Are you someone who thinks the term financial freedom is a pipe dream? If so that may be part of the problem. Financial freedom means having the money you need to live the life you imagine, comfortably. It doesn’t happen by gaining huge sums of money on a windfall, it happens through understanding your finances and making organised decisions in-line with your life goals.
Understand Your Position
The first step to achieving financial freedom this year is to understand your financial position. If you’re struggling you might be feeling somewhat overwhelmed by regular debt payments and rely on Payday loans every month. This seems to erode your income and leave you without enough money to maintain a comfortable living standard.
You need to take a step back and understand the details of your financial position. Segment your income, outgoing, spending, and debt repayments. It might not be a healthy position but it is a starting point, something you can work with and build upon.
Change Your View of Money
When you have a lot of heavy financial commitments it can be very easy to slip into a negative view of money. You start to think of money as a burden that only makes you feel stressed and unhappy. This is an indication that you need to take the right action to get back on track.
The first thing you need to do is detach yourself from the idea that money is a negative thing. Money is simply a tool that allows you to live the life you feel most comfortable with. Getting out of debt and into that position is not impossible either. You only need to change your mindset.
Identify Your Goals
If money is an issue in your life you might find you are overidentified with it. You worry about money because you need to think about what is coming in and going out on a daily or weekly basis. The problem with this is that you miss the big picture. Why do you need the money? What are your life goals?
You will find that when you identify more with your life goals rather than your finances your finances will adapt to fit the changing mindset. If you need more money every month to pay bills, the life goal might be to increase the standard of living for yourself or your family. This serves as your motivation to make it happen.
Track Your Spending
After you have understood your financial position, changed your outlook on money and identified your life goals, it’s time to put that plan into action. The key to making a financial plan work is discipline. If you feel tempered to overspend at any point, remind yourself of your goals and your motivation.
Tracking your spending is one of the key ways to help you meet your life goals and achieve financial freedom. There are several ways you can do this but one of the best, most modern, ways is to use an app. There’s a good one called Mint that lets you track spending, monitor debts, and set your life goals.