Category: Financial Freedom

5 Steps Towards Achieving Financial Freedom and Control

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.

Financial planning


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!



Financial Freedom and How it Relates to Your Life

We are all familiar with the usual expectations laid out in front of us in order to be successful. Get a proper education, and seek good employment. Save up and invest in your retirement fund so that you and your family are taken care of. In the meantime, try to progress in every way possible – by getting a larger house, couple of cars and other material possessions.

In such a world, and with those priorities, the vast majority of your time is dedicated to work and moving up the social ladder. Which is all fine. However, what happens if one wants to enjoy the fruits of their labor not in their retirement years, but in their prime?

This is where freedom comes into the equation. By tweaking those set expectations and limitations, you can gain the financial freedom allowing you to expand your options. For instance, take a year off and travel. Or switch your job and start your own business. Freedom relates mainly to choice.

Defining financial freedom

Instead of pursuing the usual “dream” of gaining freedom in our retirement years, let us break down the path towards freedom, one that you can embark on right now.

1 – Status quo

The starting point most of us find themselves in. A vicious cycle of relying on a steady income which pays the bills.

2 – Momentary relief

First sign of financial independence is cutting down your expenses and saving up some funds. These can then be invested, and the profit can be turned into a new regular income source. As your savings increase, so will your freedom. At a certain point, you will be able to start your own business or switch into a new professional field.

3 – Full independence

This is when the income gained by means other than employment surpasses the amount which covers all your expenses. You gain flexibility, which leads to independence. If you can afford to quit your previous job at this point, this means that your side business or investments have provided you with that option. Of course, a side business also implies much work, perhaps even more so. But if, in your case, it reflects your ambitions and desires, it is very much worth it. Remember, it is not a matter of what pays better. We are after something much bigger here – independence and freedom.

4 – The next step

The next and final step is getting to a point where your free savings are comfortably surpass your expenses. For some people this means not having to work any longer and living off their savings. For other, it is a platform for the creation of additional wealth. What’s in common is that reaching it will provide you with even more lifestyle-related options.

Is this the right concept for you?

To answer this, evaluate your current situation: does your current way of life satisfy you, are you happy with the balance between work and free time and does your job fulfill you?

These questions are not only for you to answer, but also for your partner, family, etc. Answering them won’t be easy, but when you do, you will have a much clearer picture. Maybe you’ll come to realize that your current job is perfectly satisfactory. In that case, pursuing phase No. 2 as described above might be what you should aspire to. Or you will find yourself in the large category of people who are not overly enthusiastic about their jobs, but are generally not eager to make any sudden changes. If so, the right way forward would still be to pursue a greater level of financial freedom. That way, you will be able to reevaluate your position and potentially switch careers in the future.

Naturally, if you belong to the group which is absolutely dissatisfied with their current work situation, you should immediately begin pursuing financial independence. In that case, don’t hesitate to make some unpleasant cuts with your eyes on the big picture. For instance, eliminating all unnecessary expenses, or even relocating to a place with lower living costs. It may sound drastic, but if your work makes you unhappy, these are steps worth taking. Just remember that money can be made (and saved), whereas time cannot.

That in mind, the future You will be grateful for every action that you take sooner than later.

The Difference Between Financial Freedom and Financial Independence


Having Financial Independence was a vital milestone in my life. After I attained it, I could have just given my notice and continued with my lifestyle. However, now there is something else on my mind. I want to achieve Financial Freedom as well.

The Basic Facts About Financial Freedom

I’ve realized that some people refer to financial freedom as a synonym for financial independence. However, those two terms are similar to me, yet there is a difference that sets them apart.

For me, financial independence means that I could quit my job now and live off my savings for the rest of my life. It might be a somewhat frugal lifestyle, but I would never run out of money.

It might sound impressive, but maybe you aren’t still convinced whether or not you want to keep your lifestyle the same. After all, interests and desires change over the years. The same thing happened to me as well.

I’ve come to understand that what I knew ten years ago, it doesn’t reflect my wants now. Furthermore, how can I know what my life will be in ten or thirty years?

Because of that, I still pick up my pager every time it wakes me up. I go to work, even though I know that the pager’s days are numbered. Why? It is because I want to achieve financial freedom. As soon as I think about it, everything calms down, and I feel confident. Soon, I’ll be able to retire without any regret. Also, I’ll be able to suffer through unexpected life blows without any trouble at all.

Advantages of having a financial freedom

Unlike Financial Independence, Financial Freedom allows you to change up your lifestyle if you get bored with it. For example, you can, without any regret, spend money on the overpriced internet on the plane. Or, you could always order your favorite thing off the menu. Maybe even hire the babysitter more often.

It also means that I could pay for things that are unexpected or things that I have no control over. For example, my apartment could get flooded. The tax laws may change, and suddenly I have to pay more every year. Therefore, financial freedom is a must, and it will help me get through these events with a smile on my face.

