How to be financially free? Let me find the ways.
There are tons of definitions when it comes to financial freedom. It will give you a different perspective and several suggestions on how to start them. Most of them will give you benefits but some may not be applicable just yet.
Here are the ways I did when I started my financial freedom journey.
Disclaimer: I am not a financial adviser. I am also learning the same as you. Everything I know is purely based on my research and is working for me. I am hoping that by sharing this would jump-start your goal to be financially free.
1. Know where you’re at
What do I mean by this? Simple, define what is financial freedom to you. This is not from any financial adviser that you read. It should be your own words in a way that you will understand it.
Financial literacy will be very daunting to start with. This will be another world to venture on. So what I did is I started knowing where I stand. This serves as my vision to attain the freedom I am longing for.
For me, financial freedom is a state of life where you are earning without depending on paycheck to paycheck. It also means working just because you want to, rather than you need to. This is also making money while you sleep and the most important definition is debt-free, boss free and have free time. Once you have your vision, you can go to the next step.
2. Acquire Knowledge
To be honest, I got overwhelmed when on different ideas I gathered. But focusing on my goal has been my reason to push through. So I read articles one day at a time. I have taken down notes on things that would apply to me.
Yes, I like to read. I used to love reading fictional novels, romantic ones, suspense thriller books, and even magical stories. But when I started this venture, I find myself browsing Financial Books and order them online (yes, I still want hard copy books. I like the smell of them)
Acquiring knowledge has never been cheap for me. I bought some books, I have a subscription on how to retire a millionaire and I enrolled to different kinds of online training. In short, I invest in myself.
But there are a lot of financial articles online. YouTube is also a good way to start. There will be a lot of channels that will talk about money, financial literacy, and financial freedom. The best thing is that they are free.
3. Have a Core Knowledge
Since you already have the notes from #2, it is time to narrow it down and have core knowledge. What is this? These are data that you hold in preparation for your path to financial freedom. I treat this as the heart of my journey. This is my mission to achieve my goal. In this step, I start asking myself, how I spend my money.
Because of that, I have come up with two core knowledge –Wants vs. Needs and Assets vs. Liabilities.
Let’s check my definition, shall we?
Wants vs. Needs
Wants are your desire. This may be anything that could satisfy you and what you think you need. On the other hand, Need is for survival. One of the best examples is the three basic necessities. – food, shelter, and clothing. Anything in excess to that is Wants.
For example on clothing, this is what I need. But, do I need a lot of them or I want to have a lot of them?
Another would be on mobile phones; do I need the expensive one or the affordable one? Both could give connection anyway but the only difference is the price.
Basically on this step, I think before I buy. If you are going to ask me 10 years ago, it is the other way around especially I had credit cards. I buy first then think later or should I say, suffer later.
Assets vs. Liabilities
According to Robert T. Kiyosaki, an asset puts money in your pocket while liability takes money from your pocket. It is simple yet alarming. Why? I only have liabilities today. Anything I own right now is taking away money from me. I only have one source of income which is my salary. But what if this is taken away from me? Where will I go?
This has been an eye-opener on this path to freedom. I have savings but I know it will not be enough. I have to look for other income streams that I could discuss in my other blogs, so watch out for it.
4. Have a Buddy
Like any other journey, you want someone to be there to support you along the way. It is also the person who will remind you of your vision and mission if you ever stumble. It could be a person who will have the same passion as you. Luckily for me, I have my own buddy, my husband.
We are in sync when it comes to money matters. We both love the idea of financial independence and to be our own boss in the future. He’s the one who introduced me to the wants and needs concept which we apply in every purchase that we do.
5. Join a community
Aside from having a buddy, joining a community is a great decision as well. Having a buddy is more personal than having a community. However, you will find more experienced people if you are in a group. You will learn from their success and even mistakes. There are a lot of communities or groups online, especially on Facebook. But be cautious. If you think they are all scammers, let go my friend and look for something new.
Recently, I have joined the Wealthy Affiliate program and I find myself surrounded by people who have the same passion as me. They will push you to achieve your goal. They will give you support on different topics and there are training you enjoy too.
Awareness is always the main key
Being aware of my financial status has been my foundation in reaching my vision. How I spend now is different from how I did 10 years ago. I am now more vigilant. I am more responsible about money and how I spend them
Financial freedom is a marathon. It is a process with different trials and errors. But one is definite, there will be no shortcuts.
Do you want to be financially free as well? Know your financial status and start from there.