10 Top tips for achieving Financial Freedom
What is ‘Financial Freedom.?’ You may have heard about the term, but what does it actually mean?
Financial Freedom happens when you have enough money to be able to do what you want. Making money works for you rather than the other way around. Don’t get me wrong. It means not having to live paycheck to paycheck. It means controlling your finances and pursuing your passions and what makes you happy. If you want to leave your job, you can afford to live off your saved money. If you want to take a break from your career, you can take some time to follow your passions.
What does Financial Freedom mean to you?
Now that might seem like a dream come true for many of you reading this, or it might seem impossible for others. Financial freedom means having enough money to support me through an emergency or life event and build a secure life. Many years ago, when I was made redundant, I had paid off my debts but had focussed on this so aggressively I had no emergency to fall back on. With only one source of income, when this ended abruptly, I did not have enough money to last me through the summer in London. It was during this summer I started this blog and started this journey from being broke to achieving financial freedom.
“A goal is a dream with a deadline.” ~ Napoleon Hill
I love the start of the New Year. It’s time to start afresh and set new goals. What life goals do you want to achieve? What dreams do you have? What will make you happy and financially free? I managed to pay off £35k worth of debt, but it wasn’t easy. Set yourself short-term and long-term goals, and do not feel discouraged when your progress isn’t as fast as you hoped it would be. It’s better to save a little and more often than nothing at all.
Make a monthly budget.
I have been creating an annual and monthly budget for years. I always work out what is in my bank accounts at the start of each month and what is on my credit cards. Stress comes from not knowing; if you know your finances, you feel more in control of your life.
Financial freedom comes from spending less than your income, Spending less from your outgoings and increasing your income. Prioritise your basic needs, then look at all other expenses too.
Pay off your debts
If you have started 2023 saddled with debt. Don’t despair. January is always a tough month. Christmas is an expensive time, and house and credit card bills suddenly trickle through. If you are paid a monthly salary, there is usually a long time between your payments! Prioritising your debts is key as it will hold you back from being able to save, and it’s often a source of stress too. Making a plan to reduce your debts without racking up more is a great goal to commit to this year.
Automate your savings
I recommend using the Plum app to save and invest. Using AI takes money out of my account throughout the money, and I use this splitter to save for an emergency fund and a rainy day fund and tested the waters of investing. I do not recommend investing until you have paid off your debts and prioritised saving for an emergency fund. Why not try it for yourself?
Start to invest
My key goal this year is to build financial wealth. I have spent years paying off debt and building an emergency fund. I bought an investing course last year but became too busy to apply these learnings. The Crypto and Stock markets have been volatile in 2022 and promise to be again this year. With warnings of a 2023 recession and deflation. So many ‘experts’ on TikTok, YouTube and Instagram offer their views on what to do next, but make sure you check what these experts tell you. Also, be really careful of scams this year, which target people wanting to get out of debt or make money quickly—research before you buy.
When Jeff Bezos asked Warren Buffet why so many people don’t copy his way of investing. He responded, “nobody wants to get rich slowly.”
I opened an Etoro account to buy and sell stocks to test the waters this year. 2022 has proved to be one of the most volatile years, and next year promises to be just as unpredictable. However, it is very simple and easy to use, so why not dabble using this app?
I am not a financial advisor. I only invest what you can afford to lose.
1. Visualise the life you want
I am a visual person and often forget the power of visualisation. Why not build a Pinterest board and add everything you want? Build a board for the life you want and the things you want to save for.
2. Simplify everything
Create a budget you can maintain each month. Simplify everything by automating your savings. Not so aggressively, you pay the money you saved each month back into your current account. Just enough that you start to build some over time.
3. Don’t invest more than you can afford
Don’t invest more than you can afford. Make sure you research before committing to investing because investing without doing some due diligence is often just gambling. Diversifying your money is the way to minimise risk.