We all wish for financial freedom, but many of us are unsure of what this means. Does it mean earning more money? We all want to earn more money, but if you are a salary earner this can be very difficult without taking on another job.
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We can all attain financial freedom through proper financial planning and making it our goal to improve our financial position as opposed to earning more. This can be encompassed in a comprehensive financial plan.
Firstly, think positively about your money. If you think negatively about your money, this will become a major obstacle in achieving financial freedom.
The money you are earning now is the means to your end, without it you won’t achieve financial freedom. First up, learn to spend less than what you earn and save the surplus. Saving is an investment in your future.
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3 Tips to get you closer to achieving financial freedom
1. Identify your financial goals
Financial freedom is being able to do the things you want to do, whether it is to purchase a new home, travel, or maintain your current lifestyle well you’re your retirement years.
2. Set time periods for achieving these goals
These can be short-term goals of up to two years (travel), medium-term goals of three to five years (putting down a deposit for a new home) or long-term goals (retirement). If you find it tough managing your money on your own, a personal finance professional will then be able to capitalise your goals and provide you with an end goal to aim for from this year.
In other words, what is the magic capital number you will need in retirement to achieve financial freedom? A finance professional will be able to formulate the amount you will need to save monthly/yearly in order to achieve that end goal.
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3. Audit your achievements
For short-term goals, review them monthly, for medium-term goals review them every three to six months and for long-term goals you need to review them annually. By reviewing them continuously, you are able to track your progress. If and when your financial goals change, ensure that these changes are reflected in your financial plan.
If you stick to your financial plan and you continually audit it, before you know it you will be on the right track to achieving financial freedom.