Financial Freedom Is Saving Yourself From Dying A Little Everyday

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Have you ever felt trapped by your finances, struggling to make ends meet month after month? My childhood friend David knew that feeling all too well.

Growing up, his parents constantly worried about expenses vanishing before the next paycheck. Having last night's leftovers as breakfast was a norm for him. Vacations were limited to scenic detours on the way to visit relatives. Passing clothes down from older siblings was one of the ways they stretched their limited resources.

Despite the constant feeling of being strapped, David held onto a bigger dream. Not to land a high-paying job, but to build a future where financial freedom allowed him to live on his terms.

The kind of future where breakfast could be anything he wanted, even the occasional leftover spaghetti – but this time, by choice, not necessity.

A. What Is Having Financial Freedom?

Suze Orman, a well-known financial advisor and author, perfectly captures the essence of financial freedom.

Decyz defines financial freedom as having the power to make financial choices that allow you to live the life you want. It doesn't necessarily mean living a life of extravagant luxury. Instead, it's about having peace of mind regarding your finances, where you're not constantly worried about bills or what happens if you lose your job.

Contrary to popular belief, financial freedom is not solely determined by the amount of money one earns. Many people equate financial freedom with having a high income or being wealthy, but this is a misconception that fails to consider the broader aspects of financial well-being.

While a higher income can certainly make it easier to achieve financial freedom, it is not the sole determinant.

There are countless examples of individuals with modest incomes who have successfully achieved financial freedom through careful budgeting, smart saving, and strategic investing.

It's about how you manage and utilize the money you have, rather than how much you make.

As such, financial freedom means having enough saved and invested so that you can chase your dreams. It's about having control over your money, not the other way around. Ultimately, it's the freedom to choose a life you love, whether it's traveling the world, starting a business, or simply having quality time with family.

B. Why is it Important to Have Financial Freedom?

Remember David? I recently bumped into him at a beautiful beach resort in Malaysia, a world far away from the circumstances of his childhood.

The young David was replaced by a man enjoying a carefree vacation with his family. Gone was the stressed look that used to haunt his face. Instead, he radiated a sense of calm and contentment that was truly inspiring. The transformation struck me, and I couldn't help but ask, "David, what changed?"

A smile washed over his face. "Financial freedom," he replied.

We sat down with steaming cups of coffee as he went on to explain how careful budgeting, some smart investments, and a lot of hard work had opened doors he never thought possible. He was now living his dream life, a life where he had:

1. Security

David explained, "Remember how worried we always were about money growing up? Financial freedom has given me a safety net. I know my family is secure, and we don't have to constantly worry about making ends meet. It's a feeling of peace I can't even describe."

2. Flexibility

"Now," David continued, "I have the flexibility to choose how I spend my time. I can pursue these incredible experiences with my family, something we could never have afforded before.

I can also work smarter, not harder. I recently cut back to a four-day workweek to spend more quality time with the kids. Financial freedom allows me to make these choices without jeopardizing my long-term goals.”

3. Opportunities

David's eyes sparkled as he spoke about opportunity. "I always wanted to be a travel writer, but juggling a demanding job and finances made it impossible. Financial freedom allowed me to change that. With careful budgeting and planning, I was able to invest in travel writing courses to sharpen my skills.

Then, I started a travel blog to build a portfolio and establish myself as a writer. It wasn't easy, but the freedom to dedicate time and effort without worrying about immediate financial repercussions helped me. Now, I'm getting paid to write about the adventures I've always craved! It's a dream come true, and it all started with taking control of my finances."

4. Improved Relationships

David confided, "Growing up, money was a constant source of stress for my family. My parents rarely had time for anything beyond working and worrying about bills. It definitely put a strain on their relationship, and that tension trickled down to us kids.”

A thoughtful expression crossed his face. "Financial security has lifted that burden. We can spend quality time together without the constant financial worries looming over us. We can focus on experiences and creating memories together, rather than just making ends meet. It's brought us closer and strengthened the foundation of our family."

5. Peace of Mind

“The biggest benefit, though," David said with a sigh of contentment, "is the peace of mind. I remember the sleepless nights I spent worrying about my future.

Financial freedom has eliminated that constant anxiety. Now, I am my own boss. I can sleep soundly knowing my family is secure, and we have a buffer for life's little surprises."

