What is Financial Freedom and How to Achieve Financial Freedom with 6 Excellent Steps
Financial freedom is the dream of every individual. But the truth is, most of them are not enjoying the financial freedom. Why? Here is 6 steps to financial freedom let you know how to achieve it.
1. Budgeting money
Budgeting help you to track your savings as well as expenses. Having proper budgeting give ultimate control over your money and help you to know the inflows and outflows of the money as well as what is remaining as savings. This would also help you to take better money decisions by avoiding unnecessary spending on ‘wants’ than ‘needs’
2. Control your expenses or Live in your means
To get control over money, one have to identify the outflow of money as unnecessary expenses such as smoking, having beer, eating out, branded items etc. Controlling the expenses would help to save money to a great extend that that can later use to grow your wealth through investing on various assets.
I never meant to stop all the expenses, but you should have a good control on the spending to those and ensure these are not affecting your finance.
Remember one of the major reason for unnecessary expense is the excess usage of credit cards. One need to control the same as well as focus a good credit score too.
3. Build steady income
It is necessary to build a steady income. It can be from a 9-5 job or from full time family business. However, it is highly recommended to check the possibility of creating additional streams of income, that can be passive or active. For example, starting a YouTube channel, blogging, part time job/activity or business, content writing etc.. depends on your passion and interest can easily convert to additional income sources for you.
4. Build savings
As mentioned in the point 1 and 2, you need to save money through all possible ways. Budgeting will help you to identify unnecessary expenses that can control to save money. You can use simple tips and tricks to save lots of money daily in home, work, food, shopping, travel, transportation, utilities etc… and that can be find here.
5. Invest and re-invest money
As said above, saving money alone will not give financial freedom to anyone. But, one should invest and reinvest the money wisely and intelligently to grow it to the maximum level. Getting good awareness and knowledge on the difference between savings and investing help you to take proper decisions with the money in hand.
6. Live in passive income
Living in passive income is an excellent idea. Income from side hustles, dividends from stocks and mutual funds, monthly returns from real estate such as rending a second home, shops warehouse, parking spaces etc, help one to not touch the original savings from full time job or business.
Having passive income also help to save lots of money that you are earning from the mainstream such as full time job or business.
So, that’s it. If you found anything to add with the above or found any better methods or ideas to support any of the above points, feel free to contact or comment below.