BAJAJ BROKING
Financial freedom is often considered synonymous with living your life on your terms. For some people, it is the absence of financial constraints, while others look at it as the ability to spend however they want. Some see financial freedom simply as a debt-free way of living, while others see it as equal to being rich. No matter how you see and understand financial independence, you cannot ignore the fact that it is a dire need.
As India gets ready to celebrate the 78th Independence Day, maybe it’s an opportune moment to introspect. Ask yourself, “Are you truly financially independent?”
When it comes to finances, the statistics paint a troubling picture. A report by the Economic Times shows only 27% of Indian men are financially literate. The numbers are even low for women. Only 20% of women are financially literate.
Given these figures, it’s clear that financial freedom remains a distant goal for many. Let’s commit to changing this narrative and strive for financial independence in the year ahead.
Financial freedom is not about just earning enough; it also involves decisions regarding savings, investments, expenditures, and much more. It allows you to pursue your passion without worrying about the money. Financial freedom is when you make all the impactful decisions without a financial burden holding you back. Now that you have understood the importance of financial independence, let's see how you can work towards the same.
SMART Financial Goals
Setting your goals is the first step towards fulfilling any goal. And financial planning is no different. Whether you have simple goals like buying a car or making an investment or big goals like having your own house, try classifying them. Organise these goals into short-term and long-term goals, so you achieve all that you want by the time you have thought for yourself.
A quick tip should be to ensure that your goals are SMART, meaning specific, measurable, adjustable, realistic, and time-bound. Once you've drawn your goals properly, allocate your resources and think further.
Monitor Your Spending
Laying down your goals is important, but so is being accountable. Monitoring your expenses is an important step towards financial independence. You may track and keep a record of your spending on a notebook or digitally on Excel or Google Sheets.
Consider categorising your expenses. For example, make a list of how much you're spending on travel, eating out, and other activities. Monitoring your spending can help you understand if you are doing what needs to be done or if you're simply making impulsive choices that might come in the way of your financial stability.
Quality Investment is the Key
A major portion of the population believes budgeting to be a very crucial aspect of financial independence, and surely it is. However, there is much more to financial freedom. There might be some unforeseen circumstances where your financial needs exceed your budgetary plans. Those are the times when you may rely on your investment sources.
This proves the significance of quality investment. You can simply start with a bank account or an FDI. However, to further cushion yourself from problems like inflation, you need to choose smart investment options. Smart investments can be one of the most important steps towards financial freedom. You may consider investing in stocks, gold, ETFs, and other resources to expand your long-term wealth.
Also, make sure to always follow up on your risk assessment, financial condition, and investment purpose. Considering all this, you can achieve your economic goals with proper security and no reliance.
Self-insurance for Additional Safety
While setting your goals and investing in several resources, you should not forget to insure yourself. Yes, you heard it right. Seeing the era in which we are living and the time when our world is filled with mental stress, exhaustion, and physical infections, it is best to insure yourself to secure yourself against high medical expenses.
It is best to have life insurance as well as health insurance. Health insurance ensures you get the best quality medical support in times of emergency without going harsh on your budget. Compare different insurance plans; align your needs and goals and insure accordingly.
Spend Minimally
Another important step to secure your financial future is to spend wisely. Spending less is not synonymous with living a life full of compromises. Instead, it is understanding the difference between essential and non-essential items. It is about making smart spending decisions wherever possible. For example, saving the costs of dining out by treating yourself to something delicious at home itself. Saving the late fee on your card bills.
These changes may look small at the moment, but their results go a long way.
Stay updated on financial issues
Every year some new tax laws and deductions are introduced. It is important to read and be aware of all such financial news. This can help you stay updated on all the recent news in the stock market. Further, by using the same, you may adjust your financial roadmap.
Additionally, you can also use such information to adjust your investments for better benefits. Not to forget, reading all such news is the best way to be aware and avoid any kind of fraudulent practices.
Pay Your Bills Timely
Sounds trivial, right? But, clearing your debts is an important step in achieving financial independence. It is helpful in several ways. First, it boosts your credit scores. Additionally, the heavy burden of paying your bills is removed from your shoulders.
To ensure you clear off your debt, you may start by clearing the small loans. However, it is important to pay both kinds of loans with higher and lower interest rates on time. This helps you spend less by saving the late fee. Plus, you enjoy a good credit rating.
Professional Help for Better Guidance
Financial planning requires some basic knowledge of your assets, financial trends, market structure, and so on. So, it is always better to educate yourself about financial basics. You can rely on several sources, like journals, magazines, financial news, TED talks, and several other resources.
Seeking professional advice in terms of financial doubt is the best way to satisfy all your curiosities.
Financial freedom not only helps you feel important and equal but also empowers you. Always remember that having control of your finances means reducing the chances of dependency, poverty, and other problems. Financial freedom is the key to living your dream life.
When you're financially independent, you don't worry about financial strains and live your desires. It is easy to attain financial independence with a dedicated approach. With simple steps like setting goals, making investments, spending smartly, and seeking professional help, you can build a strong financial future for yourself.
So, wait no more; simply plan your goals and make them happen. Secure your financial future by following simple measures like making informed choices, reading more, and educating yourself on financial services. Further, you can also try creating additional sources of income by being a freelance writer, designer, or anything else that suits your skills. Try building a strong financial foundation for yourself and see how you enjoy endless opportunities for growth and fulfilment.
Disclaimer: Investments in the securities market are subject to market risk, read all related documents carefully before investing.
This content is for educational purposes only. Securities quoted are exemplary and not recommendatory.
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