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What is financial freedom and how do you get there?

Finance & Money

Posted on Wednesday, September 25, 2019

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What does financial freedom mean to you? You work hard, you spend your money wisely, you aim to put aside something for the future, all with the aim of one day not having to live from paycheque to paycheque. It’s a worthy goal, and you are never too young or too old to start working towards it.

 

Having the freedom to do what you love and not have to rely on a day job is not an impossible goal. It is, however, a process that can take decades. But if you don’t want to be a slave to a salary, here are a few things to consider:

 

 

1. Invest in things that grow

 

 

Most of the things we spend our money on lose value over time, which could be considered a waste. On the other hand, when you invest in property or upgrade your home, you expect it to grow in value, and taking good care of your health will potentially save you money in the long term.

 

Try looking around your home and evaluating everything you’ve spent money on. Was it worth it? Will those things end up helping to grow your money? Some may, but many items may be unnecessary, which means that money could have been saved or invested.

 

If you think like this before you spend money, you will be well on your way to making better spending decisions and saving money in the long run.

 

 

2. Don’t buy new cars

 

 

When we consider how much we spend on our cars, it’s hard to ignore the impact this has on our overall financial wellbeing. The minute you drive a new car out of the showroom, it starts to lose value at a rapid rate. After 5 years it will have lost about 60% of its value. Yes, cars are important and it’s necessary to have one that is reliable and roadworthy, but a sensible second-hand purchase is the best way to go. Once you have reached financial freedom, you can buy your dream car… in cash! That’s well worth waiting for.

 

 

3. Use cash as your ‘fun money’

 

 

Rather than swiping your card every time you go out for a meal or treat the kids to a movie, use cash that you keep aside for entertainment. It’s all too easy to spend blindly, but if you look in your wallet and see your cash disappearing fast, it will make you think twice before spending. However, you don’t need to cut all the fun out of your life – give yourself an allowance for this kind of thing and stick to it.

 

 

4. Eat healthily at home

 

 

Looking after your health and wellness is an important part of reaching the goal of financial freedom. Obviously eating at home is cheaper than eating out, but it’s also good to remember that the better and healthier the diet you eat, the better you feel. It doesn't have to be expensive to eat healthily either. Plan your meals, shop with lists and buy seasonal produce.

 

 

5. Stay focused on the goal

 

 

Being able to picture what you want to achieve and when you want to achieve it by helps you to stay focused on the end goal. Split long-term financial goals and short-term goals. Write down these goals and stick them up somewhere you can see them every day. The journey to financial freedom is a long one and it’s easy to get sidetracked by the day-to-day demands on your money. Writing your goals down and looking at them daily will help keep them top of mind, motivating you to stick to your goals.

 

 

6. Have two streams of income

 

 

If you have a working spouse, then there are your 2 sources of income. If you are not in that position, consider a side hustle that can earn you money and boost your savings, even if it’s just a little bit. Work hard now, it will all be worth it when you are finally financially independent.

 

 

 

The information contained in this article is for information purposes only and does not constitute professional advice.

 

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