What Does Financial Liberty Mean To You?
By Finance Desk
Tuesday, August 18, 2020.
Are you worried about how debts tie you to your creditors, or your need to pay bills ties you to a working situation that doesn’t work in your favor? These ties may not be as binding as you think they are. It is possible to become self-sustained, reliant on no-one’s money but your own, and to avoid getting caught in the debt or low-wage employment trap that so many people stay in for the majority of their lives. Here, we’re going to look at how you can achieve financial liberty, not only for yourself, but for everyone in your family as well.
Financial literacy is a must
Simply put, without some knowledge of how your finances are currently working, you cannot enjoy financial liberty. There are lessons on financial literacy like practicalmoneyskills.com/teach/lesson_plans.html that can teach you how to keep track of your money, your spending, and your savings in a more effective way. This can be made even easier with the help of things like budgeting and expense tracking apps, as well as those that track your progress towards certain savings goals. When you stop being mindful of your finances, that’s when you tend to slip into bad habits like relying on creditors and others. You have to take responsibility for how you handle your own money.
Keep looking for ways to grow your income
The unfortunate reality is that financial liberty isn’t something most can afford. You have to start earning enough money to be able to take care of your own problems instead of having to rely on debt or government institutions. Look at the ways you can earn more money, whether it’s by taking on a side hustle, monetizing a blog, or making a career change into a more lucrative sector. Of course, the smart way to make more money is to start investing what you can, as well. As soon as you’re able to put money into any kinds of investments, you should. You can benefit from exponential growth further down the line, but you have to start putting into it as soon as you can.
Invest in some safety nets
There are widely available social safety nets that can catch you some of the time. However, if these fail you, it can end in truly abject poverty. Rather than relying on the inconsistency of state aid, or the help of others, you should aim to restore your financial confidence by having your own protections available. This can include using tools like goodfinancialcents.com/betterment-investing-review to put together an emergency fund that can help you in the direst of situations. As well as emergency funds that can cover you against moments of income loss or major expenses, you can also invest in insuring the most valuable assets that you need in daily life.
Keep financial obligations to a minimum
While it’s important to earn a lot more money in order to be able to afford the safeguards that you need, this doesn’t mean that you need all the unnecessary trappings that tend to come with wealth, either. Owning a bigger house can offer some practical advantages, but you need to make sure you’re not opening the door to long-standing financial obligations that will keep you paying them for years. If you are looking to buy new assets, then it may offer more security to see if you pay for them with cash outright. For instance, if you want a new home, then you might want to look at some of the more affordable building options instead of having to borrow from the bank.
Divorce yourself from debt
Obligations such as debt are the single biggest barrier between the average individual and financial liberty. Simply put, you can’t say that you’re free if you’re tied down by debt that you’re racing to pay off. There are a variety of ways to deal with this, however. Debt discharge options from services like www.dtss.us/complete-freedom.html may be able to help some people. More people are able to gain access to debt consolidation that allows them to pay their loans off in a more structured and managed way, as well.
Invest in your future
We have already looked at how investing can help you build the safety nets that allow you to become less reliant on the social institutions that are ostensibly there to support you (but often end up letting you down.) It’s important to have more tangible goals for investing towards your future, as well. Figure out how much money you might need to support your lifestyle when you’re going into retirement, for instance, and make that your new financial goal to ensure you’re always moving in the right direction. Retirement calculators engaging-data.com/fire-calculator.html like can help you get a good idea where you should be setting the bar for yourself.
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Watch how much others rely on you
Just as you should be careful as to how much you rely on employers, on banks, and other financial institutions, you should be careful as to who you let rely on you, as well. Financial obligations go both ways. If you're tied up in too many investments you have no control over, it can be difficult to free up capital while you need it. Similarly, if you have too many people who owe you money, you’re relying on some risky ways of managing your wealth. Be sure to try and keep a sizable portion of your cash liquid at all times. This way, you’re able to use the money you have and nothing else to react to things like financial emergencies, instead of having to slip back into dependence.
Financial liberty is all about becoming self-sustainable. You can live without the fear of losing your income due to losing your job, as well as the fear of debts swallowing up all of your finances. This path isn’t easy, but that doesn’t mean that you can’t achieve it if you work hard enough, either.