He smiled. "It's a freedom that goes beyond just material possessions. It's the freedom to focus on what truly matters, to live life to the fullest, and to embrace the future with confidence. That, for me, is priceless." David rose, stretching his arms towards the endless blue sky.

Looking at David’s situation financial freedom gives you:

Security
Flexibility
Opportunities
Peace Of Mind
Improves Relationships.

C. The 5 Pillars of Financial Freedom

From David's story, I learned an important lesson. He wasn't magically handed a fortune, but he learned the secrets to building a secure future. Wondering what are the 5 essential pillars upon which you can build your financial freedom? Here you go:

What are the 5 Pillars of Financial Freedom?

1. Income Generation

Having a steady income to cover your needs and some wants is essential. Explore ways to increase your income. Whether through a traditional job, freelancing, entrepreneurship, or passive income streams, diversifying your sources of income can provide stability and opportunity.

Action Step: Dust off your resume, research online courses, or brainstorm creative side hustles. Remember, a little extra income can go a long way towards achieving your financial goals.

2. Savings

Pay yourself first! Develop a habit of saving consistently so you can invest those savings to grow your wealth over time.

Action Step: You can set up a budget and automate transfers to your savings account no matter how small. You can then research different investment options based on your risk tolerance and goals.

3. Debt Management

“Debt is a short-term solution to a long-term problem.”

— Ziad K. Abdelnour

High-interest debt can be a major roadblock to your financial freedom. Develop a plan to pay down debt and avoid taking on loans unless extremely necessary.

Action Step: Face your debt head-on. There are resources and tools available to help you create a debt payoff plan. Remember, financial freedom starts with feeling in control.

4. Investing for Growth

Investing for growth involves the strategic allocation of your resources to assets that have the potential to appreciate over time. Whether it's stocks, real estate, or business ventures, investing wisely can accelerate your journey towards financial freedom.

Action Step: Research different asset classes and consider seeking professional guidance if needed. Remember, Albert Einstein called compound interest the "eighth wonder of the world." Let your money work for you!

5. Minimizing Expenses

“It’s not how much money you make, but how much money you keep, how hard it works for you, and how many generations you keep it for.”

— Robert Kiyosaki

Minimizing expenses is about optimizing your spending habits to maximize savings.

By living frugally, avoiding unnecessary purchases, and prioritizing value over material possessions, you can free up resources to invest in your future and achieve financial freedom faster.

Action Step: Track your spending and identify areas where you can cut back without sacrificing your quality of life. Create a budget and look for ways to save on everyday purchases and subscriptions. Living frugally doesn't mean living poorly, it means living smartly!

By focusing on these pillars, you can build a solid foundation for financial freedom. Remember, it's a journey, not a destination. Be patient, stay focused, and celebrate your progress along the way!

D. 7 Steps to Achieve Financial Freedom and Retire Early

In today's world, with rising costs squeezing our wallets and the gap between income and expenses widening, achieving financial freedom and retiring early can feel like a distant dream.

But what if I told you it's more achievable than you think? The key lies in taking action and building a solid foundation for your financial future. Here are the 7 steps I've begun implementing to pave my way to early retirement:

1. Set Clear Financial Goals

The first step is to ditch the blurry vision board and define your ideal future with laser focus. Do you see yourself basking on a beach in Thailand by 50? Or perhaps pursuing a lifelong passion for pottery in a charming Italian village?

Setting clear financial goals provides direction and motivation, guiding your actions towards a desired outcome and helping you stay focused on what truly matters in your life.

2. Track Your Income and Expenses

It's time to face the numbers head-on. By meticulously tracking your income and expenses, you gain invaluable insight into your financial habits and where your money is really going. This awareness lays the groundwork for informed decision-making and empowers you to make strategic adjustments to your spending and saving habits.

3. Build an Emergency Fund

Life is unpredictable, and emergencies can strike when you least expect them. That's why it's important to build a robust emergency fund to weather any financial storms that may come your way. Aim to set aside enough to cover at least three to six months' worth of living expenses, providing you with a safety net and peace of mind in times of need.

4. Budget For Discipline

A budget isn't just a restrictive list of numbers; it's a powerful tool that cultivates financial discipline and empowers you to navigate towards your early retirement goals. Explore different budgeting methods to find what works best for you.

