Everyone wants to be free. From freedom of choice to freedom of expression, a life where you call the shots and nothing is holding you back. But for many, this sense of freedom is smothered by a blanket of debt or simply a life of living paycheck to paycheck with not enough money to stash away for a relaxing holiday or reliable transportation.
While money shouldn't be the determining factor for living a life of your choosing; the reality of achieving financial freedom simply means getting out of debt and having enough in your savings account to afford the things that make you happy in life.
No, money surely isn't the key to happiness but simply a means to allow for the things in life that can and will give you the freedom you seek.
From a young age, people have been taught the basics. You receive schooling and then off to work you go. Once you land an "acceptable job", you are simply advised to save a small portion of each paycheck to save for retirement; which by the way is at an average age of 65 in the UK.
The fundamental idea is that we should all follow the same sequential route from childhood to death, spend much of our day at work, strive to scale the ladder, purchase a larger home, fill it with an array of needless belongings that offer very little pleasure. It is only after retirement that there is an opportunity to travel, rest, or spend time with those we love and cherish.
Unfortunately, you are never taught that there is another way out. But there is! Financial freedom is achievable without having to handcuff yourself to a mind-numbing day job. Financial independence is all about taking control and ownership of your life. You have a stable cash flow that allows you to enjoy the life you want, the life you have envisioned for yourself, and not somebody else. You're not concerned about how you're going to cover your debts or unexpected expenditures, and you're not drowning in a pool of debt.
The first step in securing your freedom is to get real with yourself about your current financial situation. Denial and credit cards are a recipe for disaster. Money can often be a taboo subject to discuss; especially if you're sharing finances with your partner, but it's time to get over it and talk about the elephant in the room.
You will never gain financial independence without first understanding how much money you actually have compared to how much debt you are in. Gaining a clear perspective of your current financial situation may feel overwhelming at first but it is indeed the first step towards freedom.
Start by compiling a list of all your current debts including your rent or mortgage, any student loans, car loans, and credit cards.
Now add all these numbers up. Don't forget to breathe. If it's a larger number than you expected, don't panic!
Now it's time to compile a list of all your savings, including all the money in your bank account and any recurring revenue from investments. If you don't like the results of either of these totals, it's ok, we all have to start somewhere.
Now that you have a better picture of where you stand financially, it's time to write down a solid plan and consider your financial goals. What does financial freedom mean to you? Get specific because just wanting something is not enough.
How much do you want to have in savings? Do you plan on retiring at a certain age? What type of lifestyle do you want to live? How will you tackle getting out of debt?
This goes for time and money. No one likes to cut back on their living expenses, but you don't need to commit to a life of eating toast and ramen just to save a few quid. Instead of depriving yourself, make a few small compromises. Maybe consider hosting a game night with friends instead of meeting up at the pub, treat yourself to latte just once a week instead of every day and give yourself 24 hours before purchasing any larger ticket items to make sure you're not giving in to an impulse buy.
Not only will you see the savings start to add up, but you'll enjoy that latte even more.
Don't let those Instagram photos fool you. While it may be tempting to quit your job, become a digital nomad and start traveling to exotic locations while hashtaging #wanderlust. If you don't have a solid financial plan, an emergency fund, or any savings, you'll find yourself moping the bathrooms of a cheap motel in Thailand just to get by instead of sunning yourself on the beach.
Have a solid plan laid out detailing how you will pay down your debts and how you will transition from your current job and start monetizing your passions. Create a timeline including where you want to be six months from now all the to five years from now and map out the process of how you'll get from point A to point B.
Keep track of your progress in a personal finance journal and be diligent about sticking to your budget. This could mean for the first few months you dedicate all your free time to building up a side hustle that you're passionate about, then once you get enough income from your side hustle(s) you cut back to a part-time job which allows you to dedicate even more time to your dream job and will eventually allow you to grow your side hustle into a full-time business.
Living in a world where you can be famous just for being wealthy while others are struggling just to put dinner on the table can make any empathetic person turn sour at the thought of desiring wealth. But in all reality, the more you have, the more you can give. If you have enough to take care of yourself and still have money left over, then just imagine the world of good you can do with all your savings!
If you view money as bad or associate guilt with a high salary, then you’ll create a negative energy surrounding you that does nothing but repel you away from your financial goals.
It is important to keep in mind that you can not give from an empty cup and achieving financial freedom will allow you to help those in need instead of feeling overwhelmed by your own money problems.
In conclusion, the road to financial freedom isn't all unicorns and rainbows but it is well worth the journey. You will finally be able to gain control of your wealth and, most importantly, your life. It's all about setting clear goals, being a little frugal, and investing in yourself instead of mindless purchases.