Many people dream of achieving financial freedom. Being free of all loans, debts and burdens. But as the time passes, people get loaded with more and more of these financial burdens.
So is there a way financial freedom can be achieved? Yes. To achieve financial freedom you must follow a set of rules and constrain yourself in these rules. In this article I will share with you the things that can lead you towards financial freedom.
The best place from where you can start is analyzing yourself. Before figuring out where you want to reach it’s always better to analyze yourself and check where you stand. Follow this simple formula:
- First collect your financial details including your assets and liabilities and everything else. Calculate your monthly spending including everything where your capital goes, plus your debts.
- Calculate how much you have i.e., your total net worth (obviously your assets value minus your debts).
All this will do is to provide you your financial status. And now you can make your financial decisions as per your finance section.
Avoid frequent purchases and try setting plans for buying things.
It’s always preferred to pay slowly than to pay at once. That’s where the concept of EMI is useful. If you have financial issues, buy necessary items only and those too on EMIs. It’s always better to pay slowly rather than paying all at once. “Paying at once” can hamper your budget and can slow your financial progress. You can also set targets, do savings by completing a recurring deposit — rather than buying at once.
Plan a Budget
This is the best you can do to save your monthly expenses. Planning your budget can help you out by lowering your monthly expense. You can set some amount as your deadline for limiting your monthly expenses. Lowering your expenses will encourage you to save more and that will make your way out towards financial freedom.
Save more for your future. Start managing your personal finance. Cut your data expenses plus reduce your movie tickets, lower down having meals outside, opt for these things whenever necessary. Saving on a regular basis will increase your net worth no matter how small it will be and an increased net worth will surely be a step towards your financial independence.
Be prepared for assets today that you want to buy in future
Planning for an asset today is much healthier than frequently buying it without much consultancy and research. For example, purchasing a decent house is everybody’s need .It is a well known fact that most of the people buy houses without much research and it is also one of the reasons by which most of the people face financial crises in their life.
Buying a decent home is not very difficult. All you need is a little planning. The most common but effective way of doing that is applying for mortgages. Mortgages are the most trusted and tested way of buying any property. Let’s say it is a house for now. All you need to calculate is the mortgage period, you can use a mortgage calculator to do so.
Once the mortgage is calculated you will get to know how much you need to pay every month or every year. You can then effectively plan your monthly expenses.
That’s all that you need to do.
Financial freedom is not a hard goal to achieve, it’s simply cutting expenses and saving as much as you can.
Whenever you are buying something bigger, plan your move smartly so that the expenses do not affect your pocket. As prevention is always better than cure .Try not to buy expensive things but whenever it’s necessary, go for EMI rather than paying in bulk. Paying at regular intervals is better than paying in bulk. Opting for EMI will not cause much distortion to your monthly budget. You can always opt for a mortgage whenever you wish to add some bigger assets to your basket.