The 50/30/20 Rule: This popular method allocates 50% of your income to needs (housing, groceries), 30% to wants (entertainment, dining out), and 20% to savings/debt repayment.
Zero-Based Budgeting: This method assigns every dollar of income a specific purpose, ensuring nothing gets left unaccounted for.

5. Mindful Spending

Mindful spending is all about making your money work for you. It's about ditching impulse buys and prioritizing needs over wants.

It’s spending consciously with your early retirement goals in mind. Implementing this practice helps you avoid blowing money on things you don't need. It’s also synonymous with controlling discretionary spending which is recommended as a financial freedom tip.

6. Boost Your Earnings

Financial freedom is a two-part strategy: controlling your spending (like we discussed) and growing your overall wealth. Think of it like multitasking your money! While some savings go towards your emergency fund, the rest can be strategically invested to generate passive income streams. This passive income can work for you in the background, accelerating your progress towards early retirement.

7. Live Within Your Means

“Financial peace isn’t the acquisition of stuff. It’s learning to live on less than you make, so you can give money back and have money to invest. You can’t win until you do this.”

— Dave Ramsey

Simply put, spending less than you earn creates a vital surplus. This extra money becomes your resource for building a secure emergency fund, tackling high-interest debt, and most importantly, investing for your future – all crucial steps towards achieving early retirement.

In addition to following this 7-step framework, I'm also actively practicing simple habits that act like daily financial boosters. These 12 financial freedom habits, for example: packing lunch, setting spending limits, or selling unused items, are like tightening the screws on my financial future. Each small act keeps me mindful of my spending and fuels my progress toward the dream of early retirement.

E. BJ Fogg’s Inspiring Journey to Financial Freedom

BJ Fogg, a renowned behavior scientist at Stanford, wasn't always financially free. Despite a prestigious position and a good salary, he found himself trapped in a cycle of debt.

However, by applying his own understanding of behavior change, Fogg embarked on a remarkable journey that led him to financial freedom in just a few years.

Financial Freedom And How To Achieve It?

I. The Turning Point:

The catalyst for change for Fogg came when he realized his spending habits were on autopilot. He wasn't making conscious choices about his money, and his debt was steadily growing. This lack of awareness became his wake-up call.

II. Fogg's Behavioral Approach to Financial Freedom:

Fogg, an expert in understanding how habits form, decided to apply his knowledge to his own financial situation. Here's how he did it:

Identifying Triggers & Tiny Habits: He started by pinpointing the triggers that led to impulsive spending. For example, walking past a coffee shop was a cue for him to buy a latte. Fogg then implemented "tiny habits" to disrupt these automatic behaviors. He started bringing a thermos filled with coffee from home, eliminating the cafe temptation.
Automating Savings: Fogg understood the power of automation in habit formation. He set up automatic transfers to move a portion of his paycheck directly to his savings account, ensuring he "paid himself first" before any other expenses.
The "Celebrate Every Penny Saved" Mentality: Fogg gamified his financial journey. He tracked his progress diligently and celebrated every dollar saved. This positive reinforcement kept him motivated and on track.
Prioritizing Experiences Over Material Possessions: Fogg reassessed his values and realized true happiness wouldn't come from material possessions. He shifted his focus towards spending money on experiences that created lasting memories, like weekend getaways with family.

III. The Outcome:

By employing these behavior-changing strategies, Fogg achieved significant financial progress. He paid off his debt, built a healthy emergency fund, and achieved financial freedom much faster than he initially thought possible.

F. Decyz POV On Financial Freedom

As we close this exploration of financial freedom, remember this: your financial destiny is not predetermined by your income or circumstances.

It's about the choices you make every day. By embracing the principles of financial freedom, setting clear goals, and cultivating disciplined habits, you have the power to transform your financial future.

Now is the time to take action. Start small, but start today. Whether it's tracking your expenses, setting aside savings, or seeking new opportunities for income growth, every step you take brings you closer towards steps to financial freedom.

At Decyz, I challenge you to rewrite your financial destiny now. Take control of your finances, pursue your dreams with confidence, and unlock the true potential of your wealth. Your journey on how to get financial freedom begins today.