Being financially free is amazing because it makes you stop worrying to make ends meet. Financial freedom allows us to focus on shaping our own destiny in the way which we have always wanted our lives to. Instead of making our lives being too dependent on other people, for example financial institutions likes banks that lend high-interest money, or even worse, loan sharks.
When you decide to start saving money, you want to see your saving bank accounts skyrocketing. But that is not going to happen anytime soon.
To properly feed your piggy bank, you need to learn the basics how to save money effectively, and get to know a few tricks how put aside a dollar here and there.
When I opened my first bank account, the balance was a big round USD$0. But it does not matter at the beginning. What matters is that after some time, your bank accounts will grow to USD$1,000, USD$10,000, USD$100,000 or even USD$1,000,000 depending on what your saving goals are.
It is ‘OK!’ to start saving money from scratches.
Personal finance for dummies
Everything you need to know about personal finance can be written on only one page. One single page will suffice to take control over your own future.
You do not need complicated financial algorithms to manage your finances. You do not need expensive money-management software. And you definitely do not need to spend hundreds of dollars on financial advisors.
The only thing you need to do to achieve financial freedom, is to spend less money than you earn. Period.
At the same time, you must widen the gap between how much you make every month and how much you spend. The bigger the gap between income and spending is, the faster you will become financially free.
How to become financially free?
Earn more money. First, you can sell your time in exchange for wages (part-time work) or salary (full-time work) working for someone else’s company. You will first need to gain knowledge and skills that you can later monetize on the job market. Second, you can start a side business to gain income streams in addition to your full-time job. Third, you can start your own business, and either provide services using the skills you already possess, or you can sell your own product(s). The perfect combination is to start up your own business out of passion.
If you like fishing, either opening a fishing shop or working as a fishing coach would be a great way to earn money. No matter what you do, make friends wherever you go. People like doing business with people they know and trust. So, the more friends you have, the bigger chance of finding new clients or partners.
Maximize savings. The only way to maximize savings is to reduce spending on things you buy, or to stop buying certain products completely. The best scenario is cutting costs without lowering the quality of life. But start doing it slowly.
Maximize every single dollar here and there. Money will add up to pile up nicely at the end of the month. Remember that habits are dangerous for financial freedom. So, if you are a chain smoker or like drinking, it is time for you to quit smoking. Do not buy things in the hurry! Wait a day or two to see, if you really need that thing you wanted to buy. Do not let purchase desires control your mindful brain.
And always remember the big picture: you have a financial goal that you want to achieve after a certain period of time.
Implement money-saving techniques. To make sure that your earnings are going up while spending plummeting (causing the size of your gap (savings) skyrocket), you cannot have any high-interest debt.
Pay off all debt and credit cards as quickly as possible. Then, you can even throw away (I mean cancel at the bank) all of your credit cards, or just keep them as a backup. Then, search for bank accounts which pay the highest interest rates on your savings. Think about long-term goals like retirement or emergency funds to secure your future.
After all, achieving financial freedom seems to be quite simple. All you need to do is to earn more than you spend. And then, save a big portion of your income. You will maximize the gap between how much you make from various income streams and how much you have to spend to keep you going every day.
And remember, do not buy unnecessary stuff not to waste such a huge opportunity to achieve your own financial freedom, so you can have total control over your life, be in charge of your destiny and be free to chase your dreams.
