Financial Freedom For the Rest of Us

14 min readJul 19, 2022

How to Achieve Financial Freedom: 10 Strategies for Achieving Financial Independence!

Everyone wants financial freedom: the ability to choose what you do, where you live, and how you spend your time. Financial freedom is when you have enough money set aside so that regular expenses and unforeseen circumstances don’t put you at risk of going broke. Financial freedom is also known as financial independence or simply FI for short. People who have achieved a high level of financial independence are called financial independents, free agents, or FIFers (pronounced “fivers”). Financial freedom doesn’t necessarily mean retiring early or giving up work entirely. Instead, it means having the choice to do so. Financial freedom can take many forms: being able to cover basic living expenses without help from other people, having an investment portfolio that generates enough income to support one’s standard of living indefinitely, owning little or no liabilities, and being able. Although “financial independence” might mean different things to different individuals, it is generally understood to mean having enough money to live the life you desire without worrying about money.

It typically entails retiring early and only working when you want to.

Insider talked to individuals and couples who had amassed sufficient savings to be able to quit or curtail their day jobs and create the lives they genuinely desired. Insiders used their supporting data to verify their assertions regarding income and property ownership.

My Strategy for Financial Freedom

Financial Freedom may seem unattainable or even foreign to you. In this video, I break down what financial freedom is…

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10-STEP FORMULA TO ACHIEVE FINANCIAL FREEDOM IN 2022

Earn more, spend less First, increase your income, then reduce your expenses. It’s easier to increase your revenue than reduce your costs. Starting with your payment, look for ways to boost your income. Perhaps you can increase your hours at work, get a second job, or take on a side hustle. Automate your finances Automate as much as you can. Instead of making a regular payment to your savings account every month, have the bank automatically withdraw the money from your checking account. Make contributions to your retirement plans as soon as you are eligible. Diversify your portfolio Different investment assets don’t always move in tandem with each other. For example, the stock market has had long periods of decline, while the bond market has been relatively stable. Re-evaluate your expenses Ask yourself: Do I need that? It’s easy to get into the habit of spending money on certain things without questioning whether you need them. For example, do you need to pay for a gym membership if you can exercise in your home for free? — Strategies for investing in growth assets The best way to achieve financial freedom is to invest in growth assets. That is assets that grow in value over time. This can be stocks, real estate, a small business, or anything else that increases in value. Put another way: don’t put all your eggs in one basket!

1. Understand Where You’re At:

You cannot achieve financial independence without knowing where you are starting from. It can be discouraging to consider how much debt you have, how much money you need, and how much money you don’t have in savings. But this is a significant advance.

Make a list of all your debts, including your mortgage, credit card debt, student loans, vehicle loans, and any other loans you may have taken out. Include any money you borrowed from friends or family members over the years.

Take a big breath right now. And yet another, Then total up all the figures.

What sum of debt do you owe?

Don’t panic if the amount is large; I’ll discuss some strategies for paying it off later in this article. Congratulations if the number is low! Please feel free to provide your advice in the comments section below.

Then, consider all the money you have amassed in savings.

Make a list of all your savings, including your investments, retirement plans, corporate retirement matching programs, stocks, and savings accounts. The regular monthly payments you get, such as your salary or earnings from a side job, will then be added.

Consider these figures as we review the following few financial independence suggestions.

2. Look at Money Positively:

However, remember that money is a good thing, although it currently appears to be burdensome.

You should be financially independent.

People who don’t make much money frequently feel ashamed when it comes to making money claims Jen Sincero in her book You Are a Badass at Making Money. Many believe having money is terrible, making earning money the most considerable challenge they face. Many people feel guilty for both having it and wanting it. We use money every day to improve our lives, but we constantly focus on its drawbacks, according to Sincero. Simple necessities like food and water include cash. It enables you to purchase the required things and lead your desired life.

To attain financial freedom, you must view money as a tool enabling you to pursue your goals, stoke your motivation, and lead a life free from stress.

Because if you have a negative attitude toward money, you’ll unwittingly hurt your chances of getting and maintaining it.

3. Write Down Your Goals:

Why do you require cash?

Do you desire permanent debt relief? Do you long to leave the 9 to 5 grind? Is there a destination you’ve always yearned to visit? Do you need to save money for retirement, a wedding, or children?

