Financial Freedom Tips To Set Yourself Free From The Daily Grind
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How can I achieve financial freedom?
When someone asks me this question, I always tell them one thing - who’s asking? Is it a young student, a housewife with no paying job, or someone working a stable job for 10 years but doesn’t have even $100 in savings?
If you’re one of the many seeking answers to achieving financial freedom, looking for shortcuts and financial freedom tips isn’t the answer. The path to achieving financial freedom begins with education, discipline, and action.
How Can I Achieve Financial Freedom?
As you begin your journey, you will come across many challenges specific to your situation and environment. For example, you could be like Mike who’s been saving for years but has no idea how to grow his money faster. Or you could be Jennifer who wants to earn more but doesn’t have the professional skills to land a high-paying job.
In this article, we will explore the financial freedom journey with easy guides that explain financial freedom pillars and steps and practical financial freedom tips.
This article is for all those seeking financial freedom and facing challenges. It addressed questions on financial freedom with specific and actionable steps to get you out of the rut and accelerate your path to financial freedom. Let’s get started!
A. Top 10 Financial Freedom Tips
Before we dive into the questions, we’re going to do a brain refresher on financial freedom tips. These tips will help answer some of the most important principles of financial freedom to ensure you’re on the right track.
Ten Tips To Crack Financial Freedom
1. Track Every Penny For 30 Days
“If you buy things you don’t need, you will soon sell things you need.”
What does this do? It helps you identify where you’re spending, for example, simple purchases like grabbing an afternoon snack or impulse spending on a pair of shoes you don’t need.
Slash those unnecessary expenses and save more. An afternoon snack every day could be costing you $5 daily, and $150 monthly. That’s $150 toward your savings account just by tracking your spending.
2. Make A 50/30/20 Budget
What Is A 50/30/20 Budget?
Creating a budget where 50% goes to essentials, 30% to wants, and 20% to savings and debt repayment ensures your spending is spread across evenly to reduce overspending, keep expenses in check, and have savings without debt.
“A penny saved is worth two pennies earned . . . after taxes.”
3. List All Debts & Tackle The Highest Interest Rate First
Debt is a major roadblock to financial freedom. When you’re busy paying off debts, especially high-interest ones like credit cards, you can’t save. Furthermore, the debt keeps increasing. So make paying off debts a priority so you can have money left to save and then invest.
“Pay off your debt first. Freedom from debt is worth more than any amount you can earn.”
4. Invest $25 Every Week, No Matter What!
Invest Consistently For Financial Freedom
Don’t get discouraged by small investments. By setting a fixed sum aside every week, your money is automatically adding up. Profit, in the long run, is better than no profit at all.
“Returns matter a lot. It’s our capital.”
5. Diversify With Multiple Investments
Diversifying your investments means spreading your money across different sectors of the market. For example, buying a small number of shares in different companies. Even if one company performs poorly, the others might balance it out.
“Don’t put all your eggs in one basket.”
6. Cut Discretionary Spends
Reduce impulse purchases, and discretionary unnecessary purchases and find free entertainment options! Plan free activities like hiking, visiting museums with free admission days, or movie nights at home. This helps you curb unnecessary spending and allows you to allocate that money toward your savings goals.
“Creating wealth comes down to discipline.”
7. Explore 3 Side Hustle Ideas
“Don’t be afraid to give up the good to go for the great.”
Explore ways to increase your income. Offer freelancing services on platforms like Upwork or Fiverr if you have writing or graphic design skills. Sell unused items online through platforms like eBay or Facebook Marketplace. If you have a knack for baking, consider selling homemade treats at local farmers markets. Every extra dollar earned goes towards your financial freedom.
8. Automate Savings & Bill Payments
Stay on track with your financial goals by automating your finances. Set up automatic transfers from your checking account to your savings account and for bill payments. This ensures you're saving consistently and avoids missed payments that could incur late fees. Plus, it removes the temptation to spend that money elsewhere.
9. Brush Up Your Financial Knowledge
Knowledge is power, especially when it comes to money management. Make financial literacy a priority. Devote 10-15 minutes a week to reading personal finance articles from reputable sources. Learn new strategies, stay updated on market trends, and gain inspiration from success stories.
10. Reward Yourself After Reaching A Financial Goal
Visualization is a powerful tool for motivation. Reward yourself every time you reach a target, for example, making your first million or buying your first property as an investment.
This could be anything from a weekend getaway to eating at your favorite restaurant. Having a clear vision of your reward keeps you focused and energized on your financial journey.
B. Financial Freedom Tips To Ace Common Misunderstandings
Now that you have the motivation to stick to your financial freedom journey, let’s get to answering those questions about how to get yourself moving financially.
Let’s find your answers:
1. If I Have Financial Freedom, Will I Never Have To Work Again?
Financial freedom doesn't necessarily mean never working again, but it gives you the choice of whether you want to work or not. It means having enough passive income (money earned without actively working) to cover your living expenses. You wouldn't need a traditional job to survive.
For example, Jake saved $50 by the time he was 25, using the financial freedom tips of doing side hustles, living frugally with minimal expenses, and putting his savings in a high-yield savings account.
He then invested the money in his first property, fixed it up with the handyman skills acquired doing years of side jobs, and sold it for a profit.
He used the profit to buy two smaller houses, put up one for rent, fixed the other one, and sold it to get a higher profit. Five years later, he could easily cover his cost of living through rentals alone.
Jake now has the financial freedom to choose his schedule, decide whether he wants to work or not, or do something he’s always wanted like starting a business or volunteer work.
