What does financial freedom mean to you? Is it having enough money to travel the world and indulge in luxuries or just living a comfortable life?
Whatever it means to you, the path to financial freedom depends on your goals.
In this article, we will explore 5 healthy financial habits to help youattain financial freedom.
Set Specific Financial Goals
It is important that you have a clear understanding of what your kind of “financial freedom” is. Based on your understanding, highlight what you desire to achieve financially, and then take intentional steps towards achieving those goals.Your goals needbe;
Specific- know exactly what you want.
Measurable – track your goals.
Achievable – dream big but be realistic.
Relevant – make sure these goals matter to you and align with your purpose.
Time-bound – always set a timeline to achieve your goals.
For example, if your financial goal for 2023 is to earn six figures, you need to have a specific amount in mind. This amount will help you choose the most effective channels (salary, business profit, or returns of investments) and attainable timelines (3 months, 6 months, or a year) that can help you reach that goal.
Setting specific financial goals keeps you focused. It also motivates you to save and invest your money wisely. You can use financial planning tools and apps to help you set and track your goals.
Live Below Your Means
This simply refer to spending less than you earn.It requires discipline and sacrifice, but it is essential if you want to achieve financial freedom.
Create a budget and stick to it. Your budget should include your monthly expenses, such as light or cable bill, groceries, transportation etc. You should also set aside money for savings and investments. Once you have created your budget, you need to stick to it and avoid unnecessary expenses. This may mean cutting back on eating out, shopping or taking vacations.
Invest Your Money Wisely
A salary or profit from your business is not enough to make you wealthy. To scale up your finances and achieve financial freedom in 2023, you must learn to invest. Educate yourself on different investment options, such as stocks, bonds, mutual funds, and real estate, and choose the ones that are best suited for your financial goals and risk tolerance.
You should also diversify your investments to reduce your risk. This means investing in different asset classes and industries to spread your risk. Consider working with a financial advisor to help you make informed investment decisions.
Pay Off Debts
“Debt is like any other trap, easy enough to get into, but hard enough to get out of.”– Henry Wheeler Shaw
Debt can be a significant barrier to achieving financial freedom. The more money you borrow, the less likely you are to be financially free.
High-interest debts can eat into your income and prevent you from saving and investing your money.
To pay off debt, you need to create a debt repayment plan – start by paying off any high-interest debts first and then work your way down to lower-interest debts. You can also consider consolidating your debt into a single loan with a lower interest rate.Once you have paid off your debt, you can redirect your money towards savings and investments.
Learn, Learn More, Learn Every Day
The financial landscape is constantly changing, and you need to stay up to date with the latest trends and developments to make informed financial decisions. Educate yourself by reading financial books and blogs, attending financial seminars and workshops, and working with a financial advisor.
Continuous education will also help you develop a growth mindset and a willingness to learn and adapt.
To start, set a reminder to read at least one article on financial freedom every day. The more you learn, the closer you are to becoming financially free.