Benefits of financial freedom

The last few years of living in a pandemic have taught us that we can’t depend on our jobs to be our only source of income. Anyone can understand the stress that comes with losing your income without notice.
Even during that difficult time, not everyone felt the same level of stress. For those who already had a plan in place to achieve financial freedom, losing a full-time job wasn’t as big a financial hit as it was for others. Once you start thinking differently and put a plan in place, you can increase your financial resources, so losing one source of income doesn’t completely derail you.
Being put in a financially vulnerable situation can be a big motivator in seeking financial freedom. At one time or another, many of us have felt stuck in a job that was not only uninspiring but soul-sucking. Maybe you tolerated a toxic work environment or felt undervalued and underpaid because of the need for a pay check.
Being financially free allows you the choice to do what you want instead of doing what you need to do to pay the bills—and it doesn’t have to take a lifetime to achieve. You may already be familiar with the expert and author on financial freedom, Grant Sabatier, who, in just 5 years, went from $2.26 in his bank account to a liquid net worth of over $1 million.
How did he do it? He made the decision and created a plan. He had a college degree in philosophy, not a degree with big money traditionally attached to it, but he was dedicated and driven. The way he achieved it is accessible to all of us.
How to achieve financial freedom
If you have a goal to achieve financial freedom, there are definite steps you can take to get you there. For most people, being financially free is having enough savings in a bank account to handle unforeseen emergencies, having enough to save for retirement with a 401(k), individual retirement account (IRA), or other types of retirement accounts, and living a life they enjoy.
To achieve your goals, you’ll need to create a plan and stick with it. However, these steps can help you get started.
Step 1: Set clear life goals
Wanting something without a clear plan doesn’t get you closer to achieving it, so it’s crucial to write down details about the lifestyle you want. The more detailed you are, the better. Writing down goals and keeping them handy can help you stay focused and give you a better chance of success.
Step 2: List all your debt
This terrifies most people, but if you don’t know your current financial situation, you can’t put a plan together to pay it off.
Step 3: Create a realistic budget
A budget is part of your road map that will help keep you on track. One of the most straightforward budget plans is the 50/30/20 rule, which states that 50% of income should be for bills, obligations, and needs, 30% for wants, and 20% for savings and retirement. It’s straightforward and simple.
Step 4: Pay off debt
Having credit card and loan debt with high-interest rates can monopolize a big chunk of the money you bring home, which directly interferes with the ability to build wealth. Paying it off not only relieves a burden but will put you on the path to creating financial freedom.
Step 5: Monitor credit
Check your credit scores and keep track of any use of credit. Pay off balances in full each month to ensure a good credit rating.
Step 6: Automate savings & investing
By making your savings plan automatic, you don’t have to think about how to save money after other obligations are paid. A great way to start is by automating contributions to your employer’s 401(k) retirement plan or an IRA. Be sure to save the maximum amount to ensure that you take advantage of any employer matching contributions offered.
Step 7: Spend less than you make
It can be challenging to do when you’re paying off debt, but that money can be dedicated to building wealth once your debt is paid off. Keep track of where your money goes and see where you can cut spending.
Step 8: Work with a financial advisor
When you need help managing finances, a financial advisor can assist you with various options to help you reach your goals.
Step 9: Make financial literacy a priority
A financial planner can help you learn to effectively manage your finances with skills that include budgeting, investing in the stock market, and money management to build a solid financial future. You can also use online resources to improve financial literacy.
Step 10: Increase your income
In addition to learning how to manage your money, you can accelerate financial freedom by finding ways to increase your income. People have (or hope to have) additional income streams for various reasons. Whether you need more money to pay for groceries or save for retirement, having multiple sources of income is key to achieving financial freedom.
Side hustle ideas to build income
Building income streams takes work. However, more often than not, the work is done upfront with little maintenance on the backend. Here are some ideas for independent income and passive income streams that you can work on in your spare time:
• Start an Etsy business – as one of the most popular online marketplaces for crafters, Etsy sellers offer jewellery, books, crafts, clothing, and more. Setting up a shop is easy, but marketing is key to earning money.
• Pet sitting – we love our pets, and people are willing to pay to ensure their pets are well taken care of.
• Driving in your spare time – Uber and Lyft are practically household names and have become a popular way to make extra money. Just sign up and start offering rides.
• Freelancing – whether you can write, code, or design websites, you can use your skills to make extra money on the side.
• Real estate rental – the Airbnb business is booming and can be lucrative, especially if you live in a vacation spot. Check laws pertaining to rentals in your area. If you get the green light, a few weekends a year can add a nice nest egg to your investments or help to pay off debt.
• Peer-to-peer lending – through a lending website, you lend money to individuals and earn interest on the loan.
• Create online courses – we all know something that others can benefit from, and courses are a profitable way to share that information. Udemy is one of the largest online educational platforms, but there are others.
• Sell digital products – eBooks, courses, songs, and apps are all digital products that can be sold on a variety of platforms.
Side hustles and passive income streams give us a way to accelerate our financial goals without taxing our already hectic lives. We only have 24 hours in a day, and, for most of those hours, we’re working and taking care of other responsibilities. Part-time work and passive income allow us to improve our financial situations and meet our goals for financial freedom without completely sacrificing the life we enjoy.
The bottom line
Financial freedom is about having enough money to give us the freedom to choose how we want to live our lives. Although it’s about money and having control over our finances, it’s even more about the feeling it offers.
Think about the life you could enjoy if you didn’t have to worry about paying the bills. Wouldn’t it be nice if an unexpected expense was a minor problem rather than another stressor we don’t need? We all have the opportunity to learn to manage our money better, have an emergency fund, and invest wisely.