Why Is Financial Freedom Important To You?

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Financial freedom can have a different meaning for everyone. It may seem like a destination, instead, it can be integrated into your lifestyle as a daily process. For me, it gives me confidence knowing that I am taking ownership over my financial affairs and even more importantly, my life. The freedom allows me to do what matters most, when I want, how I want and with whom I want, and as much as I want.

Financial freedom is the result of making choices that put you in a position of being financially secure (cash, property, emergency, etc.) so that you can live and enjoy your life without constantly worrying about financial matters. You may consider financial freedom to be a salary-paying career that excites you when you wake up or pay off all your debt, or an annual trip overseas, or retire as early as possible.

To achieve financial freedom, you do not have to be wealthy in possessions or possess a high net asset value, however, you do need to determine what your ideal lifestyle is and match your financial affairs accordingly.

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Fred Wagenvoorde – Financial Planner

Although achieving financial freedom can be a roller coaster ride, it should not be set up to be a struggle. Despite believing that they can achieve this freedom, most people are not always willing to do the ‘work’. If you truly desire financial freedom, then taking the necessary steps to achieve this will be easier than you might think. Once you have the foundation in place, all that is left is to maintain the structure going forward without it feeling overwhelming.

Entry-level steps toward achieving financial freedom:

  • Determine what lifestyle you see yourself and possibly your family, living

This is a foundational step to knowing what your goals are because without goals, you cannot maintain direction.

  • Determine the optimal number to achieve this desired lifestyle

Make sure you consider the costs of living, emergency funds for unforeseen circumstances and goals. Once you have this number, consider the cash flow that would enable you to achieve this desired lifestyle.

  • Preparing an action plan to get from where you are to where you want to be

This step does not need to be done independently. You can seek council on this whether it’s someone who you see is in this position or a financial coach/planner. You may even consider this being your first step, as a quick conversation with someone you trust, can give you the cues you need to put your plan into motion.

  • Educate yourself on the components that make up your plan

Understanding even just the general outline of your plan will allow you to feel confident and empowered along your journey to financial freedom. Without this, you may feel that you are sitting in the dark and may get anxious and look at your finances too frequently.

  • Review this action plan regularly to maintain the course.

If there are four words you should embrace after creating that financial plan, you should look to ‘save, invest and forget’. These simple but forgettable words may help lead you down the path to financial freedom. ‘Forgetting’ does not mean not reviewing your plan, but rather setting up or even automating the process (e.g., debit orders to investment accounts) so that you are continuing with the momentum and staying the course. ‘Regularly’ does not specifically mean daily, monthly, or yearly.

It means you should look to review your plan at consistent intervals and more importantly at inflection points in your life (marriage, children, new job, etc). Financial freedom is the result of years of persistence and sensible money management. You can work toward your dream financial future one day at a time by setting financial goals and reinforcing robust spending and saving habits.

Put a plan in place to achieve your financial goals, and you will be on the road to financial freedom.