Throughout history freedom and independence has more often than not come about through struggle. And even though this fight for “financial freedom” is not challenging of flesh and blood, it is, none-the-less, a very real struggle that demands strategies, discipline, and sacrifice.
So just what’s Financial Freedom, and could it be worth fighting for?
First off, asking if financial freedom may be worth fighting for is much like asking if satisfaction is a desired state. Obviously it is! So just what’s it? Can it be the financial place where you are free of all financial responsibilities… ? Or the cash position where you have all you’ll ever need? No it’s not too at all. In fact “responsibility” may be the core of this freedom.
So, for our purposes, financial freedom is an economic mindset and monetary position where money worries are at a minimum, and ease of buying what you need and need is easily and responsibly accomplished. Most importantly it means having income enough to sustain the desired lifestyle. This occurs once the income from your entire assets exceeds your expenses.
It also means that for a few people, regardless of the amount of money they have, they will never attain financial freedom because they do not have the desire or the discipline to acquire it. A person earning $100,000 annually and spending $110,000 is in a much worse financial situation when compared to a person earning $75,000 and spending $70,000. One core principle of financial freedom is to spend a maximum of you have coming in… and preferable less. Complacency, and surrender to the “wants” a lot more than to the “needs” are hallmarks of the financially oppressed.
So how do you win the battle for financial freedom?
In many battles, be it chess, game titles, life, or actual war; victory takes planning and implementation frugalisme. In chess you may stop trying a knight to trap a queen… or in war, exercise an ideal retreat in order to win the war. So it’s also in this battle for financial freedom. For many of us to be successful in this endeavor, it can become necessary to sacrifice a number of our immediate wants and desires in order to reach the stated financial goal.
You will find three major components to this battle:
The foremost is strategy… or having a plan. Debt free (how to become), post debt free plan… You have to responsibly manage that which you already have. Remember the big three: planning, dedication and discipline!
List all income and expenditures. Honestly determine what’s required for the absolute essentials… commit that amount of one’s income to that use, and with what’s left create a plan of attack for eliminating all credit debt.
Start with gathering and listing all credit debt… credit cards… department store accounts… any reoccurring monthly debt. Examine the accounts and list them according to interest rates. Choose among the top interest rate accounts as the main one to attack first. Make minimum payments on all of the debts except the main one you have chosen, then put all available funds toward eliminating that debt.
When the initial debt is eliminated, choose the following debt to remove and put all available funds until it too is eliminated. Continue this technique before you eliminate all of your debts. It may seem slow in the beginning, but you will see the snowball effect that this can create… the past bills will undoubtedly be eliminated pretty quickly
A Very Real Caution
As you begin to remove your debt, do not fall back in the trap that got you in this fix. That’s, don’t believe now that you do not have any debt you can get out and get that “whatever” you’ve been wanting. At this time you have only succeeded in winning the initial battle for financial independence. The war has become where over… STICK TO THE PLAN!
So, when your entire credit debt is finished, the cash you’re using to pay for them is available these days for sensible investing… that is the main next step.
Hopefully, in accomplishing the elimination of one’s credit debt, and not succumbing to the temptation to spend, you have made the psychological changes necessary to initiate the following phase… This change in attitude will enable one to truly succeed in the battle for financial freedom. Begin to build wealth by doing two things… first by continuing to tap into your brand-new found discipline, spend less that you have coming in and make some low risk, long term investments.