Everyone imagines a life of financial freedom, but few people feel they can actually achieve it. The truth is there are some great realistic ways to obtain the status if they are determined to put the work in. It may take an extended amount of time and diligent efforts, but financial freedom is a rewarding achievement anyone can manage when given the proper tools to get started.
Forget the Joneses. They’re bankrupting. There, I said it. It’s easy to get wrapped up in the sparkly lifestyles of others. In the best interest of your financial goals, it’s important to limit influences that may negatively impact your financial journey. Finding contentment is work in itself. Just remember that everyone else is on a different journey. And if I can be honest, a lot of people are going through a lot of effort to impress people that they don’t even like. The Joneses are going bankrupt. Do what you have to do to stay on track. This may include limiting your time on social media and culling through your virtual and physical friends lists to avoid the distraction.
Monitor your spending closely. True financial freedom can only come when you understand your spending habits and make sure you aren’t spending outside of your means. As has been evidenced by many wealthy individuals over time, it is easy to have money disappear fast when you aren’t being careful with your expenses. This applies not only to those who are struggling to make ends meet, as well as those who have disposable income.
- Create a functional budget for your household and monitor it closely. My husband manages this task daily and swears by Quicken. You can save money by picking up an older version as they are all very similar.
- Periodically watch what you are spending and determine why. Determine if those expenses are splurges or necessities and limit yourself so that the funds can go towards a debt and into savings for later.
- This also includes taking the time to monitor fees and costs on any service you pay for regularly like insurance, cell phone plans, and credit cards.
Downsize as much as possible. This is one of the easiest ways to help you on your way to financial freedom. Simply downsizing can eliminate a lot of your current expenses, as well as help you to save toward the future. Downsizing includes anything from purging unnecessary items from your home, maybe you need to sell a car that doesn’t work, or change contract cell phone service. Every little thing you manage to eliminate from your budget will help you succeed in keeping more money in your pocket.
Stop creating more debt. Hands down, you cannot be financially free if you are still creating debt. This means that while you may use credit cards, buy a new vehicle or even buy a house you are working toward paying those things off as soon as possible rather than holding onto the debt. When at all possible, do not go into debt of any kind. You can continue building your credit score by using credit cards, but immediately pay them off each month instead of carrying a balance.
Make savings a priority. Too many people do not give savings the level of priority it deserves. It is a mandatory part of your monthly budget much like your utilities, food and home payment. Saving money for the future keeps you from being caught in a bind during an emergency and possibly accumulating even more debt. For the savings challenged, Digit is a service that automatically figures out when and how much is safe to save based on your lifestyle. Digit takes the anxiety out of trying to figure out an arbitrary amount to transfer every month and they have a no-overdraft guarantee.
Make wise investments. Priority should be given toward paying off debt and savings when there’s excess money in your budget. Since one of the most common forms of high-interest debt involves secondary education you could look into refinancing your student loans if possible. How you save that money for the future does matter. While a standard bank savings account will often earn interest, you will want to look at long term investments. Retirement plans in the form of a 401k or IRA are one thing, but you may also want to look into stocks, mutual funds and wise investments through a financial advisor. These investments can lead to a great financial future when done strategically.
Opt for the best earnings potential. There are many ways you can make a little extra money along the way that will add up fast toward your ultimate goal of financial freedom. When choosing everything from your airline for the next frugal vacation to your next store credit card if you choose to use one, look for the best ways to make more money in the long run.
- “Shop” for the best interest on a bank savings account
- Use savings programs like Ebates, Ibotta, Cartwheel, and other similar rebate or coupon savings programs for purchases in stores and online.
- If choosing to use credit, find credit cards you will pay off monthly that offer the best cash back rewards programs.
- Sign up for rewards programs with everything you use regularly like grocery stores, travel sites, airlines, and more.
- Compare prices and rewards on every purchase to make sure you are saving the most up front as well as earning the most cash back.
Find another source of income. Sometimes an additional income is what you need to get ahead. It is not, however, an easy task. If you are working the same job you’ve had for years and know that your chance of getting a significant raise is slim, it’s time to sit down and brainstorm other means of income. It is not always easy to find suitable jobs, let alone better-paying jobs. However, there are a few great choices to help supplement your income.
- Take on a second part-time job on nights and weekends if your lifestyle allows
- Use your creative skills to craft items to sell on Etsy or similar e-commerce websites
- Learn a trade that can lead to a better paying career or side job (take night classes at a vocational school or online via Udemy or Lynda)
- Work from home part time doing freelance, blogging, or virtual assistant tasks
- Start your own business
- Become a paid product tester
These are some of the best and most realistic ways to find financial freedom no matter what your current status is financially. Using these tips will slowly build your income and finances to a point that allows you to provide for your family, live with purpose, and achieve long-term wealth.