Financial freedom is the most important issue of human life. Most people realize that none of the human beings can work forever. They must calculate their income and outcome to depict basic needs that must be fulfilled so they can feel peaceful about living continuously. To gain financial freedom is one of the goals in real life so they can retire peacefully. Because of that, most people try harder to make money in various ways, such as having a side job, becoming a freelancer, trading, investing, etc. Therefore, most people who have exhausted working harder to achieve financial freedom are not successful in gaining financial freedom before their retirement.
One research on financial freedom entitled Financial Aspirations, Financial Success, and Overall Life Satisfaction: Who? and How? elaborated clearly about the indications of strong financial aspirations are socially inclined, confident, ambitious, politically conservative, traditional, conventional, and relatively less able academically, but not psychologically. Whereas financial success depends on having the personal resources to do so. Admittedly, financial freedom is regarding the behavior of spending money. Therefore, here are the five steps of achieving financial freedom before your retirement.
The Planning to Achieve Financial Freedom
Financial freedom is neither about how much money is in your pocket nor how much money you can make. It is more about the financial planning of your economic issues, either it is about how do you spend money or how do you earn money more. Many financial advisors suggest that clients must be aware of the economic issue of their life both income and outcome. Instead of calculating the number of your saving, financial freedom is concerned about the cash flow.
The cash flow is the important thing that must be analyzed because it is the main source of financial planning. People must consider their cash flow to depict their needs and ambitions to draw financial planning in front. Due to cash flow analysis, we can allocate money considerably so it can reduce spending money on worthless things.
Build Your Income
Financial planning is the most important thing that must be done before you earn more money. You will never succeed if you do not have a plan to allocate your cash flow. But, if you already plan your daily or monthly budget, it is time for you to build your income greater. Like all people experiencing the first years of financial freedom, you need to trade time for money. You can find another job to earn more money besides your current job.
Many companies offer people to be their freelancers, and it can be a good solution to make more money besides your job. You can spare time a while to take a side job even though you must trade time for money. It is exhausting the first time, but this option can be a good opportunity to gain more income. Indeed, you can take more than two side jobs at the same time. Remember, this is exhausting because you must trade time for money.
Get Out of Debt
It is better if you do not have any debts, and you must try to keep it that way. Sometimes, people get into debt because they need to purchase something important for themselves, such as buying a house to live in, a car to mobile, a laptop to work, etc. As if you have debt you have to pay it off. Living with debt any longer is not good psychologically to achieve financial freedom.
Living within your means is the priority, as the explanation above, you must allocate money wisely. Moreover, you get a pay raise at work, it is not an excuse to increase your discretionary spending. Planning is a matter of financial freedom steps, so you must strengthen yourself to avoid spending money inconsiderably. At the first time, it may be hard to do, but strengthening yourself to achieve financial freedom will help you to be a considerate person in spending money.
Save Money for Emergency Fund
This is the important thing because most people inconsiderably spend money for their real budget allocations. Sometimes, people do not consider that bad luck happens out of nowhere. For instance, your company collapses, and it must fire the employers which are you are one of the employers that have been fired. You cannot avoid the situation also you must continue your living. An emergency fund will help you to fulfill your daily needs until you get a new job.
In another case, you feel that the company you work for does not help your career, so you decided to resign makes you jobless while you are searching for a new job. An emergency fund bears your daily needs while you are looking for a new job. Shortly, saving money for an emergency fund is a crucial financial aspect that must be aware of people.
Investing and Growing Passive Income
The last part of achieving financial freedom is doing invest and strengthening passive income. Firstly, you have a plan to allocate your budget considerably. Secondly, you make more money to increase your income by looking for a side job. Thirdly, you must get pay off all your debt and keep it on track to avoid the debt in front. After that, saving money for an emergency fund is a crucial financial aspect to prepare worst thing to happen. Finally, investing and growing passive income are the last step of achieving your financial freedom.
You can invest spare money into stocks or gold for a good reason in the future. Also, you need to discover establishing passive income methods, such as renting apartments, houses, or other valuable things. You will need to visit investing manager to teach you how to do invest in good ways. As if you have an apartment or a house that you are not living there, you can rent it to another, and the payment is able to use for another building that is obviously to be rented.
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