Do you find yourself wishing you had more money? You’re not alone. Majority of income earners assume that they need more money to achieve financial freedom, while all they need is a reality check and proper planning. Money can never be enough and even when you make millions, you’ll always find yourself wanting more if you don’t know how to manage it right.
If you’re struggling to stay afloat financially, here are some four tips that can help you make things right and start your journey to financial freedom.
1. Live within your means
Are you using 70% of your income to pay for an expensive rental apartment, or maybe you’re always taking vacations on credit? It’s time to grow up, face reality and start living within your means. Money does not adjust to your demands, you adjust your expenses to match your income.
Living an expensive lifestyle is one of the most common reasons as to why people never achieve financial freedom. They struggle to keep up with changing trends and live paycheck to paycheck. To avoid this kind of lifestyle, budget for each paycheck beforehand. In addition, ensure a percentage of your salary goes into savings. Remember, the amount you save is not optional or extra, it’s part of your budget and it’s a necessity.
2. Clear your debts
Statistics show that about 80% of Americans are drowning in some form of debt. Be it student loan, car loans, mortgage, piling health bills, gambling or credit card debt, this epidemic is the number one enemy to financial freedom. While student loans and mortgage loans are almost inevitable, credit card overuse is inexcusable. Clearing debt in an economy where having a loan is the norm requires huge sacrifice. Start by cutting your expenses and dedicating your income to loan repayment. Calculate your total loan amount and give yourself a deadline. Work towards paying the loan in the shortest time possible. To achieve this, try to live minimally until you clear the debt. Avoid unnecessary luxury and direct any extra income (such as salary increments or monetary incentives) toward paying the loan. The goal is to be debt free and to start afresh.
3. Have clearly defined financial goals
You could be debt free and very disciplined in your spending, but without clear financial goals, you will always end up using the money you save on all the wrong things. Emergencies will always creep up and John from high school will always be in need of a loan. This is why you need to define your goals at the beginning of the year. Establish the amount you want to save annually and what you want to do with it. Whether you want to buy a house, start a business, give to charity or get yourself a yacht, defining goals will give you a sense of direction. It will also motivate you to work harder in order to achieve your set goals.
4. Invest, invest, invest
When Robert Kiyosaki, the real estate guru and financial expert, says “savers are losers”, he is not very wrong. Maintaining an emergency kitty is a necessity but storing all your money in the bank hoping that you’ll never go broke is a terrible idea. Wise people invest their money to create multiple streams of income. Money may be inanimate but it can be tuned to reproduce. When you invest your money wisely, it ends up working for you, even when you’re sleeping. Real estate is one of those fields that never disappoint. Houses and land are constantly appreciating in value and every coin you invest in this field earns another coin or two. For this reason, you may want to get more information on Real Estate Investing For Beginners;Best Way To Get Started In Real Estate Investing. With your money in real estate, you’ll be on your way to amassing wealth.
Financial freedom is not for the weak, It requires sacrifice and smart decisions. However, many have achieved it and it has nothing to do with what they make in a month. It has everything to do with dedication and proper planning. If you set your mind to it, you can break away from the common cycle of financial uncertainty and debt.