Financial Freedom- Yes it is possible!!!

Lets take a quick poll. How many of you have any sort of financial debt at your liability? House on mortgage? Tuition or personal loan from bank? Credit card debt? I can say with utmost confidence that all of you must be involved in some type of debt, either a few bucks to millions of dollars…

Then comes along the dream phrase for you, “Financial freedom”!!! Wow, financial freedom, it is achievable in this lifetime?

Yes it is. Let me explain more…

In the world of electronic banking, credit cards and quick loan facilities,. it seems virtually impossible to have any financial freedom. But leaving a life free of all financial constraints is possible. It just requires a bit more focus and personal discipline in order to live a life of comfort with financial freedom. Some realistic approaches is indeed needed to achieve this goal.

First things first!!!

You would go nowhere if you are not aware of all your debt sources. Not keeping a list of all your sources of debt is the first mistake many people make in their quest to achieve financial freedom. Get down making a list of all your debts…it would be better if you categorize your sources, such as; mortgage, credit card debt, and even money owed to friends!!! The latter may not seem as important but this is the most important item on the list, trust me!!!

Why?

Money owed to friends, relatives and workmates usually makes a small percentage of all our debt….at least in most cases. it may range from a few dollars borrowed that day to buy soda….to a few hundred dollars to repair that burst tire. This is usually the easiest category of debt to pay off, and settling this may give you self confidence in renewed vigor in order to reach that your ultimate goal….financial freedom. In order words, you achieve a sense of accomplishment, which motivates you in the long run.

While some financial advisers recommend you to first pay off the debts which accumulate high rates of interest, this is usually not a good approach. Yes, you may save money if you manage to settle your account before it accumulates more and more interest, but what if you loose hope in achieving financial freedom in the process. You will loose more than you will save as all your other debts accumulate. Rule of the thumb, settle debts which a realistically possible, and you have a feeling that you have accomplished something! It tends to be a small but significant factor in achieving total financial freedom.

What you have just dome above is prioritized your debt. You have made up your mind on which sources to pay off first.

Then comes paying off your essential debts, or I would say, bills and everyday expenses. These can be categorized as priority expenses, such as telephone bills, electricity bills, water and sewage rates, goods, travel, service expense, etc. You may also organize a sub category here to include entertainment, luxury and outdoor expenses.

Budget for the above items and calculate the remaining amount, called the net income at your disposal. Of course, you need to save a bit from your net leftover, so subtract this amount too.

Now sit down for a moment and think of these scenarios.

*Is it possible to pay in cash for your purchases from the local grocery store. If possible, take every opportunity to pay cash rather then presenting your credit card.

*Impulse buying…Always carry some cash around, so whenever you come across a item you “think” you need, fork out the cash instead of the credit card.

Memorize this witty phrase which will help you in your goal of achieving financial freedom.

“Make room in your wallet for cash rather than card”

Budget…who needs that crap anyway!!!

The fact is, everyone needs it, from a teenager who earns a few buck per week mowing lawns; to the owner of a multinational company, who handles millions of dollars every minute of the day. Budgeting becomes more important for those who are in the quest to achieve financial freedom. Budgeting is like a birds eye view of your money’s journey. It gives you a picture of how exactly money comes comes to you and through which channels it leaves you. At the end of the day, you will be surprised on how you manage to handle your money in the right way using this simple tool…budget.

Let me reitiarate now...Financial freedom is possible. You just need to put a bit more effort into implementing the above ideas in your life, the rest will just fill in…