online platforms and tools making investing simpler than ever. And there are various ways of paying yourself and thinking about the future. Some of them include starting a business, investing in real estate and retirement plans. When you scratch the surface and demystify what investing can essentially be, you’ll learn how to benefit in the long run. You can do so by allocating just a small fraction of your income.
Get rid of debt
There are many forms of debt – credit card, student loan, to name a few. With them looming over your head, you will never sustain complete financial freedom. Also, it is difficult to make any kind of strict budgetary plans if your debts are making them for you.
There are many helpful tools and strategies to free yourself of debt. For instance, Total Money Makeover by Dave Ramsey or Debt-Free: JFM’s Story of Overcoming Debt.
Prioritize the essentials
Identifying all the material goods in your life that are basically non-essential will open another path towards financial freedom. Start with the big ones. Do you need an extra room in your house, or do you need two cars at this moment in your life? Why not sell those excess material possessions online, even the smallest items? You will clear a physical and financial space in your life.
Perspective and giving back
The final tip relates not as much to concrete material assets, but your time and willingness to contribute. Namely, besides financial aid to the underprivileged, you can also do some community work or volunteering. That way, you will provide yourself with a useful reality check and come to appreciate your situation when seen in perspective.
The purpose of these tips was not to say that achieving financial freedom is easy (it is not). However, we have constructed them in a way that can be equally used regardless of your current financial situation. Remember, it is not just a matter of the size of your assets but rather the way you control them.
The most important step is to start planning. Do it right now and your future self will thank you!