We can all relate to that anxious feeling that fills your stomach with water – a bill has just come through the mail and it’s for an unexpected repair you had on your car. Well, it might have been worse if the accident hurt more than your car so you just have to be happy you are alive, call up some few friends for a quick loan and you are sorted. Instead of doing it that way, how about if you had some money lying in you account that had no immediate use?
You would pay for the bill and forget almost instantly that money has been spent. Can you identify that sense of relief? It is what people feel when they are financially stable – financial freedom!
It is not uncommon nowadays to meet people in their 20s or 30 who are planning on early retirement. That is strange given that older generations could not think of that before they were 60. Well, people are discovering the world and the more freedom you have, you better placed you will be at traveling the world. People all over the world are also realizing that raising kids well is solely on their shoulders and they would rather influence them than have the world impose values on them. You do not have to be rich to achieve financial independence though; here are some tips to put you on the right track.
Do Away With The Budget
We have been taught over and over again that drawing a budget every time before you start spending money is the right thing to do. There is another way to look at a budget that you probably have never heard about; break down your budget into expense categories e.g. transport and housing. How can you bring down the costs of commuting and housing? The best way to get an answer to this question is to think about the return you want on each of these expenses. You can consider buying a cheaper car or moving closer to your workplace to cut on transport costs while buying a house in a low-cost to the medium-cost neighborhood may work to reduce housing costs.
Only Spend On Essentials
If your dream is not to retire way before your peers, can you still achieve financial independence throughout your working life? If you had a terminal health condition, for instance, you would be in need of medical care throughout your life. The cost of health care is one of the weighty aspects that can hit your road to financial freedom. You can make sure that you always have money for hospital visits, prescription drugs and even procedures that are considered essential from time to time. When your fiancés are in order, that means that everything you need can be accommodated- that is financial freedom!
Try The Nomad Life
That may sound primitive but thousands of people around it are embracing it. Geographical Arbitrage is an effective way to cut down on expenses but only applies to those whose work allows them to work from home. Instead of locking yourself up in the house day and night, you could choose to relocate albeit for a while to a different region or part of the world where there are working facilities but the cost of living is low. A web designer, for instance, does not need to be in the office and even when a project is complete; they are still as effective making a web-presentation as they would presenting in person. Such a person would save thousands in dollars if they chose to live in a commercial town in Africa as opposed to an affluent neighborhood in the United States.
Learn To Buy And Hold
Many people definitely want to make money and to make it fast which explains why the stock market is abuzz as people race to sell shares at the slightest gain.
How about you forget about the shares you hold and allow them time to grow in value. Even if you live your life just surviving through the bills, stocks that have been held for 10-30 years are a handsome retirement package.
Respect The Money You Make
People say it all the time but until it appeals to you directly, it would never make sense; money you have earned with your sweat tastes sweet. Especially if this money is all you have to live by, then you will treat it with respect. Actually, you will want to hold on to it longer, buy things that make you proud to have worked the job and give it only to people you are certain will not waste it. Treating money with respect is simple – when you withdraw it from your bank or receive it from your employer, place it neatly in a wallet or purse. From there, you will notice that every time a need to spend money arises, you will consider each note as valuable and it actually is.
Resist The Temptation To Spend
Everywhere you look there is something to buy which you actually need. It is cruel to burst this bubble but you do not need to have everything. Do you need to rent out a 2 bedroom apartment when you are just alone or eat out every day when you have food and cooking appliances in the house? The excuses will always be there if you let the- I am too tired, I am not used to small spaces, etc. you can do away with the excuses that justify your heavy spending and only when you do will you realize that you are just as happy, plus richer.