The money will help you achieve your dreams, but the same money may rip off your peace of mind, ruin marriages, and keep people away from achieving their goals if not handled properly. Improper money management will induce unnecessary stress and anxiety into our daily life, and end up in perpetual discontent.
Even though many people find it this way in their life, living paycheck to paycheck, it shouldn’t be this way for all. You can attain financial freedom with the help of the real world matrix.
Road to financial freedom is not that long or tiresome to the truck. Even when you have premium six-figure careers, people tend to hold money back and remain in debts and chaos. On the other hand, there are lesser earning individuals who tend to remain debt free. You need to discover ways and diligently practice it to get rid of debts by eliminating any unnecessary expenses, doing proper financial stability planning, and mastering the game of finances.
Here are a few steps to consider which many have tried out to get rid of the struggles caused by money successfully.
1. Budgeting
We all heard it, but most believe it is for businesses or corporations. Many individuals don’t have any idea at all as to where all their money is going. We think that we know our financial, but it is fully out of our control. This is more so for those who are married and live with a family. So, the first step to the road of financial freedom is to establish a properly written monthly budget. In fact, the written part can be now replaced with many advanced mobile apps for budget, but the key is to have a documented budget. A few guidelines for proper budgeting as below:
– Budget categories:
Identify what is necessary for you by writing down the usual monthly in light of the last six months expenditures. Divide these expenses to general categories as food, utilities, housing, cars, insurance, transportation, gas, credit cards, clothes, Internet, phones, entertainment, pets, etc. There are suggestions available online and the online apps put forth many pre-set categories which you can make use of.
– Set boundaries
You can give each dollar in your budget a destination. By establishing such boundaries, you don’t have to worry about what you can purchase and what with your money than getting confused at you spend during mid-month.
– Include others too
If you are part of a family, then include everyone including your kids in the budget. Working together in a budget means taking from one category to fund for another based-on priority. Say, for example, your budget for clothing can be re-routed on a particular month to entertainment, etc. by coordinating with other persons too. Once all are on board and committed to gain financial freedom, things become much easier.
As a committed member of the family, it is also time to take stock of your employment and career opportunities. For example, the road to financial freedom will become clearer if your career starts paying you well. This means that as an individual, the key to getting out of debt is improving your earning potential. It does not matter if you feel that you are already pursuing the best career possible. Talking to experts will help shed light on important career transition decisions. If you wish to explore, read more.
2. Pay yourself, i.e., invest
Many tend to panic on hearing about investment. With a lot of options available and deliberate marketing reach to us, people think the investment is a complicated and abstruse affair to get involved. So, instead of taking investing that way, you consider it simply as paying yourself for the future. There are many online tools and support applications available now, which will not let you overwhelmed with investing.
You can’t first plan your investment and make it a part of the monthly budget. For those who are recovering from debts, also put forth many investment programs, which help enhance your credit scores too. You can think of various options like a home fund, retirement funds, wealth building funds, etc. Anytime is a good time to start investments, earliest the best.
Even when you are in debt and have no money to put into an investment, you try to devise a plan for investments. On making a plan first, an individual tends to fall into the track to meet that objective. The best way to invest is to automate your plan using the online banking services etc., which takes the best guesswork for your investing. Remember, the future won’t wait, and so you need to kick-start it today itself. Even when you invest is as low as 1% of the total income to start with, your future will surely thank you for it.
3. Become debt-free
The famous saying about debts settlement goes as “there is no such thing as good debt.” It is true, and some debts are worse than others, but there is never a good debt left. No one will be financially free until you are fully debt free. In terms of hierarchy, debtor always remains a slave to the lenders. In life, it is an amazing experience to have no car payments, home loans to pay off, no credit card repayments, and no student loan left out to shadow in your financial lifestyle. It’s possible.
Even though there are no such magic bullets to hit it, proper financial planning and realistic budgeting can help to become debt-free overtime. A step-by-step approach to financial planning will enable you to face the debts head-on and overcome them.
4. Minimalism
Minimalism is not just a concept is art and literature, but it is one of the key components in the road to financial freedom too. Taking a minimalist approach to budgeting and expenses will help clear the clutter in our lives, which makes an individual more focused on eliminating the debts and take better financial decisions with fewer resources in hand.
Simplification of financial decisions is all by identifying what all possessions are not adding value to your life and what expenses don’t give any relevant returns. You can become debt-free much quicker by eradicating all such overheads. For example, get rid of all the unwanted stuff through yard sales or flea markets, and you will see how this bring you closer to your financial goals.
However, minimalism is not about deprivation. Don’t live by compromising on the essential needs, but focus on what you can live without and cut it off to practice minimalism. You can afford to deprive yourself off many ephemeral satisfactions which may even help drive your life in a better direction.
Overall, financial freedom is not an easy goal, but you may know it even before reading this article. The most exciting things about the four points you’ve read about are that it is applicable to anyone in random who is anywhere in the socio-economic ladder. Whether you are an unemployment incentive or earns in six-figures, whether you live single or with a big family, you can see these fundamental principles working out for millions of individuals across the globe.
