Being free financially means that you can finance and maintain your desired lifestyle without a regular paycheck. Money tears families apart ruin relationships and marriages and keep people from pursuing their dreams. Troubles with money inject unnecessary stress, arguments, and anxiety into our daily lives to keep our discontent.
We all want to be independent in life, be it in the decisions we take or financial wise. The first step towards achieving financial freedom is having a paradigm shift in your attitude towards money. Some of us have a very bad interaction with money and we have terribly failed to achieve our financial goals. Most people inherit their behaviors and habits towards money from influential people in their lives, and this makes many fail to achieve their financial goals.
If you are looking forward to achieving financial freedom, there are notable things you need to do.
Take charge of your money
The simplest way of taking charge of your money is working with a budget. A budget simply involves a spending plan that helps you keep track of your finances. You may consider having a small notebook to record all your financial needs and expenditure. Ensure that you record every shilling you spend and keep track of where your money is coming from. Focus on your priorities and avoid mindless spending.
Get out of Debt
The first step towards getting out of debt is by cutting your costs. Debt puts your life on the backtrack and hinders your progress. Reduce your debt and aim at spending less than you earn. Get to know and keenly study your spending habits. Once you cut costs, allocate a portion of those finances to paying the debt. Avoid cutting a lot of costs at once as you may end up frustrated. The key is cutting costs gradually.
The power of savings
You need to save and supplement your income. You have to take care of your future by saving. Saving all involves preparing to spend in the future and being able to live a comfortable life throughout your whole life. You need to find means and ways of supplementing your budget. You need to set up a base for your financial well-being as careful financial planning can help you get away with money problems.
Overall, your options and choice of investing will be dictated mostly by the amount of time you have and your financial knowledge. It will also be determined by the goals you want to achieve. There are two key types of investments, which include active investments and passive ones. An active investment needs your daily input, you have to be there every day to help in managing the business. Active investments involve things such as owning livestock, running an agribusiness or running an enterprise.
Passive investments include things such as owning financial assets such as corporate bonds, treasury bonds, investing in unit trusts, money markets among others. The return on investment on passive incomes are generally very stable and safe. Finally, you need to establish your current financial positions and work towards improving it.