Every Penny Counts: How Saving Can Set you on the Path to Financial Freedom
- 23 Mar 2022
When it comes to life goals, financial freedom is usually at the top of most peoples lists!
Having an abundant cash flow to afford the lifestyle you want is what dreams are made of, but unfortunately, achieving financial freedom is not as plain sailing as it seems.
Many people go through life struggling to make ends meet, never mind putting some of that hard-earned cash every month into a savings account.
Although society doesn’t make it easy for people to achieve financial freedom, there are some do’s and don’ts to follow to work your way towards it.
Achieving your vision of financial freedom is going to take a shift in mindset and attitude. It’s a long journey to have a money-conscious mindset. It requires belief, self-control, and persistence above all, as well as these financial tips to help you on your way.
Build Your Income
It seems obvious, but not many people know how to do it - and if you live from paycheck to paycheck, you are probably wondering how it’s even possible to build your income.
The answer is to swap your time for money by getting a side job or putting in more hours in your current job to earn that extra money each month and SAVING IT!
It will take a huge amount of effort to earn the extra money, and it may seem like it’s not worth it at the beginning, but as you save this money and progress in your job, that light at the end will get brighter with a positive attitude towards money.
Control Your Debt
In reality, it’s best to stay away from debt, but in most cases of adult life - it's hard to avoid unless you come from a wealthy background.
Especially when you’re at a time of life where a house and car is a must, and the only way to get it is through a bank loan.
If you have debt, make sure to pay the credit balance in full every month to pay it off quicker and avoid the temptation to go further into debt for immaterial wants and needs.
A simple and effective way to control your debt and help you with finances is to hire an accountant.
Professional accountants like Lumbview Accounts understand finances and how to control money. They will draw up plans with you based on your financial situation to help you on your way to financial freedom.
Create an Emergency Fund
An emergency fund is a must if you want to enjoy financial freedom. Without such a fund, you could be in trouble when a sudden emergency arises.
Putting money aside every month into an emergency fund will come to your aid if you lose your job and need some money to keep you afloat until you find a source of income.
It's best to have 3 to 6 months of your monthly expenses saved into an emergency fund to give yourself enough money to survive off in emergencies.
One of the best ways to save money and potentially earn you a small fortune is investing it.
Once you start saving every month, put aside 15% to 20% of your income (if possible) into investments.
Investing in stocks, cryptocurrency, and mutual bonds long term is an efficient way of growing your finances because you are more likely to forget about it while it grows - compared to seeing the numbers in the bank that you can spend.
A wise investment over time could create a small fortune for you, and once you start growing your portfolio to the point the income matches your yearly salary (It may take years), you will be much closer to your financial dreams.
However, investing isn’t for everyone, as it requires patience and involves high risk.
Although, the rewards for long-term investments could result in you achieving financial freedom at a faster pace.