5 PERSONAL FINANCE TIPS TO FIND FINANCIAL FREEDOM

5 PERSONAL FINANCE TIPS TO FIND FINANCIAL FREEDOM, find financial freedom, personal finance tips

Here are my five super simple personal finance tips that will help you on your way to financial freedom.

5 PERSONAL FINANCE TIPS TO FIND FINANCIAL FREEDOM

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Financial advice and the lure of financial freedom through earning loads of money as easily as possible is everywhere. But what is true financial freedom and what does it mean to you? 

The reality is that if all we do when we make more money is to spend more money, we are no freer financially than when we started. Instead, we are tied to continuing to earn more and more money to pay for all the stuff. 

I’m not suggesting for one minute that it’s bad to want to earn lots of money, rather that the burden of having to earn lots of money is the shackle that we need to break free from. 

The average U.S household has an average of $7,104 worth of credit card debt and more than three-quarters of American workers live paycheck to paycheck

SLIP OUT OF THE GRIP OF CONSUMERISM

Consumerism has taken hold of our culture and we won’t find true financial freedom until we manage to loosen its grip on our lives. 

The truth is that once we have a comfortable place to live, good food to eat and clothes to wear, we have our basic needs covered. 

But ever since the advent of the era of Don Draper right through to keeping up with Kim Kardashian and her billionaire sister Kylie Jenner we are fed a lie that what we have is not enough. 

How will we ever feel free if we continue to burden ourselves with needing to earn more to have more? 

SWITCH YOUR FOCUS FROM CONSUMING TO MANAGING

The biggest step my family and I took towards financial freedom was learning to manage our personal finances more cleverly. 

5 PERSONAL FINANCE TIPS TO FIND FINANCIAL FREEDOM

1. ACTIVELY MANAGE YOUR PERSONAL FINANCES 

You need to make a conscious decision to manage your personal finances the way a fund manager manages his funds. Read my post on ten-steps to managing your money for a simple and effective way to manage your personal finances.

2. ALWAYS SAVE SOMETHING 

Even if it is just a dollar. Saving is a mindset, a habit. Set up a savings account and transfer what you can into it once per month. Once you have your rainy-day fund covered off you can start paying off outstanding debt and then making overpayments on your mortgage.

3. ALWAYS PAY OFF YOUR CREDIT CARD IN FULL

Now, there is a line of thought that it is bad to have a credit card. My attitude is that using a credit card through the month means that my money stays in my bank account for longer. Plus I have a credit card that gives me cash back, so I’m earning as I spend. It’s also useful to have a credit card for your credit score and it’s always good to have an active credit card in case of emergencies. Oh, and it’s good to have a credit card because you get buyer protection.

The key thing is to ALWAYS pay off the credit card in full at the end of each month. EVERY. TIME. This is where it is important to actively manage your personal finances and do a monthly management session.

4. BUY FOR NECESSITY RATHER THAN POSSIBILITY

I came across this financially freeing concept on Joshua Becker’s blog Becoming Minimalist. Joshua cites this concept as working particularly well on larger purchases, but I think it’s just as important to use it for every purchase because it’s amazing how much the little purchases can add up.

If your goal is financial freedom, train yourself to think ‘necessity or possibility?’ whenever you make a purchase. Right from choosing a home to buy down to deciding if buying a takeaway coffee is worth it.

Don’t buy the large house that is going to be an eternal burden in maintenance, heating or cooling and mortgage repayments.

5. NEVER TAKE OUT A CAR LOAN OR LEASE HIRE AGREEMENT

We’ve only once taken out a car lease hire agreement and it became a burden. It’s so much better to buy a car and pay for it upfront. Yes, that might mean you aren’t zooming around in a head-turning status symbol, but it also means you don’t have a debt that needs paying off each month. 

If I’m ever tempted, I look at the reality of what the car would cost me using a lease hire versus paying for it in full and I always choose to buy it upfront.

I really hope these simple personal finance tips will help set you on the path to financial freedom. Sometimes the simple, intentional things we choose to do in life that can have as much impact as the big ones.

Want to know more about financial freedom? Read my post on defining true financial freedom.

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