9 Habits to Help You Reach Financial Freedom

Everyone wants to achieve the phase where they have enough savings, investments, and cash on hand to afford the lifestyle they want - financial freedom. Unfortunately, too many people fail to achieve it. They are burdened with increasing debt, financial emergencies, profligate spending, and other issues that thwart them from reaching their goals. Then there are unexpected events, such as a strike or inflation—or pandemic—that overturn plans and reveal holes in their safety nets that weren't visible before. Financial freedom is a journey and while it is true that any trouble could happen to nearly everyone along the line, these habits can put you on the right path to attaining true financial freedom.

1. Set Life Goals

A wish or desire for financial freedom is too vague a goal, so get specific. Write down how much you should have in your bank account, what the lifestyle entails, and at what age this should be achieved. The more specific your goals, the higher the likelihood of achieving them. Next, have a timeline and establish financial mileposts at regular intervals. Write it all down neatly and make the goal sheet visible.

2. Make a Budget

Making a monthly household budget—and sticking to it—is the best way to guarantee        that all bills are paid and savings are on track. It’s also a regular routine that reinforces your goals and resolve against the temptation to splurge. 

3. Pay Off Credit Cards in Full

High-interest consumer loans are toxic to wealth-building. Make it a point to pay off the full balance each month. Some loans typically have much lower interest rates; paying them off is not an emergency but paying on time is and will build a good credit rating.

4. Create Automatic Savings

Pay yourself first. Enroll in your employer’s retirement plan and make full use of any matching contribution benefit. It’s also wise to have an automatic withdrawal for an emergency fund, which can be tapped for unexpected expenses, and an automatic contribution to a brokerage account or something similar. Ideally, the money should be pulled the same day you receive your paycheck, so it never even touches your hands, avoiding temptation entirely.

5. Start Investing Now

Bad stock markets can make people question this, but historically there has been no better way to grow your money than through investing. The magic of compound interest will help it increase exponentially over time, but you need a lot of time to achieve meaningful growth.

6. Negotiate Prices

Many Citizens are hesitant to negotiate for goods and services, worrying that it makes them seem cheap. Overcome this cultural handicap could save thousands each year. Small businesses, in particular, tend to be open to negotiation, where buying in bulk or repeat business can open the door to good discounts.

7. Live Below Your Means

Mastering a frugal lifestyle by having a mindset of living life to the fullest with less is not so hard. Indeed, many wealthy individuals developed a habit of living below their means before rising to affluence. This isn’t a challenge to adopt a minimalist lifestyle or a call to action to head to the dumpster with things you’ve hoarded over the years. Making small adjustments by distinguishing between the things you need and the things you want is a financially helpful habit to put into practice.

8. Get a Financial Advisor

Once you’ve gotten to a point where you’ve amassed a decent amount of wealth—be it liquid investments or tangible assets that aren’t as readily available to convert to cash—get a financial advisor to educate you and help make decisions.

9. Take Care of Your Health

The principle of proper maintenance also applies to the body. Invest in good health with regular visits to doctors and dentists, and follow health advice about any problems you encounter. Many problems can be helped—or even prevented—with lifestyle changes such as more exercise and a healthier diet.

These steps won’t solve all of your money problems, but they will help you develop healthy habits that can get you on the path to financial freedom—whatever that means for you.

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