7 Habits That Can Help You Achieve Financial Freedom

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Seeking financial freedom is a dream that can only be realised with patience, discipline and consistency. It requires a strategic and systemic approach to make it an achievable goal. It represents the ability to live life on one's own terms, without financial constraints and burden of debt.

The quest for financial freedom is not a short event in life; rather it is a lifetime practice that gets perfected with the ability to remain determined and consistent. There may be shortcomings in the approach, but if you stay focussed financial freedom can be achieved. The most basic rule to achieve this freedom is to know the money saving tips and then adopt them as part of your life.

Always remember that you have earned your money the hard way, so don’t be easy while spending it. To become well-versed with the different money saving tips, you must adopt these seven habits and try to stay on course despite occasional hiccups and frequent temptations.

Highlights

  • Why financial freedom is important 
  • Spend wisely
  • Track your expenses
  • Avoid debt trap
  • Investing as habit
  • necessities and indulgences
  • Setting financial goals
  • Impulse buying

Spend Wisely

You may already have realised that many purchases that you have made are not necessary. Often you may have realised that some things that you bought are actually a waste of your hard-earned money. 

This important money saving tip is going to be your first step on the ladder to financial freedom. By spending wisely it does not mean that you become miser, rather you must always weigh the necessity of the purchase. 

Keep Track of Expenses

With life becoming fast-paced and the work-life balance exhausting, it becomes difficult to dive back into memory and recall all the expenses made in the past week or month. The inability to maintain a track of expenses is mainly realised at the month’s end when the bank balance is struggling. 

Keeping track of expenses is, therefore, important and will help you know where you have spent more and where you need to curtail your expenditure. Once you would know where you are getting drained unknowingly, only then would you be able to control that drain. 

Avoid Debt

In most cases, opting for a debt means you are spending beyond your earning capacity. Also, debt - even if necessary - should be avoided if they are particularly with high rates of interest. You should plan your budget in a way that clearing debts should be among the priorities. You should aim to clear your debt as soon as possible and avoid taking debts in future. 

Make Investing a Habit

There is no perfect time to make an investment. You can start making investments right away, even if the amount is small. Making investments with small amounts will inculcate a habit of investing in you. Investment as a habit will make investing part of your life and lifestyle. You will then give preference to investing rather than spending. You can use small amounts to invest in stocks, mutual funds, futures and commodities, to build strong and diverse portfolios.  

Necessities vs Indulgences

Another vital money saving tip that sets you on the path to financial freedom is to differentiate between necessities and indulgences. Necessities are essential purchases that are crucial for maintaining a healthy lifestyle and quality of life. Indulgences are unimportant categories and products without which you will still have a healthy lifestyle. Also, indulgences often lead to extravagant spendings and cut your scope to make investments. 

Set Your Financial Goals

Goals are essential in life as they help in remaining focussed and motivated. Setting up financial goals is therefore an important money saving tip that can help you achieve financial freedom. Your financial goal can be short, medium or long term. You can save for your post-retirement life, an important purchase, or for higher studies.

Avoid Impulse Purchase

Never buy what you have not thought about, or what is called an impulse purchase. When you go to the market, a supermarket or a mall, be specific about what you want to buy and be focussed. Do not buy anything that attracts your attention but may be of no urgent or immediate use for you. 

Conclusion

There are no shortcuts in achieving financial freedom. You need to stay focussed and patient if you want to adopt the money saving tips. One thing that is essential to understand is that saving money, investing, achieving financial freedom needs to be part of your habits and lifestyle. If you cannot stay persistent, you cannot achieve it.

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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