6 Tips For Achieving Financial Freedom
More people struggle with debt today than ever before. Most individuals struggle to get ahead, they find themselves stuck in a vicious cycle of debt. For the debt-stricken individuals I am very happy to tell you that there are multiple ways to get out of debt without needed outside help, it all comes down to good and bad habits. Forming good saving/spending habits is the best thing you can do to really get ahead of the debt. Therefore, I give you my 6 favorite tips for achieving financial freedom.
Follow a budget
Arguably the most important tip I can give you is to follow your budget. Understanding where your money is coming from and where it is going will help keep you organized. One of the most effective ways to do this is to write down how much money you will receive this next paycheck, as well as all the bills you have to pay. Creating a realistic budget and sticking to it is the most essential step before becoming debt free.
Control your spending
Like it or not, but it’s essential for you to bring your spending habits under control. In fact, it’s a mandatory step towards fixing your financial problems in general. Studies reveal that most of those who’re known to spend too much are fascinated with the act of purchasing, rather than with the value of the items. That being said take a look at your spending habits, do you tend to buy things impulsively? If so ask yourself whether or not you really need that bag of cheez-its and if the answer is no, then you can very well do without them.
Make a “money regrets” budget to get over mistakes
One of my favorite tips for getting out debt and controlling your spending is to make a money mistakes budget. Brokepedia’s founder Kristin Wong suggested making a list of the items you buy that you know you could have saved money on. For example, let’s say I go to the gas station down the street from my house to get gas. I know it’s more expensive because it’s on the corner of a busy road, but I’m busy so who cares. I spend $8 more at that gas station than the one a little further down. I would write that $8 difference down in my regrets budget.
How can I get over that $8 regret?
Easy, the next time I need gas I go to the one that I know is $8 cheaper. What this does is it allows me to erase that $8 regret from my first trip to the gas station. This is a great tactic for allowing yourself to see the results of your efforts. You can use this tip with every purchase you make, the more conscious you are of your spending habits, the more likely you will be to make better spending decisions. Check out the full article at Brokepedia.
Stop using credit
Credit cards are often the biggest contributes to debt. Most people get into trouble easily because they buy things they don’t have the money for. Whenever purchasing something with a credit card ask yourself if you have the money to pay for it in cash. If the answer is no, then don’t buy it! Using credit cards isn’t always bad, in fact building your credit score is often the only way to make big purchases like a car or house. The best way to minimize the negative impact of credit cards is to pay off your credit card debts monthly. Make sure to pay on time! Not paying on time consistently will have very negative consequences on your credit score and other things. Understanding how and when to use a credit card will make a huge difference in you ability to achieve financial freedom.
Open savings account
You should open a savings account with a high interest on it. Deposit your extra money here. It’s best if you can decide on a specific amount you’ll regularly deposit . Then you can build on your funds in this account and use it to pay off your debts.
Finally, understand it takes time
Getting out of debt won’t happen overnight. It takes hard work and commitment. The first step is acknowledging your good and bad habits. Build on the good habits and try to be conscious of the bad ones. It’s important not to get discouraged, make sure to reward yourself occasionally, it will make a difference. Hopefully, you are on your way to financial freedom! I would love to hear any other tips you might have! Please feel free to leave a comment below.