Hello There!
Let’s talk about financial freedom in this post. So what is financial freedom? Financial freedom is the same as financial independence.
In my view, it is the point in life where you can live your life without being worried about how you are going to bring food to your table, how to pay the mortgage, find money to pay for your car bills and your medical bills, all other sorts of expenses daily.
The reason why people want to achieve financial freedom differs from person to person. For someone, it is to do nothing. For someone else, it is to pursue goals and dreams they had in the past (which they had to forgo while working for someone else). Others, it is to have a better life for themselves and their family.
Once you achieve financial independence, you have the freedom to say “Hey boss! I’m quitting”.
If you plan your finances, you may not need to work until your retirement age to be financially independent. This is where you need to have the necessary financial planning and discipline. Live below your means and put your extra money into savings and investments to reap the fruits in the future.
You may have heard this concept of Financial Independence and Retire Early by now. The FIRE movement is gaining a lot of traction and importance among the youngsters, the millennials and Gen Z’s. They are more focused on being financially savvy and ultimately being financially independent and retiring earlier than our previous generation. So even someone at like 20 or 25, fresh out of college who is going to enter the workplace is constantly thinking about how to achieve financial independence and possibly retire at a much younger age.
Financial independence can be achieved by saving and investing part of your monthly salary/earnings for your consumption in the future. This can be achieved in 2 ways – Either increasing the income/earnings or cutting down on some of the discretionary expenses.
Increase your earnings by asking for the well-deserved pay raise you have been waiting for or find a better paying job at another company. You can pick up a side hustle to earn some extra income. Key point to note here is not to spend the extra money or to have an inflated lifestyle.
You can cut your expenses after identifying where you are overpaying in your daily life and finding cheaper alternatives to them. Remove unnecessary spending altogether.
I will write more in detail about these two points and more tips on how you can achieve financial freedom in the upcoming blog posts.