The key is having options. Financial freedom gives you the control to decide how you spend your time and what kind of work (if any) you want to do.
2. How Can I Start Saving To Achieve Financial Freedom?
Whether you’re a single mom working two jobs, a struggling student, or a housewife, saving begins with the following financial freedom tips:
Cutting expenses by tracking them, for example, dumping all your spending receipts in a box to identify non-essential expenses.
Budgeting using the 50 20 30 rule, needs (rent, groceries, utilities), allocating 50% of your income30% to wants (dining out, entertainment), and 20% to savings and debt repayment.
Use a budgeting app to track your spending and automatically categorize expenses. Adjust your spending habits as necessary to stay within these percentages and ensure you’re saving regularly.
3. What Should I Do With A Small Inheritance To Build Financial Freedom?
Pay off any high-interest personal debt first, such as credit card balances, to avoid high interest costs. Then consider investing the remaining amount in shares, for example, buying a part of your favorite shoe brand to get an income (dividends) when they perform well.
Look into mutual funds which are essentially a pool of money by different people used for market investments. The mutual funds are managed by professional finance managers and the profits are distributed to the investors.
4. How Can I Choose A Savings Account To Build Financial Freedom?
Open a high-yield savings account. It offers a higher interest than a regular savings account, with the rate of return growing as your money grows. These accounts are usually easy to access, so your money is there when you need it for emergencies or unexpected expenses.
One of the top tips for financial freedom is to multiply money with the power of compounding - earning, investing your profit, reaping returns, and then reinvesting. When you have a significant amount of savings in your account, consider these low-risk and guaranteed return options:
Certificate of Deposits (CDs): Putting your savings in a fixed deposit to get a higher profit for a specified term, for example, 10 years.
Bonds: Lending your money to the government or companies for interest.
REITs (Real Estate Investment Trusts): Investing in a bunch of properties, like a mini-landlord, for rental income and money growth with time.
5. What’s The Best Way To Financial Freedom With Limited Funds?
Open a low-cost brokerage account with no minimum deposit requirements, such as those offered by Robinhood, Fidelity, or Charles Schwab.
A brokerage firm is a company that allows you to buy and sell investments like stocks, bonds, and mutual funds. These accounts are specifically used for investments, for example, stocks or mutual funds.
Start investing in index funds or ETFs (Exchange-Traded Funds) with small amounts. Index funds and ETFs are low-risk because they spread your investment across many stocks, for example, a small share in many companies.
You can compare it to buying scraps of different colored fabric to stitch a patchwork quilt. This reduces the risk if one company doesn't perform well, another will so you will still be making a profit.
Invest a fixed amount regularly, regardless of market conditions, to mitigate risk over time.
6. Financial Freedom Without A Formal Education Or Professional Skills?
Financial freedom tips teach us to utilize what we have, whether it's something we already have, for example, a spare room that can be rented out, or leveraging hidden skills, for example, cooking to sell meals or picking up freelancing clients online or through referrals if you’re a good writer.
Busy moms can leverage their teaching skills to give online tuitions or start a blog on hacks they’ve learned over the years, for example, parenting blogs.
You can also acquire new skills through free or low-cost online courses on platforms like Coursera or Udemy. Focus on high-demand fields like digital marketing, coding, or data entry.
Once you’ve gained some skills, create profiles on freelance websites like Upwork or Fiverr, and apply for entry-level positions or gigs. This can help you build a portfolio and gain experience, eventually leading to higher-paying opportunities.
7. If I Have No Savings But Want To Start Investing For Financial Freedom?
Begin by reading beginner-friendly personal finance books such as "The Simple Path to Wealth" by JL Collins, which explains investing in plain language. Follow financial blogs or podcasts on "How to make Money" to build your knowledge gradually. Start with basic concepts like stocks, bonds, and mutual funds, and practice using a virtual trading platform to get comfortable before investing real money.
Build an emergency fund of at least $1,000 by cutting unnecessary expenses, such as dining out or buying coffee daily, and setting aside a small portion of each paycheck.
Once you have the emergency fund, start investing small amounts regularly through a low-cost brokerage account or a robo-advisor. This way, you’re prepared for unexpected expenses and can start growing your wealth simultaneously.
8. Pay Off Credit Card Debt Quickly For Financial Freedom?
Use the debt avalanche method: focus on paying off the debt with the highest interest rate first while making minimum payments on others. This saves you the most money on interest.
Alternatively, if you find it hard to stay motivated, use the debt snowball method: pay off the smallest debts first to gain a sense of accomplishment and momentum. Also, consider a balance transfer to a card with a lower interest rate if you can pay off the debt during the promotional period.
C. Decyz POV On Financial Freedom Tips
“Start by doing what’s necessary, then do what’s possible, and suddenly, you’re doing the impossible.”
At Decyz, we encourage everyone who wants to attain financial freedom by beginning at the bottom but aiming for the top.
This means not giving up because you may be starting small, starting late in life, or you got divorced or faced a monetary loss.
All these struggles test our perseverance, make us more disciplined, and increase our learning, empowering us to reach heights we never could have done otherwise. The key ingredients are patience and time - so wait it out.
The rewards for financial freedom are immense, giving each one of us what we desire most, whether it’s leaving a job we hate, giving back to others, or spending a life that fulfills our innermost needs.
Financial freedom gives us the choice to lead a life doing what we were born to do. So keep climbing. Take a breather but get back up and don’t stop until you reach the top.
