The Path to Financial Freedom
Financial freedom means slightly different things to different people, but one thing most of us agree on is that financial freedom means having enough. Enough money to pay the bills, enough money to be free from worry about how you’re going to make ends meet, and enough money to do some fun things with your life.
Basically, financial freedom means knowing that you can do the things you want to do with your money without stress and struggle.
Sure, you’ll probably want to work at a job you like, or maybe you’ll want to focus on passive income ideas. But no matter what you choose, you”ll know that the basic needs are taken care of for yourself and your family.
What you need to reach financial freedom
To reach financial freedom, you’ve got to have a target. Start by deciding exactly what financial freedom means to you, in detail. Imagine what it will look like. What will be different? How will you have changed? What will be better?
Then sit down and make sure you’re doing everything you can to get there.
The 9 step financial integrity program (developed by Joe Dominguez of Your Money or Your Life) got me started with taking my own first steps toward financial freedom. I went from struggling with owing money to being debt-free but the house with a positive net worth by following those steps — most of which involve paying attention, and then acting on what you see.
Money management skills are key
And that means putting good money management skills into practice, or learning them if you don’t already have them.
Key things to put into practice include:
- Tracking your spending
- Building an emergency fund
- Creating and using a budget
- Managing your cash flow
- Paying down debt
- Preparing for retirement
- Obtaining enough insurance
- And taking care of the estate planning basics
Financial freedom is worth it
That list could seem overwhelming, but financial freedom is worth it! You’ve just got to get started on the list if you haven’t already, and work your way though it. Pick the thing that seems most important to you, or even easiest — it doesn’t really matter. Then get started.
As you begin to make changes, things will snowball. You’ll start to find yourself saying things that you never imagined you’d say. Things like “So, where do you want to go on vacation next?” — with everywhere in the the entire world as possible options. Or “Boy I really want to max out my 401k this year” when previously you weren’t even contributing. Or even “This job isn’t for me, I’m going to do something else instead” — without worrying about how you’ll support yourself and your family because you feel like you have to keep your job.
We don’t change overnight, but one step leads to another, and the path to financial freedom is an exciting one. And it’s absolutely doable.
Couldn’t agree with you more. That is why I love working at Adaptu and helping people achieve financial freedom!
Very nice :)
Honestly, I tell people to start with tracking their spending- its hard to create a budget, create an emergency fund, or pay down debt if you have no idea where your money is going to start with.
That’s an excellent point, and I should change this to say so. Tracking my spending did make all the difference for me.
Financial freedom, to me is a state where you dont have to work to meet your expenses, your money takes care of your expenditure. Another important criteria to achieve that state is to constantly increasing earning power.
Sounds like your definition is very similar to Your Money or Your Life‘s FI. (Living off passive income, in that case interest income.)
Financial freedom is wonderful, however just having control of your expenses is pretty nice too.
True, every thing that’s taken care of is a step in the right direction and nice.
I love that security blanket feeling of having an emergency fund. It’s so nice to know if work got really horrible someday I have the choice to walk away.
Choices = Freedom. You don’t have to be independently wealthy to feel a little more free. You just have to have an emergency fund to start and it builds from there.
Oh, that really is a great thing — knowing that you’re working out of choice, not obligation.
I think financial freedom is being able to do what you want and help others achieve what they want without ever having to worry about if you have enough money.
I do believe that small steps create a snowball effect. 1 small step a day is 365 steps a year and it builds on itself too.
I like that you included helping others achieve things in your definition :)
Another awesome post! Keep up the great content, Jackie! :)
Glad you liked the post. Thanks for reading!