How to Achieve Financial Freedom in Life?

How to achieve financial freedom is a question that would have come across your mind at some point of time.

In this short article, I will look at the 9 steps one needs to take to achieve financial freedom.

👉 What is Financial Freedom?

Financial freedom is not always about being rich and having tons of money but instead, it’s more about having control over your financial present and your financial future

Achieve Financial freedom in Life using these Nine Steps:

👉 1. Understand Where You Are Presently

Start off with a clear idea on — how much debt you have, your accumulated savings, your monthly expenses, money in your EPF and PPF accounts, your salary, your taxes, dividend income, ESOPs etc. In other words, you need to know your personal financial statement

👉 2. Pen Down Your Goals

Take a piece of paper and write down your top 5 goals using the SMART methodology that you would like to achieve over the next 1, 5, 10 and 20 years

👉 3. Track Your Spending

Use a notebook, excel spreadsheet or the ETMONEY app to track your expenses. This will make you more accountable and also reveals many needless expenditures

👉 4. Pay Yourself First

Paying yourself first means putting a specific amount of money in your savings or investment account before paying for anything else like bills, discretionary expenses, rent etc.

👉 5. Spend Less

Spending less does not mean compromising on your existing lifestyle or living a barebones life but more about smart spending.

For example –

  1. Learning to make delicious food at home thereby reducing your eating out expenses

👉 6. Pay Off Your Debt

Paying off a big debt supports financial freedom in more ways than one — you get more future cashflow to work with and your credit is strong. Use the snowball method or the avalanche approach to pay off your debt

👉 7. Always Keep Your Career or Business Moving Forward

Increasing one’s income — while keeping the spending levels constant or in check — is one of the fastest ways to reach financial freedom. This requires you to continuously work on advancing your career or your business

👉 8. Create Additional Sources of Income

For the majority of people who are serious about financial freedom, a 9 to 5 job may not be sufficient. In other words, one might need to look beyond a job for building income. Infact, some financial experts encourage people to discover as many as five streams of income.

👉 9. Invest

  1. Invest as much as you can and as early as possible, therefore allowing the power of compounding to assist you

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