Financial freedom is when you have enough savings, investments, and cash at hand that can afford the life you desire for yourself and your family. Therefore, it is growing the savings that can enable you to retire or pursue a career you would want. However, this should not be driven by earning a set salary every year. So, it means that your money is working for you and not you working for money.
Simple rules for financial freedom
a. Before you commit to your expenditures, be well aware of your net pay and estimate the amount available for expenses. However, this is after all your deductions.
b. You should pay yourself as priority number one before paying for any bills or any other financial obligations. You should do this by setting aside some amount every month for your long-term goals and any emergencies.
c. Begin saving while you are still young. This is because your savings are determined by your interest and the amount of time over which you saved.
d. Make a comparison of the interest rates of different financial service providers so that you can get the best value for your money. Borrow what you can manage to repay. So, a responsible borrower is one who pays back after borrowing. This assures you of getting more credit in the future. Therefore, before getting a loan, make sure you check on your payment obligations with your available income
e. Always make a budget for your money. This is because it helps you live within your means after noting the available income at your disposal and the order of your priorities.
f. Take insurance. Insurance helps you avoid being stricken by financial losses. For instance illnesses or accidents, because the insurance helps you ease the burden of catering for the same.
g. Beware that your credit past history affects your future accessibility. This is because the rendering companies maintain your credit reports. Therefore, any negative report concerning your credit may affect your borrowing ability.
h. List your financial goals, the duration they should take, and the cost. However, the goals should be realistic and achievable. them.
i. Beware that nothing comes effortlessly. There are advertisements, salespeople, and financial offers that promise you anything for free. Also, they guarantee you investment returns such as opportunities that are non-financial. This should work as an eye-opener to you because the deal may sound too good.