If you’re looking into the black hole of debt, the idea of financial freedom might feel far-fetched. At the very least, you think that you’ll need a few years to feel a sense of progress, but even then, you’ll always be worried about sliding back into debt. That doesn’t have to be your story. In this article, we are going to look at ways to fast track your way into financial freedom. These are tips that once you follow, you’ll be well on your way to a happier financial situation.
Before we dive in, let’s look at what financial freedom is and why it matters.
What is financial freedom?
For most of us, money controls us. With financial freedom, you take charge of your finances. That puts you in a space where you can make life decisions without being overly worried about the financial ramifications. You’re, therefore, able to have and maintain your desired lifestyle without financial matters being at the forefront of your mind. It is also something that you should be able to do without a regular paycheck.
Similar to financial freedom is financial independence. It is where you can have enough income to sustain your living expenses comfortably for the rest of your life. It is also being able to do so without having to be employed or even dependent on others. The income that you’ll be earning instead is passive income. In the modern era, both financial freedom and financial independents are considered modern-day retirement.
There are two aspects of financial freedom to think about. The first is being able to have money for your day-to-day needs. It also has a long-term financial plan that looks into savings for retirement and an emergency fund. We will touch on these along the way.
Let us now get into how to get financial freedom and fast
Know where you’re at
Ignoring mail will not make the bills disappear. If you’ve been afraid to open all your mail, it’s about time that you did. You meet to know the reality of where you are to move to where you want to be. It would be impossible to know how much you need to clear off our debts and becoming financially stable if you’re not away from all that you owe. For the areas you’re not clear, call the relevant companies and ask them for a statement.
Taking this first step is the hardest. That’s because coming to terms with how much you don’t have even in savings; it is depressing. It is also painful to realise that you’re living hand to mouth and still barely making it through the month. The purpose of these exercises is not to put a dumper in the way. As with a doctor, you need to know the full extent of the presenting issue before you can treat it. Therefore, look at it as the first step to healing and getting to financial into financial independence.
Add everything up. If it is a significant number, take a deep breath. It’s not the end of the world. It is the beginning of a journey, tough yes, but one you can get through. If it is small, then you can celebrate yourself for a bit, and then get back to the drawing board. After you’ve done this, look at your savings, money made from passive income including stocks, and side hustles, and add that up. Keep that amount in mind. If you don’t have it, don’t worry, we’ll get into how you’ll acquire them.
Track your spending
Before starting the journey toward financial freedom, download an app that can help you track your spending. Note the things that you spend on for a month, ensuring that you put in your income, expenses, or savings. Sure, you’re eager to staring your path to financial freedom, but you can’t know how bad things are without the statistic to back it up. See how much you’re spending on shoes, things you don’t need, and if you’re saving at all.
A snapshot of your spending habits will help you see where your money is going to. From there, you can decide, and firmly so, where you are going to channel that some money. Look at habits you have that are causing you to remain chained in debt and replace them with practices that will make or save you money.
Once you’re on track to financial freedom, keep using the financial management app. These apps help you stay focused, especially when you relax your habits and are threatening to get back into your old ways. Top money management apps provide you with a section where you can input your goals and due date and thus keeping you on track always.
Transform your thinking about money
“Show me the next tip to get financial freedom fast!”
Well, here we are. Your current thinking is what got you into the financial situation that you’re in at the moment. It is, therefore, for the best to consider the role that your thinking has played to get you into the present financial situation. There are several reasons for that, and one of them is that your way of thinking about money is flawed.
One such example is people feeling shame for being able to make tons of money. That kind of thinking might seem absurd, but self-sabotage, overspending and not saving as some of the manifestations of that kind of thinking. It shows that you’re not thinking positively about money; if you were, you would value it.
Part of changing your thinking is to think of money as a tool. It is what gets you through your life- you need it to survive. At the same time, you need to help you achieve your dreams and giving you the experience that you’ve always wanted. Surely, something that attains you that cannot be a bad thing. Be open to getting more money in your life, and it will surprise you to making it becomes much more manageable.
