Financial freedom can be defined as a person’s financial state is enough to fulfill their daily needs and support their lifestyle. Financial freedom is usually marked by reaching a respectable position at work, or possessing valuable investment or assets which become another source of income, so you are no longer dependent on your main job.
Financial freedom that is longed for by many people can be achieved through proper financial management. Once financial freedom is in your hand, you won’t see your daily needs as a burden. Here are the 4 ways to achieve financial freedom that can be useful for your day-to-day life.
Acknowledge Your Financial Condition and Goals
It starts with acknowledging your current financial condition, is it enough to fulfill all your needs or do you still feel it’s hard to pay for your bills? Your financial condition is not fully tied to the amount of your income, but rather to how much that income can fund your life necessities.
Your financial condition is strongly related to your financial goals. People who have not planned their financial goals tend to have a concerning financial condition because they don’t have any priority scale. Oftentimes, they only think about their life a month from now, failing to prepare for the long future. If you are in this situation, it’s time to make a new financial arrangement, then discipline yourself and focus on your financial goals.
Find a New Source of Income
If you currently only have one source of income, you should consider finding another one. You can start by having a side business that requires easy operations and won’t affect your main profession. If you have more time at hand, you can also try to take freelance projects with a short and flexible time frame.
Apart from doing business, another alternative is putting some of your money in several safe investments, such as gold, mutual funds, or state securities (Surat Berharga Negara). Make sure that you choose a safe and easy investment approach if you are a beginner.
Pay Off All Your Debts
Another way is to pay off all your debts, including your credit card installment. It’s time to change for the better, you should avoid spending too much by using installment, especially for purchasing items that are not urgent in nature. Make “pay off all debts” as your priority in order to achieve financial freedom. Once you are free from debts, you can certainly focus your mind on reaching your financial goals since there won’t be any debts to prevent you.
Minimalist Lifestyle
You can also try to adopt a minimalist lifestyle, which is by fighting the consumptive trend and spending habits that you used to have. Start with your home. You can declutter and fill your home with items that you need for daily activities.
When an urge to buy a certain item or use a service, evaluate and ask yourself “is it necessary?” Then, ask yourself again if this purchase should be done immediately, or can it be postponed. Search for other options that have the same functions but with lower costs.
For example, you want to buy a new laptop. Check your old laptop to see whether it is still in working condition or not. If you really need the new laptop, do you want to buy the premium one because of its features or simply because of its prestige value? When you find another laptop with similar specifications and lower price, it’s better to purchase items based on their functionalities rather than brands.
You can also use the PermataMobile X application that can track your account mutation in a 12-month period to see the biggest spending post of each month. With this financial management strategy, you too can achieve financial freedom.
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