There will come a point in your life where you start questioning your future. You may wonder if you’ll ever make a family of your own, buy your own house, or get your dream car. Another idea you may question is whether you could retire earlier than most people do, and if so, how you could afford it.
It’s difficult not to let your life revolve around money when it’s the very thing that is making the world go ’round. This is indeed the ugly truth because you can’t get anywhere or anything if you don’t have the money to afford it, so you’ll settle with working day-in and day-out to earn your living.
But you can’t always live from paycheck to paycheck; sooner or later, you may need to get a hold of additional resources because of a life-threatening situation that you didn’t foresee. And when this happens, it can be harder to bounce back because you don’t have the resources to make it possible.
That’s why you need to start working on achieving your financial freedom from the moment you find a stable source of income. Financial freedom is not just about having the means to afford anything you want; it’s also about not having to worry about what happens tomorrow because you’re prepared for anything that may come your way.
If you don’t know how to achieve that kind of freedom from the shackles of money, then you’re in the right place. Learning about personal finance and achieving financial freedom can be very overwhelming at first, but here’s a three-step guide that you can use to help you get closer to your goals:
1. Leave the Unbanked Population
The unbanked are people who don’t use traditional financial services like banks because they prefer transacting in cash. This is either because they don’t trust financial institutions to protect their money or because they aren’t qualified to have bank accounts due to the stringent requirements.
However, to achieve financial freedom, you need to have the right avenues to manage your money. Of course, you always have the option to use alternative financial services such as payday lending, check-cashing, or digital wallets, but your money will be more secure if it’s kept in a bank.
Plus, you will only be able to build your credit to buy a house or car in the future if you have an account. This means that the earlier you get a bank account, the longer you can build and maintain your good credit. So don’t be afraid to check out your banking options and choose where to open your savings account.
2. Apply for Life Insurance Coverage
The next step in achieving financial freedom is to ensure that your life is insured no matter what comes your way. There’s no definite way to tell the future, which means you have no choice but to wait and see how it unfolds. However, what if you didn’t have to leave everything up to chance?
Applying for life insurance coverage can help you secure your financial future against all odds. So if you ever find yourself involved in a debilitating accident that causes you to lose your ability to work, you won’t have to worry about where to get your food tomorrow because your insurance will cover that.
You may think that it’s useless and impractical to invest in something you don’t know will happen, but being insured removes the guesswork from the situation. This means that you won’t have to fear for your safety because you’ll be financially protected, and instead, you can just live your best life.
3. Set up a Retirement Savings Plan
The last step to achieve your financial freedom is to plan for the long-term: retirement. You may still be two, three, or four decades away from your retirement age, but it’s never too early to start planning for your future. Besides, planning doesn’t necessarily mean that you need to do anything about it yet.
Retirement planning involves gauging how much money you’ll need to maintain a certain quality of life. It can also help you pinpoint your potential sources of income once you can no longer work as a full-time employee, which means you should either have your own business or look into investing opportunities.
You must understand that you won’t be able to work your entire life. If you don’t start planning for your retirement as early as now, then you might not have enough saved up once you get there because building your retirement fund takes time. And you can’t rely on your pension or 401(k) alone if you want financial freedom.
There’s a good reason some people can only dream of achieving freedom from their finances: they don’t want to put in the work. No one ever said this would be easy, but it’s a worthwhile way to spend your time, especially if you want to be able to live your life without any regrets.