Become financially educated
The current knowledge you have is not working for you; that’s why you’re in debt. For that, you need resources to aid you in the transforming of your mind. That’s where financial education comes in. Simply put, it is an understanding of how money works. When you’re financially educated, you’re in a position to make financially sound decisions, as well as understanding the art of both investing and managing money.
The other name for financially educating is financial literacy. There is the element of education, and understanding how money gets made is spent and saved too. It is having the skills and the knowledge required to make the best decisions about money and doing so from an informed place. The choices you’re making at the moment are likely from a place where you don’t have a healthy relationship with money.
The best way to become financially literate includes reading books, finance magazines, listening to podcasts about money and wealth creation, taking a financial literacy course, and even using a financial management tool. Look for places where you can get information about money. Before spending, ask yourself is what you’re about to do is in line with the new data you’ve gathered. Always put the new knowledge you’ve acquired into use until it becomes second nature.
Plan for your money
If your salary comes in and you don’t have an idea for it, you’ll end up spending it on whatever catches your attention. Let’s say that you set a payment plan for your student loans. If you know you’re required to pay a certain amount during a particular date, you’re less likely to spend money on expensive coffee. That is especially if it is cutting into the amount that could be going to the loan.
Writing down your goals and coming up with a financial plan is essential to keep you focused. Put it where you can see every morning and before you go to bed so that you can remain focused. You might have to forgo those night outs or buying things merely because they are on sale. Indeed, fast-tracking your financial freedom needs you to have direction. Once you start paying off your debt and watching your savings increased, you’ll be all the more motivated to come up with even more significant goals and plan on how to get there.
Another way to keep you inspired is to have a vision board. There, put images of what you want. It could be a new house, a car, a holiday to your dream destination, whatever it is, put it down. It is vital that you focus on what you do what and not what you don’t want. “I don’t want to be broke” is not a goal. Instead, “I want to have achieved x by x date” is a better and more practical goal.
Pay off your debt
Your account balance might be impressive, where you have £30,000 in the bank. However, if you have £50,000 in student loans, then really, your real bank balance is -£20,000. Don’t let your bank balance fool you into thinking that you have a lot of money when you still have car loans, credit card debts, and a mortgage to pay.
The reality is, it is not your current bank balance that will bring you financial freedom. It is the actual value of what you have left that matters. Paying off debt doesn’t feel good, but it is essential all the same. Start off by paying off the smaller debts and then tackling larger ones after. It keeps you motivated, and you also get to see your debts dwindle until there is none left.
As you’re paying off your debts, think of the fantastic feeling that you’ll get once they are out of the way. Chase that feeling, and reality, until you get it. That way, when money now starts coming into your account, you can now appreciate your real net worth. Additionally, you’ll be motivated to find ways to keep that bank balance rising along with your savings.
Pay yourself first
This piece of advice is not for entrepreneurs only. What it means merely is putting aside money for your savings before touching it for anything else. Set up a savings account where you put a given percentage of your income, between 10 and 30 percent. You can talk to your bank to send the specified amount to a savings account when money gets into your checking account. The reason you want to do that is that it is harder to save money that’s in your hand.
The other reason to do that is so that you can keep a handle on your spending. If you don’t have a way to access the savings, you’ll have to make do with what you have at hand. Your priorities become very clear once your savings are out of the way. You’ll be forced to pay all your bills, purchase only necessities, and other vital expenses. Done right, you should have little left. However, if you’re still left with a significant amount, choose to increase your savings to avoid impulse buying and other unhealthy spending practices.
The thing to remember is that the first stage of attaining financial freedom is having a clear picture of your current financial state. After, you have to look at the limiting beliefs that have kept you away from the life that you desperately want to lead. Discipline is also something that you need to employ if you are to remain focus on the goal of finally getting financial independence.
Once you have aligned yourself with the seven steps above, you’re well on your way to attaining financial freedom fast. It is the perfect time to look for ways to create more money, either by finding a side hustle or seeking out passive income. The ideals on how to get money will begin to follow now that you understand that money is the tool that gets you to financial freedom. Remember, when you slip up, don’t beat yourself up or say down for long. Get back at it.