Every morning, we’re given a gift to wake up, breathe fresh air, smell the coffee and the roses, and count our blessings. But for some of us, counting our pennies comes before the blessings. Even the most financially stable and secure take their coffee with a teaspoon of anxiety occasionally.
So how can we move more easily towards sustainable financial freedom? For starters, practice gratitude for everything you have and everything you’ve achieved. Second, don’t expect money to manage itself. Rule of thumb: once hitting your goal or your personal definition of financial freedom, don’t be naive: financial freedom does NOT really equal never having to worry about money again.
Who you’re committed to and why – yourself, your loved ones, your life.
Comparing yourself and your success with that of others isn’t an indication or measure for liberation of financial concerns. You are an individual. Create your unique financial goals and define them according to your standards. We each have different needs, strengths and challenges. Set clear, respectful and realistic boundaries for yourself and your family so that “here today, gone tomorrow” does not define your financial situation. How? Here are some helpful hints and tips to guide you on your financial path, a set of practical habits to maximize fiscal security.
Create a budget, build a plan, stick to it – “disposable” income is fiction
Living well does not mean living without limits. Financial freedom is not an invitation to inflate your living expenses and your lifestyle. Once you reach a satisfactory level of wealth, staying in the green, i.e. in the plus, is your new objective. The same strong money habits and smart money choices that got you to where you are today should continue to accompany you throughout your financial life:
- Track your numbers and plan your spending. Whether you choose an Excel spreadsheet or online budgeting software, planning your monthly income and spending – and sticking to the plan – is your key to long-term financial freedom. Organization and self-discipline help you stay connected to your money and avoid unpleasant setbacks. The sense of accomplishment that comes with staying organized can be almost as rewarding as financial freedom itself.
- Keep a list of your Needs, Wants and Desires. Very few people can afford to buy everything they want. Most of us need to pick and choose. Differentiating between what’s necessary and what’s nice helps you prioritize your spending. Take caution not to fritter away money on momentary indulgences. Revel in spending that sustains your body (and your home) and nourishes your soul.
- Invest you must. Financial freedom is not a one-time event. Spending consumes your capital while inflation erodes the purchasing power of what’s left. To sustain your wealth and grow it for the long-term, you need to put your money to work for you by investing. Investments include stocks and shares, bonds, real estate, venture capital, commodities and more. Choose your investments wisely to ensure that they’re tailored to meet your individual goals, needs and ability to handle risk. Consulting with a licensed investment advisor or financial planner might be the best investment you make in your financial future.
Cut back on the clutter: downsize consumption to increase future security
While spending, shopping and accumulating material things is tempting, it might mean you’ll end up compromising on crucial future expenses – like health care. Avoid clutter, both literally and financially. If you find yourself buying without consideration or contemplation of the consequences of your spending, it’s time to press the pause button. Stop, think and weigh up the pros and cons of the decision you’re about to make. Master the 30-Day Rule: put your desired item on hold for 30 days. Oftentimes after a month has passed, the urge to buy that thingy has also passed.
When you eliminate your physical clutter, your spending and your emotional clutter will follow suit. You’ll discover peace of mind and clarity that enhance your feelings of financial freedom. Guilt free.
Maintenance: your assets & property managed with care for peace of mind
Many of us wait for that opportune moment to purchase our dream home, car or investment property. If you’ve reached that stage and made your purchase – Congratulations! Enjoy every moment. And remember to set aside money monthly for the inevitable maintenance costs. Life happens. And always when you least expect it. Without a financial safety net, you may wake up one day and find yourself in debt.
More money, more problems? Well, one thing’s for certain: more money, more taxes!
So, you’ve achieved financial freedom and you’re settling in nicely. Mazal Tov! Whether you’ve just been promoted, you’re experiencing business growth, your investments are growing, or you’ve been blessed with a windfall, enjoy the taste of financial independence.
And don’t forget your responsibility as a tax paying citizen. Stay up to date with your monthly and annual tax obligations. Because you can bet your bottom dollar that the government won’t overlook your profits for very long. Penalties for unpaid taxes can be even more overwhelming than the payments themselves.
Never sign or assume anything: consult until confident
The small print of any contract is your absolute right to investigate and review, with financial and legal advisers as necessary, before you sign on the dotted line. Financial contracts written in legalese can make your head spin, your eyes glaze over and your brain shut down. Always keep in mind: this is your money; this is your life.
If an investment sounds too good to be true, it probably is. Don’t let your neighbors, your friends or financial market “professionals” make you feel dumb because you don’t understand the financial jargon. Make sure you understand how your investments are expected to perform when the markets are going up and when they’re coming down. Don’t take on more risk than you can really, really handle.
If you’re buying an insurance policy or an annuity, take the time to understand how that financial contract can or will protect you. And when it won’t.
Get comfortable asking questions. Step into your power and ask questions galore until you feel confident that you know what you’re doing, what you’re signing and how you’re spending your money. Never invest in anything you don’t understand.
Achieving financial freedom is a life-long dream for many. But it does not have to equal financial fuss and frustration. On the contrary, keep it simple sweetheart and stick to the strong money practices that got you there in the first place. Be your own financial bodyguard and build your financial independence for the long-term.
There’s wealth in wisdom.
If you’re ready to take Financial Freedom to the next level, sign up for my FREE 5-Day Mini Money Makeover and step into Financial Confidence.