How much money should you have?


Let’s say that core expenses for my family are about $70,000. For Financial Independence, that means that I should save that much every year – for 25 years.

It would allow me to maintain my cushy lifestyle perfectly. However, there are the fluff costs – discretionary expenses. So, out of those $70,000, maybe $30,000 are certain treats. By maintaining that number, you’ll get FI.

But, what if you doubled the fluff expenses? It would allow you to spend more money on holidays, restaurants, babysitter, hot tubs. If you double those costs and add the core ones, it would add up to $100,000. In 25 years, that’s $2.5 million – and that’s how much my Financial Freedom is worth.

Stay on the safe side


Just because you’ll be saving that much money, it doesn’t mean that you should spend it whenever you want. It is a cushion that allows you to decide whether or not it’s the right moment to spend it.

By having that extra money, you are allowing yourself to say Yes or No to things. But, some of them will always stay a Treat or only for special occasions.

Nonetheless, when I reach my Financial Freedom, I could retire and say Yes to things that feel right – things that are worth the money.

Avoid spending too much


If you also strive to achieve Financial Freedom, you have to decide how you’ll use that extra cash. If you just double the discretionary expenses and spend it all, then you will fall into the Financial Independence category.

Baby steps first. Order that dessert, or tip well. Go to events that require you to pay the admission. Have real-world experiences that are worth the money. But, use the rest of it for insurance.

Pay insurance for your family, your home and your cars. That way, your FF will protect you from unforeseen expenses and lifestyle changes.

Sometimes, even maintaining your lifestyle can get expensive. Just look at the health insurance situation. Therefore, it is crucial to ensure yourself against all unpredictable transitions that might happen.


The Path Towards Financial Freedom


Financial freedom is not just about having money. Rather, it is about being able to run your life according to your needs and wishes. Instead of money being a burden and source of constant concern, the goal is to put yourself in a position in which you call the shots. That way, when unexpected events take place (and they will), you will be able to land on your feet and keep moving ahead.

Define financial freedom


Financial Freedom

Achieving financial freedom is a matter of goals set. But before that you have to take a good look at your circumstances and define what would help you feel financially independent. In a specific case, freedom might entail factors ranging from career choices, retirement timing, all the way to being able to afford items that will make you happy. It can also mean helping others in need.

Here are some of the steps that you can take on the path towards your financial independence:

Monthly budget

If you are aiming for financial freedom, planning is crucial. Put yourself in a position where you will plan and account for every penny that you and your family spend each month. Be rigorous and, no matter how wealthy you become in the process, keep maintaining a strict budget that you adhere to. Do not despair if your plan needs adjusting as you go along. That is normal and will only lead to long-term control.

Next goal: debt-free

 You cannot begin to accumulate wealth (and control) before clearing your debt.

After you start budgeting, you should notice an increase in your funds. Use this to save up a sum to keep aside for unexpected events. Once there, you start eliminating your debt. It is an uphill battle, and there are no quick solutions. However, few things can compare with the feeling of actually becoming debt-free. Finally, your income will indeed be yours. That should be your main motivation.

Choosing your career


Your career – and the income stemming from it – is your main asset. Still, when making choices, there are other factors to consider apart from the size of your salary. You do not want to be doing a job that doesn’t fulfill you, no matter how good it pays. The trick is to keep a good balance between those factors. Other important factors to keep in mind: long-term career plans, growth possibilities, and retirement options. Remember that the choices you make here will have a major influence on the way in which you handle your finances, in years to come.



Once you manage to get rid of debt, the next step should be to start building a savings fund to cover a) short-term emergencies b) large purchases or expenses such as vacations. That way, you’ll get more flexibility and options in your overall financial planning. And, more importantly, a foundation upon which you can take the next step.

Investment possibilities


With the previous step completed, you are ready to seek a financial advisor and consider your investment options in the long run. Begin by planning your retirement savings, aiming to find a tax-favorable solution to invest up to 15% of your income. Be sure to make use of any form of tax relief in the process, such as the Roth IRA retirement plan, for instance. Speaking of long-term, your next step could be to invest in an Education Savings Account. ESA also implies that, once paying for your kid’s college, these expenses will be tax-free.

Another form of investment is to pay off your mortgage, thus become the real estate’s owner. That way, your home will not be a burden, but rather, a part of your financial independence.

After that, and after you’ve used every benefit of tax-favored accounts, you can think of moving into taxable investments. Having a financial advisor pays off here, as you will be able to rely on quality pointers regarding the choice of mutual funds to invest in. Also, when choosing your advisor, you will need a reliable expert who will help you minimize risk, keep an overview of options ready for you, and keep an eye on the long-term goal: financial freedom.

Getting to the finish line

As you will come to realize, financial freedom means much more than simply being able to cover any expense. When you get to that point, you will be able to think beyond limitations and help others in need, too.

The path towards independence is by no means an easy one. But it is very worth taking!