Good Habits to Practice for Financial Freedom

What is financial freedom to you? Everyone has a general desire for it, but that’s too vague a goal. You need to get specific about amounts and deadlines. The more specific your goals, the higher the likelihood of achieving them.

Write down three objectives:

- What your ideal lifestyle requires

- How much you should have in your bank account to make that lifestyle possible

- What age is the deadline to save that amount

Count backward

From your deadline age to your current age and establish financial mileposts at regular intervals in between. Write all amounts and deadlines down carefully. Put the goal sheet at the front of your financial binder.

Make a monthly household budget

This is the best way to guarantee all bills are paid and savings are on track. It also reinforces your goals and resolve against splurging.

Credit cards

And other high-interest loans are toxic to wealth-building. Make it a point to pay off the full balance each month.

Enrol in your employer’s retirement plan

Utilize any matching contribution benefit, which is free money. Also wise to have automatic withdrawals into an emergency fund and investments.

Money for the emergency and retirement funds

These should be pulled from your account the same day you're paid, before you even see it.

Investing

Historically, investing is the best way to grow your money over time thanks to compound interest. Avoid attempting to pick individual stocks. Instead, create a diversified portfolio with regular contributions.

Credit Score

Your credit score impacts interest rates and insurance premiums. Monitor your credit report regularly to fix errors.

Negotiate

Many are hesitant to negotiate out of fear of seeming cheap. However, negotiating - especially with small businesses - can lead to substantial savings.

Learn

Stay updated on financial developments like tax law changes and the stock market. Knowledge helps avoid fraud and maximizes adjustments/deductions.

Make Things Last

Taking care of possessions makes them last longer, saving on replacement costs.

Wants and Needs

Distinguish between wants and needs and adopt a frugal mindset. Live below your means.

Financial Advisor

Get a financial advisor from the start or at the very least once you've amassed substantial assets to help you stay on track.

Stay Healthy

Invest in your health with check-ups, following medical advice, and lifestyle changes as needed. Poor health has negative financial consequences.

Achieving financial freedom requires diligence, foresight, and discipline. By setting clear goals, budgeting, eliminating high-interest debt, investing early and often, maintaining good credit, negotiating prices, staying educated, living frugally, taking care of possessions and health, and utilizing professional guidance, one can position themselves to reach their definition of financial independence. With perseverance and by making smart money choices day after day, financial freedom is within reach. The journey requires commitment but the destination is worth it.