Dreaming of financial freedom is one thing, putting steps into place that will allow you to reach your idea of financial freedom is the only one you should concentrate on. What financial freedom means to you can differ to what it means to someone else, this doesn’t mean that either is right or wrong, it is about your interpretation of the idea and working towards your financial goals. Taking the time to plan your financial future is important and if you are looking for the ideal, being financially free, this is a great starting point for your future.
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Understanding The Term Financial Freedom
Knowing there are different interpretations of this concept is important, following the statement that best describes it for you, is your first important step.
- Not owing any money to anyone.
- Earning a passive income that covers your expenses.
I like the sound of both, however, I have always focused on the first statement, being financially free to me means that I don’t own money to people, that is my aim and my first goal in reaching financial freedom.
This is the one that most people can aim for, they are in control of their money and spend it on the things they want and need, with the aim of living below their means with the hope in the future they become financially free, free of debt and credit.
What it doesn’t mean is not working, this is just not a practical thought when it comes to financial freedom. You have to work to pay for goods and services. Money is an important part of life, without it, you aren’t financially free, just financially poor.
The second idea of earning a passive income which will enable you not to need to work in the sense of what is a normal job, isn’t too far-fetched and I think that it is something which I do consider and I intend to make steps towards that; however, it is not something that everyone is able to do and that in itself is OK.
Knowing what your goals are for your finances is important; having a plan that will help you get to your dreams is important, without it how will you ever know if you have reached your goals?
Creating Long-Term Financial Goals
Knowing how you want your future to look is important, it gives you direction in which you can head for, and it gives you a sense of purpose and a desire to move towards your goals and dreams.
Thinking about realistic goals for your future is great, planning your money and making sure that you have thought through what you want your future to look like, you can make plans to help you reach your financial goals.
If you don’t want to have any form of credit in your future this is a great plan to work towards, it mightn’t be plain sailing, but making steps that stop you putting items on credit is a great start.
Planning how you will tackle this is easy, you need to create a realistic budget, and one that lets you save for those items you will need in the future. It gives your budget a purpose, you can see where you are heading and sometimes this is an incentive that you can use to help keep you focused when it is a difficult month financially.
Your goals, simple, or even slightly more challenging:
- Not take out any more credit
- Pay off the debt that I already owe
- Save money each month for my future
They are your goals and only you can know the importance that each goal holds.
You are giving your money a purpose, not just for the day or this month but long-term you will have plans that can inspire and help you stay on track.
Creating A Passive Income
The idea of creating a passive income that produces money and yet, after the initial outlay of time and probably some expense, the money still trickles in.
You need caution, the pyramid schemes where people try to sell you the dream, something which doesn’t seem possible, often it isn’t possible and it will probably cost you more money than you ever make.
Creating a passive income that is able to support you is really an ideal and it is more focused on those individuals that are willing to head down the path of self-employment.
Being Financially Free
There are joys that come from living a financially free life, one that focuses on the future and the goals and dreams you can have. It is about taking a step back from the norm, which seems to throw credit at you at an alarming rate.
Taking the pleasure of not lining the pockets of these massive credit companies is a great relief. But I also a worry for those people sucked into borrowing money and end up being trapped in a cycle of debt.
Taking control of your financial situation is your responsibility and if you want to become financially free then you must take steps in the right direction for this to actually work. It takes hard work and commitment to become financially free, it is not something that will fall from the sky.
I really love the author of this book he has so much to say about budgeting and it just makes so much sense!
Therefore, if you are looking to live a financially free life, then you need to start making plans now. Create those financial goals that will allow you to live the life you want, don’t think that you have time to act, the quicker that you act and start making and sticking to your budget and living below your income, the better off you will be financially, now and in the future!