Because I linked financial freedom to an emotional objective, I was able to attain it. I wanted to repay my student loans and start saving for a down payment on a house. And to be completely honest, watching the debt go while my savings increased was a fantastic feeling. I worked harder to earn more money to see a more enormous difference in my personal finances because I was so motivated by watching the numbers move. Would I have succeeded in my goal if I hadn’t connected my financial freedom with an emotional trigger? Most likely not. I was eager to leave my parents’ home and pay off my debt. Throughout my voyage, I remained inspired by that desperation.

Another intriguing event took place. On a scrap of paper in February 2016, I jotted down a couple of my objectives:

Earn $100,000 from online product sales.
Put aside $20,000 for a down payment.
Repay $24,000 in student loan debt.

That paper ended up getting lost, and I entirely forgot about it. After more than a year had passed and I had moved into my new house, I eventually discovered it in my notepad. And sure enough, I had finished all three. The funny thing was that I wasn’t even consciously considering those objectives.

4. Track Your Spending:

Monitoring your spending is a crucial step on the path to financial freedom.

You can use a tool like Mint, which will inform you of your spending habits, the categories in which you’ve overspent, the total amount of money in each of your accounts, and your debt load.

Setting goals within the dashboard is another fantastic feature of Mint. Depending on how much money you invest, you can keep track of your goals and determine the precise month you’ll be expected to reach them. As a result, it serves as a reminder to keep saving money for it and hold you accountable.

After utilizing Mint for a month, I saved extra money to contribute to my new wedding fund goal. Mint encouraged me to generate more passive income to reach my financial milestones and helped me keep focused on my goal.

5. Pay Yourself First:

Pay yourself first is a saying you’ve probably heard before. But in case you haven’t heard, “paying yourself first” refers to saving a certain amount of money before paying any other obligations, like bills. And paying yourself first has made it possible for countless people to get closer to financial freedom.

Why?

Because any money left over must be used to pay bills after you pay yourself $1,000 each pay period. And if you don’t have enough money to pay those payments, you’re compelled to work a second job to cover the expenses.

Paying yourself first ensures that you consistently set aside funds to invest in yourself. By doing the opposite, you only receive what is left over, frequently insufficient to grant you financial freedom.

There are other ways you can pay yourself first as well. If your employer offers a retirement savings plan, you might request to have money withheld for your retirement. By doing this, you put your future and self-investment first. Everything left over after the deductions from your income might be used to pay your bills and other costs.

6. Spend Less:

Warren Buffett paid $31,500 for a five-bedroom house in 1958, and he hasn’t left it since. Is he wealthy? Incredible $90.3 billion. He can purchase a larger, more expensive home. But it’s possible that his thriftiness is what makes him one of the wealthiest individuals in the world. On the other hand, Kanye West isn’t ashamed to show off his wealth. He has a $20 million mansion as his home. And at one point, when he owed $53 million, he made the decision to tweet Mark Zuckerberg a $1 billion request.

What separates the two incredibly successful men? West spends money he doesn’t have, while Buffet didn’t spend more than was necessary.

The truth is that a lot of wealthy people don’t appear rich. Every day, Zuckerberg essentially sports the same uninspired t-shirt and pants.

Less consumption can increase your wealth.

Spending fewer benefits you in two ways. One is that you’ll have more money to save for financial independence.

7. Buy Experiences, Not Things:

Life is brief. It is unnecessary to save up all your money until you are 65. You should make use of your life while you have it.

The experiences you have, not the stuff you own, are what will ultimately help you lead a more contented life.

And do the things you purchase ultimately make you happier? Does having debt from buying a lot of things make your life easier?

Let’s now turn the switch.

What is your most joyful memory? Who or what were you? To whom were you?

Let’s make more memories in the same way. Perhaps you have a pal with whom you adore working out. Invite her over so she may exercise for free at your house to a YouTube playlist.

On a date tonight. You want to leave a lasting impression. On Groupon, you can find a fun activity you’ve never done before at a significant discount.

You’ve wanted to see Rome your entire life. You’ve been spending a year taking the vacation of your dreams. Feel free to take that trip without feeling guilty. You earned it; you didn’t incur debt to obtain it. Alternately, you may work remotely while traveling the world as a digital nomad.

Moments are what make up a life. The best ones come from spending time with loved ones. While some goods, like weekly family video game nights, can help you become closer to your family, most of them don’t add that much.

Spend no money. You are not required to act as though you are wealthy.

8. Pay Off Debt:

Some experts advise that investing money in equities is better than clearing your debt. Maybe that’s true if you’re an exceptional stock picker. However, if you have never made an investment in stocks, you risk accruing extra debt.

After making their final debt payment, many people experience the same feeling of relief.

