BGMD Editorial TeamQuestion: What does Financial Freedom Mean to You?
As adults, we are faced with monetary issues almost all the time. On one hand are personal demands and objectives while on the other are family bills, academic demands, business costs, etc. In many cases, unexpected occurrences can be a pain in the neck especially when there is little or no financial prowess to solve whatever comes up.
This is the burden every mature person on earth seems to carry around in today’s world and women, being the pillars that make society work, are now involved more than ever. But how can one get above these waters?
Financial freedom is the answer. It is the goal of many individuals who have come to appreciate it after realizing that human wants, needs, and demands may never come to an end. Financial freedom mostly entails having enough financial power to live the kind of life you want for yourself and your family as well as take care of anything that arises foreseen or unforeseen.
To have financial freedom is to be free from fear of the present and of the uncertainties of the future. To get this, all you require is a little financial planning and in this article, I will personally share what it means to be financially independent and how to achieve it.
What Is Financial Freedom?
Financial freedom refers to the existence of enough residual income to cater to the living expenses of you and your family. It means having the financial muscle in the form of savings, investments, and liquid cash to do just what you desire.
At the attainment of financial freedom, you would have your money doing all the work for you and not vice versa.
It is commonplace in today’s world for people to work almost round the clock with little or nothing to show for it (career persons are more susceptible to this). They put in all their best into their jobs and get paid a fixed amount at regular intervals which they spend on health insurance, utility bills, rents, and other expenses.
Some of them might not even love the job they are doing but do it because they have to make ends meet. Such persons may find it hard to get what they want, when they want it and how they want it.
Some others who are lucky get a well-paying job. Their wages and allowances are one of the best in town and they live in the moment but lack financial management skills. They spend money in unintelligent ways, buy everything they want, and may return to ground zero with little or nothing to show for what they had previously.
In the above cases, we can see that the two sets of people make money but are not financially free. Financial freedom gives you the ability to purchase anything that you deem necessary. If you have it, you can offset living expenses that come your way without fear.
It also ensures that you make money doing what you love rather than what you just have to do to earn pay.
Financial freedom goes beyond just having enough to spend at the present; it also talks about your future. For many of us, one doesn’t financially freedom if one’s future isn’t assured.
This is where the right sense of savings and investments comes in. Financial freedom requires you to have as much financial knowledge as possible.
Having financial freedom doesn’t mean one is rich or has to be. Although many may see it this way there is a difference between both. So long you live a comfortable life with an assured future after retirement, you have financial freedom. You don’t have to worry about now or bother much about old age because you have things fixed up in terms of savings and investments.
Getting financial freedom requires you to play your part well. You need to have life goals, map out plans and live the best possible monetary lifestyle that can help achieve them. You also need to have some effective strategies at your disposal. Some of these strategies are:
1. Efficient use of time
Time is a valuable resource and for you to have financial freedom, you need to learn how to make efficient use of it. Although you may not have reached the stage where you can spend time just as you want (especially if you are still receiving a paycheck), investing more of your time in productive ventures is a major step in securing financial freedom.
As a kid growing up, my mum often made me understand that every second is precious not to be wasted, and to make use of it. We most times support her to what she needed us to do in her grocery shop or pay attention to what she was doing and despite the little, she made daily, it was able to take care of the family.
2. Spending within a budget
It is important to create a budget and stick to the budget no matter what. This of course can be difficult but with proper self-training, you can bring yourself to be better at it. You can create daily, weekly or monthly budgets that will inform your monetary decisions for the period in view. This is another great way to financial freedom.
3. Avoiding debt as much as possible
The greatest threat to financial freedom is debt and these days, they get packaged in form of loans. Try to clear off all existing debts and stay far from new ones. Credit card loans may seem attractive but they are not. With interest between 30 – 40 percent, credit card loans take a heavy toll on the user without his/her knowledge.
Taking loans might be inevitable in some cases such as educational loans, car loans, home loans, etc., but you have to know the conditions of the loans. In summary, it would be best for you to avoid debts, and to do this you must watch your credit.
4. Making investments
Investments are the magic wand that creates financial freedom. Their importance can never be overemphasized that’s why you keep hearing it again and again. Divide your income into parts and invest some part of it.
Investments no matter how little they might be today can do lots of magic in the future. Money grows in value and assets if used judiciously will yield others. The compounding effect on the little you put in today can yield much more that might save you on a rainy day. Learn to invest today.
5. Taking proper care of your stuff
As unimportant as this may seem to people, it’s a great step to financial freedom. Taking good care of your possessions and the home will prolong their longevity thereby removing the need to replace them.
If you can take good care of your clothes, shoes, car, home appliances and the rest, you would save some money which would have been used for their repairs. These monies can be used in other ventures and investments. This works perfectly for me and can do the same for you too.
6. Taking care of your health
Even though your health might not rake in lots of cash but maintaining good health is a great step to achieving financial freedom. Good health is important, little wonder the saying ‘health is wealth’ is rampant. If you are not in the best physical, mental or psychological state, you would not be in a position to make money. It could also cause you to spend more of what has been accumulated before.
Invest in your health, live a healthy lifestyle, eat healthily, exercise your body and mind, and visit the doctor for checkups at regular intervals and you would be limiting the number of premiums you get to pay as well as be in the right shape to achieve financial freedom.
Finally, freedom should be the goal of every individual. Although it might take some time to achieve, its benefits are far too numerous to back down. When you are financially free, you get back the control of your life in your hands which is far more important. Good luck on your journey to freedom.
Guest Post provided by Anonymous.
Motivational Stories is a series where I ask real women to share their unique viewpoints on financial-related topics.
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