Motivate Yourself: Kickstart Your Financial Freedom


By John Loff / Posted: May 21, 2019 / 0 Comments / Posted in Personal Finance

How to Kickstart Your Financial Freedom
Plenty of self-help books and finance gurus talk about the importance of “financial freedom.” The phrase has a nice ring to it, but what exactly does it mean? And how do you achieve it?

Defining Financial Freedom

Financial freedom doesn’t necessarily mean that you’re free of all your financial obligations. But it means you feel a sense of ease in situations that might otherwise be stressful in terms of money. For example, financial freedom can manifest as an ability to switch career paths, vacation, or retire without fear of monetary hardship.

Chris Hogan (@ChrisHogan360), a financial expert and the best-selling author of “Everyday Millionaires,” explains, “Financial freedom means that you get to make life decisions without being overly stressed about the financial impact. You control your finances instead of being controlled by them.”

Financial Freedom is an Attainable Goal

For many people – especially the 78 percent of Americans who are living paycheck-to-paycheck – financial freedom might seem out of reach. It’s true that not everyone will become a millionaire. But being a millionaire isn’t necessarily an indicator of freedom. After all, even high-earning individuals find themselves in precarious financial situations.

It’s vital to set your personal goals though. How much would you like to have saved up and by what age? Be realistic, and consider what kinds of things in life would really make you happy.

Achieving Financial Freedom

Once you have a goal in mind, a number of strategies can help bring you closer to that sense of financial ease. Just start to achieve your goals little by little.

Organizing Your Finances is the First Step

Creating and following a monthly budget is one of the most important ways to begin your journey to financial freedom. It offers an organized approach to handling bills, groceries, and savings. “It is also a monthly routine that reinforces your goals and bolsters resolve against the temptation to splurge,” adds the financial advisor Matt Danielsson (find him on LinkedIn).

Tackle Your Debt the Right Way

In the same order of ideas, Danielsson recommends that you prioritize paying off high-interest loans, including credit credits, rather than student loans and mortgages. The latter loans tend to have lower interest rates, making them less urgent to your financial well-being.

Never Let Your Debt Get Out of Control Again

Once you have your outstanding debt under control, you’ll want to avoid taking on more debt whenever possible. Here’s how:

  • Pay with cash, instead of using your credit card. When consumers use a credit card, they tend to fall into the illusion that they can spend more than they should. Using physical cash makes you more aware of your financial loss.
  • When you’re tempted to make a big purchase, slow down and reconsider. Do you really need the product or service at this moment? Or can it wait until you’ve achieved financial freedom? If you need the item immediately (for example, a new computer to work on), ask yourself if cheaper options are available.
  • When you absolutely have to take out a loan for a necessary item, look for the lowest interest rates possible. Consider building up your credit score beforehand, as a better score can attract lenders who offer fairer interest rates.

Emergency Funds for Peace of Mind

Let’s say that the end of the month rolls around. You’ve already managed to pay on your essentials and your debt obligations. Now’s the time to go on a spending spree, right? A wiser route is to take your extra income and start to build an emergency fund.

This fund will serve as a cushion when life throws you a financial curve ball. You can use this money to take care of emergency vehicle repairs or medical expenses, but never use it for non-emergencies.

Make Some Investments

Begin investing to reap the benefits of compound interest. Danielsson’s recommendation, which is, “Open an online brokerage account that makes it easy for you to learn how to invest, create a manageable portfolio, and make weekly or monthly contributions to it automatically.” should help you the right way to handle it.

Case of Study: How Minimalism Can Help You Achieve Financial Freedom

A complete change in your lifestyle and the way you think about money is another way to achieve financial freedom.

Joshua Becker, best-selling author of “The More or Less,” has a perspective that could change your life: “Unfortunately, most people think more money is the answer. And while there may be some truth to this solution, most of us would readily admit that our most basic needs (food, shelter, and clothing) are financially covered.”

Take a Lesson From a Minimalist

Becker is a minimalist, a person who aims to escape the cycle of excessive consumerism. A minimalist takes a path to happiness that involves acquiring fewer possessions. It’s a lifestyle that involves letting go of certain cultural expectations. For example, a minimalist will make purchases based on needs, rather than wants.

You don’t have to sell all of your personal possessions to benefit from a minimalist philosophy though. Simply being able to better distinguish between needs and wants can have life-changing benefits and help you reach financial freedom.

Experts Cited

Matt Danielsson Photo
Matt Danielsson has worked as a financial advisor for over seven years. He often writes on topics concerning stock picking, mutual funds, and personal finance in general. His writings can be found on Investopedia and FinancialPlanning.Com.
Chris Hogan Photo
Chris Hogan is a millionaire who has spent time surveying other millionaires. His best-selling book “Everyday Millionaires”, and the information published on his website shatters myths surrounding wealth while offering readers useful financial advice.
Joshua Becker Photo
Joshua Becker is a best-selling author and the founder of Becoming Minimalist, a website that encourages users to simplify their lives. He offers tips on reducing clutter and spending less.

Works Cited

1 Dave Ramsey “How Do I Achieve Financial Freedom?” https://www.daveramsey.com/blog/what-is-financial-freedom

2 CNBC “The government shutdown spotlights a bigger issue: 78% of US workers live paycheck to paycheck” https://www.cnbc.com/2019/01/09/shutdown-highlights-that-4-in-5-us-workers-live-paycheck-to-paycheck.html

3 Investopedia “These 12 Habits Will Help You Reach Financial Freedom” https://www.investopedia.com/articles/personal-finance/112015/these-10-habits-will-help-you-reach-financial-freedom.asp

4 Becmongminimalist.com “8 Countercultural Decisions to Find Financial Freedom” https://www.becomingminimalist.com/financial-freedom/

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