Wouldn’t it be the best thing in the world to have enough income to not have to work another day in your life? Or at least have the option to work at doing something you enjoy rather than something you hate to keep up with affording your current lifestyle.
One of the reasons why most people work up until they’re in old age is because financially they don’t have a choice not to. But it’s not the only way to live, and a lot more people are becoming aware of the term ‘financial freedom’ being a desirable status from a much younger age than the proposed pensioner age.
Pay Off Your Debt
There is no magical gateway to financial freedom; it takes work. Part of that work is to tidy up your finances and pay your debt off. This includes your car on finance, your mortgage, the TV you have on credit, and your student debt.
If you’re stuck with which area to target first, look at your debts to decipher which one you need to start paying the soonest, alongside which debt has the highest interest rate. The most expensive debt in terms of interest is robbing you of extra money on top of your purchase that could be used elsewhere in the plan to financial freedom.
Save, Save, Save
An emergency savings account is a must-do for anyone. It should account for at least 3 to 6 months of your living expenses to help you out of situations that are beyond your control. For example, you may fall ill and become incapable of working for a while. You might lose your job, or your company might have missed paying your for a month and won’t be able to rectify the issue until next month!
Your emergency fund sets you up to cope with life’s crappy matters such as these, without having to look to payday loans with extortionate interest rates to help you out in your moment of need. Having a backup fund allows you the scope to handle money problems, without spiraling into more debt!
Unless you are super-rich, the likelihood of you paying off all your debt, and making ample savings to cover all of life’s threat in a short amount of time is unlikely. And so you need to back your life (and your family’s) with cover. Just in case an event crops up that you’re not prepared for, and that could damage your potential of reaching your financial freedom goal post. Such as affordable term life insurance, a monthly fee, for cover that can cover you up to thousands of dollars if something terrible happens to you.
It’s not what anyone really wants to think about, but accidents, illnesses, and even death happen to people every day. The difference is some people preempt this and cover themselves, and others don’t and end up in severe debt/stress because of it, miles away from their financial freedom goal.
Create a clear picture of your debt and how long it will take to pay off. Factor in if you can reasonably afford to overpay to reduce the term of the agreement and help you climb steps closer to a free life without finances dragging you done.
Alongside this, begin building up a pot of money for emergencies, and for your pension, of course, to look after you when you want to stop working. Last of all, purchase relevant cover to protect your families lives against the ‘what if’ moments.