Achieving financial freedom is something most of us dream about but few of us will ever experience. But why is that?
While there is no direct path to achieving financial freedom, there are certain steps you can take to improve your odds. Below is a list of 7 habits that you should form if you’re serious about your own financial freedom.
Make a Budget (Seriously!)
The first step towards economic independence is always a budget. You can’t plan your economy and you’ll never get an overview of your spendings without a budget. It’s the backbone of any financial success, regardless of the amount of money you make.
Furthermore, a solid and well-executed budget is the only opportunity you have to control and influence your own economic situation and its value should not be ignored.
There are many books and guides on the internet that can help you get started with your first budget. Better yet, there is a range of apps that can help you create a budget and, more importantly, make sure you stick with it. You see, the habit of sticking to the budget is almost more important than the budget itself.
Pay Off All Debt and Credits
A person can’t be financially free while owing money to someone else. Therefore you have to make it a priority to pay off all debt and credit you have. Focus on paying everything with high-interest rates first, including all credit cards. Mortgages and student loans typically have lower interest rates and can be dealt with at a later stage.
Start Investing and Trading
Money makes more money and there is no better proof of that than solid investments. Something that most financially free share is that they make enough interest on investments to cover expenses and more investments. Creating passive income is a crucial part of creating economic independence.
Online trading is another habit that can help improve your financial situation, although it’s more time-consuming than long-term investments.
Don’t forget that there is risk involved with both trading and investments and you should study the basics before getting started. Today, there is a multitude of financial resources online that you can teach you how to invest and trade efficiently.
Live Below Your Means
Making a habit to live your best life for as little as possible is essential. In fact, becoming financially free is all about becoming financially smart and finding ways to spend less while you make more.
Use your above-mentioned budget to find all the unnecessary expenses in your life and then start making adjustments in your life to get rid of them.
Warren Buffett could live anywhere in the world and own hundreds of properties, yet he has lived in the same house for 60+ years, and there is a good reason for that.
Don’t Be Scared to Ask for Advice
Getting a financial advisor or a mentor to inspired by can be very useful when improving your economy. It takes time to become financially smart and the best way to learn something is from others that already mastered the craft.
Many times, having a financial expert that handles your wealth is not only practical and time-saving but also a lucrative decision.
Expand Your Knowledge
Financial markets are constantly fluctuating, tax laws and regulations are updated yearly, and potential investment opportunities never stop emerging. It’s your job to keep up with all these changes and adjust your wealth and investment portfolio accordingly.
Make it a habit to always search for new sources of knowledge, in all parts of life.
Stay Active and Healthy
Not only is it your obligation to keep your mental and physical health in check, but it’s also a great investment for the future. Now, good health might not make you any money, but it can help you avoid spending it.
Health care is not cheap and being unfit, obese or sick can have a negative impact on your insurance premiums. Meanwhile, being sick will cause you to lose out on workdays.
Good health also leads to more energy which helps you focus and make better decisions, making a health-oriented habit a win-win in your pursuit of financial freedom.