Throughout history freedom and independence has more often than not come about through struggle. And even though this fight for “financial freedom” isn’t challenging of flesh and blood, it is, none-the-less, an extremely real struggle that demands strategies, discipline, and sacrifice.
So just what is Financial Freedom, and is it worth fighting for?
To begin with, asking if financial freedom may be worth fighting for is like asking if peace of mind is a desired state. Obviously it is! So just what is it? Could it be the financial place where you stand free from all financial responsibilities… ? Or the amount of money position where you’ve all you’ll ever need? No it’s not that at all. Actually “responsibility” may be the core of the freedom.
So, for our purposes, financial freedom is an economic mindset and monetary position where money worries are at a minimum, and ease of purchasing what you would like and need is easily and responsibly accomplished. Most importantly this means having income enough to sustain the specified lifestyle. This occurs when the income from your entire assets exceeds your expenses.
It entails that for some people, no matter how much money they’ve, they’ll never attain financial freedom because they don’t have the desire or the discipline to acquire it. An individual earning $100,000 each year and spending $110,000 is in a much worse financial situation than the usual person earning $75,000 and spending $70,000. One core principle of financial freedom is to pay only you’ve coming in… and preferable less. Complacency, and surrender to the “wants” a lot more than to the “needs” are hallmarks of the financially oppressed.
So how will you win the battle for financial freedom?
Generally in most battles, be it chess, video games, life, or actual war; victory takes planning and implementation. In chess you may give up a knight to trap a queen… or in war, exercise a proper retreat in order to win the war. Therefore it is also in this battle for financial freedom. For many of us to be successful in this endeavor, it will end up necessary to sacrifice a number of our immediate wants and desires in order to reach the stated financial goal.
You can find three major components to the battle:
The first is strategy… or creating a plan. Debt free (how to become), post debt free plan… You should responsibly manage what you already have. Remember the big three: planning, dedication and discipline!
List all income and expenditures. Honestly determine what is required for the absolute essentials… commit that amount of one’s income to that particular use, and with what is left create an idea of attack for eliminating all credit debt.
Start by gathering and listing all credit debt… credit cards… department store accounts… any reoccurring monthly debt. Examine the accounts and list them in accordance with interest rates. Choose among the top interest rate accounts as usually the one to attack first. Make minimum payments on all of the debts except usually the one you’ve chosen, then put all available funds toward eliminating that debt.
When the initial debt is eliminated, choose the next debt to remove and put all available funds until it too is eliminated frugalisme. Continue this process and soon you eliminate your entire debts. It may seem slow initially, but you can see the snowball effect that this can create… the last bills is likely to be eliminated pretty quickly
A Very Real Caution
As you begin to remove your debt, do not fall back into the trap that got you in this fix. That’s, don’t think that since you don’t have any debt you are able to go out and get that “whatever” you’ve been wanting. Now you’ve only succeeded in winning the initial battle for financial independence. The war is currently where over… STICK TO THE PLAN!
So, when your entire credit debt is finished, the amount of money you’re using to pay for them is now available for sensible investing… which can be the main next step.
Hopefully, in accomplishing the elimination of one’s credit debt, and not succumbing to the temptation to pay, you’ve made the psychological changes necessary to initiate the next phase… This change in attitude will enable you to truly achieve the battle for financial freedom. Begin to construct wealth by doing two things… first by continuing to tap into your brand-new found discipline, spend less that you’ve to arrive and make some low risk, longterm investments.