Whether you know it or not, you long for financial freedom and need to learn the steps to find it. Who does not want to live a life free from financial concerns? 

Achieving financial freedom, however, requires sacrifice and hard work. By that, we do not mean blind sacrifice and hard work but rather intelligent sacrifice and hard work.

What good is it to abdicate from your free time and life indulgences so that you can enjoy life when you are old?

When you are old you will not be able to do many of the things you can do while you are young.

That is not to say, however, “let us drink today for tomorrow we die”. You will not build financial independence if you think the future does not matter or will never come.

It definitely will, and there are actionable steps you can take to ensure you are able to save for the future while enjoying life in the present.

So, without further ado, here are our 7 steps to find financial freedom.

The first thing you have to do before you draw up a plan to achieve financial freedom is to understand your current financial conditions and needs.

This means knowing exactly how much you earn as a fixed income. If you do not have a fixed income, what is the minimum fixed income you can expect on a monthly basis?

Knowing this will help you think about your routine expenses. Also, if you have any debt, it is important to know how much of your income it takes up to pay it.

If your monthly expenses are higher than your monthly income, you are far from financially free.

Therefore it is important to determine what you can do to reduce your expenses and increase your income.

Once you get on track with that, you will be on your way to building financial freedom, but not quite finished yet.

Financial planning is one of the first steps for achieving any objective that involves money, especially to find financial freedom.

To do that, start by considering what it would take for you to consider yourself financially free.

This means knowing how much you would have to earn, spend and save so that all your needs are met without you having to worry about money. 

There is no one-size-fits-all solution when it comes to financial planning, but one commonly used approach is the 4-3-2-1 method. 

In this method you will allocate 40% of your income to everyday expenses such as food, electricity, transportation, internet, etc.. 30% goes towards installments or debt payments.

You will then allocate 20% to savings and create an emergency fund. The other 10% you can then use to do good activities like alms or charity.

Without savings there is no financial freedom. You must have the discipline to set aside a portion of your earnings towards savings.

You can set up auto-debit with your bank so that it automatically transfers a certain amount to a savings account.

If you can allocate more than 20% of your earnings towards savings without compromising more aspects of your life than you can bear, by all means, do it.

This will ensure that you achieve financial freedom earlier.

Take into account more mature expenses you are likely to have in the future, such as renovating a house, buying property, or even paying for your children’s education.

Find side hustles that will provide you with an extra source of income besides the one you get from your job.

You can start a business that does not interfere with your main job, for example.

There are also gigs that you can do on the side, working alternative hours when you are not at your regular job.

Whether it is delivering food, driving for Uber, or finding ways of making money online, any extra money is welcome.

Just make sure you do not sacrifice more than you can afford in terms of life quality and time. Remember, you are getting older every day, and you cannot make back that time.

Make time to enjoy life before it is late.

The next thing you need to do is to learn what to do with the money you have earned. As you might have guessed, the answer is investing.

Now, investing can take up many forms which are not limited to financial investments like stock or bonds markets.

You can invest in your own side business, for example, buying equipment that will help you do a better job and charge more for it.

You can invest in yourself, buying a course that will arm you with knowledge that you can use to make more money.

And then, of course, there is investing in the financial markets. You should definitely learn at least the basics of this kind of investment. It is a way to make your money for you while you concentrate on other things.

Debt in and of itself is not a problem as long as you know how to manage it. By “pay off your debt,” we really mean pay your debt on time. 

So if you have installments on your credit card, pay them on time every month. If you have a loan, pay it on time every month.

Never be late on your payments or this could have a negative impact on your credit score.

Not to mention, paying on time helps you stay away from interest payments, which will eat up a portion of your earnings that you could otherwise save.

“Live below your means” is a maxim any financial freedom advocate will tell you. Even if you make a high salary, maintaining a luxurious lifestyle will do nothing for you in the long run.

Save nothing, and you will have to keep working to maintain that lifestyle.

You can then boast that you work hard to live like that, and that may impress some of your friends, but certainly not the smartest ones.

For them, smart people seem to earn money effortlessly. That is true financial freedom.

Whenever we’re talking about finances, we can add the “credit score” topic to the matter. It directly impacts your personal finances!

Now that you know how to achieve financial freedom check the following post to understand how important it is to pay attention to your credit score.