Mohit always thought about his high income and his inability to save for his future goals. He used to invest into what others choose to, always used his credit card for big purchases. This is the typical story of every individual who is either financially illiterate about saving/investing or who does not take his/her finances seriously. They will never consult a professional and end up doing what their friends are. They don’t understand that every individual has a different kind of lifestyle and goals to achieve.
People need to understand that to achieve financial freedom every individual has to sit and decide his/her own path. Cut-Copy-Paste will never help achieve the financial freedom in the life.
In real scenario, just because you have money does not mean you have financial freedom. You have to plan out on how to manage your existing life and future life. And that what you can do when you choose to be disciplined with your finances.
Here are some points which can help you in achieving financial freedom.
Track your expenses Everybody loves to shop, although it depends if it is monthly or weekly. But the important point is to track all the expenses. A recent study reveals that when you track all the expenses, month on month people have experienced that their expenses reduced. Reason because when you start writing every small expenditure you come to know where you are spending more or where you are spending without any reason.
Start making your monthly or yearly budget Making monthly budget should be your regular exercise. If you are making budget and following it then there is less chance of over spending and high chance of reaching your goal. The key to building a strong Financial Plan for the future is to understand how much you spend and save right now. This is called tracking your cash flow, and it can give you a sense of control and confidence that makes it easier to make financial changes in your life.
Set Financial Goals Imagine you are going on a trip without knowing the way to reach there. Is it possible? The same goes into personal finance. People have a tendency to save/invest, but they forget to link it up with the future goals. Financial goals don’t just happen. You have to sit and think about it and then prioritize it. Most people tend to have realistic goals, such as children’s education, marriage, another house, retirement. If you have not set, do it on a priority basis.
Start investing to support your goals Remember only Financial Planning your future goals will not help you in achieving them until you act on. A financial plan gets completed only when the things are implemented according to it. So if you have set your goals and have prioritized them, then it’s the time to act upon. Look out for alternative Investment Planning products which can help you in achieving the result.
Fund your retirement I am still young and I don’t want to save for retirement currently. Will start saving once my primary goals are taken care off. If these are your words then you are forcing yourself in trouble. The early you start saving for your Planning for Early Retirement the bigger the amount will be. That’s because the sooner you begin saving, the more time your money has to grow. Start taking the advantage of compounding.
It’s a well known saying that “No Pain, No Gain”. The above points prove a pain lot many times, but the pleasure and satisfaction you earn after religiously following them and seeing your money grow it a different feeling al-together, something which is hard to describe in words. So if you are out of debt, saving for goals, having emergency fund and most importantly saving for retirement then you are on your way to achieve Financial Freedom.