Even if you have $30,000 in cash on hand in the bank, you can’t consider yourself financially free if you owe $50,000 in debt. You’re still down by $20,000 right now.

Paying someone else moves you closer to financial freedom, even though it’s not as glamorous as having money in the bank. The two major approaches to debt repayment are avalanche and snowball. Paying off the smallest debt first is known as snowballing. When you pay off the debt with the highest interest rate, it is an avalanche.

You must choose what suits you the best. But I used the snowball effect while trying to get out of debt. It made me more motivated to keep going. I was able to pay off my first debt, a $1,200 credit card balance, in only one month, and the sense of success encouraged me to take on a much larger, lingering school loan.

And since using credit cards was no longer an issue, I would typically pay three times as much as the paltry $300 minimum. Instead of the nine years, I was given, it ultimately took about three years to pay off the student loans.

An enormous burden is lifted when you pay off a large debt. You see an increase in your bank account balance after paying off your debt. Even if you knew the number declined initially, it’s still a fantastic sensation to see it rise, inspiring you to keep increasing it.

9. Create Additional Sources of Income:

OK, so as of now, you’re likely reasoning, “My obligation is significantly beyond my compensation. How might I take care of it on the off chance that I don’t make enough?”

If you’re significant about independence from the rat race, you must forfeit some hard work.

Your all day probably won’t cut it. Assuming that is the situation, you want to step it up and search for cash outside your present place of employment.

A few specialists suggest having seven floods of pay. On the off chance that you have regular work, congrats, you have one. Simply six more to go!

Presently, you can check out your types of revenue in two ways: dynamic pay (exchanging time for cash) or recurring, automated income (money that can continue to come in, even while you rest).

Assuming you exchange your time for cash, you’re restricted continuously throughout the day. The following are a couple of side positions you can do to procure a functioning pay:

Become a freelance writer finding jobs on ProBlogger
Help a business owner as a virtual assistant with jobs on Upwork
Acquire new skills via online courses for entrepreneurs and monetize
Become an Uber driver
Help with household tasks on Task Rabbit
Pick up the odd, occasional job on Craigslist
And more!

If you don’t have a lot of time to devote to earning income, you can focus on increasing your income streams with passive income like:

Starting a dropshipping online store with Shopify
Start your own custom clothing business on Shopify
Sell profitable content (blog, ebooks, courses, webinars, audiobooks, podcasts, apps)
Become an affiliate marketer
Buy properties and rent them out
Invest in stocks
Luckily, your seven pay surges can come from a similar source. For instance, assuming you’re an online business master, your pay surges can emerge from making seven unique stores. What’s more, recall: you don’t have to begin with seven streams. You can move toward it over the long haul.

10. Invest in Your Future:

The last independence from the rat race tip is a significant one. Let’s assume you heed the guidance and suggestions in this article, escape obligation, and develop your reserve funds. That may be sufficient to help you out at this moment. Be that as it may, imagine a scenario in which the startling occurs. Will you be ready for it?

It’s critical to saving cash for blustery days, retirement, and (sorry to be bleak here) if you kick the bucket to assist with guaranteeing your family doesn’t suffocate paying for your memorial service obligations and assessments. Alright, presently, we should return to that bright spot.

Assuming you have that everyday work, converse with your organization about adding a retirement plan or verify whether you’re now having derivations made towards it. The derivation gets removed before it hits your record, so you never feel like losing cash. What’s more, it’s cool to look at it occasionally and see your investment funds develop.

Then, you likewise need to set aside sufficient cash for a backup stash. A few specialists say $10,000 is acceptable, while others say a half year of your compensation. Furthermore, to be straightforward, those numbers can appear high if you don’t rake in boatloads of cash. So all things being equal, begin with an objective you can bear — like $100 for your most memorable month. Furthermore, as you procure more dynamic or recurring, automated revenue, expand your goal to $500 per month to $500 fortnightly, etc. If you’ve overspent on layaway and a high Mastercard bill comes up, don’t utilize your secret stash — center around taking up more dynamic pay open doors so you can pay it down quicker.

The secret stash is just for impromptu crises like a tree crashing onto your home, an auto collision you want to pay for from cash on hand, or a visit to the emergency clinic.

By saving cash for blustery days and retirement, you’ll be less inclined to wind up back to where you are present: wanting independence from the rat race.

Conclusion

To achieve financial freedom, you must adopt a new way of thinking. Financial independence isn’t something that happens overnight. It takes time, effort, and planning. The strategies listed above are just a few ways you can achieve your goal of financial independence. Once you have achieved financial independence, you can truly call yourself financially free.

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