Throughout history freedom and independence has typically come about through struggle. And although this fight for “financial freedom” isn’t a struggle of flesh and blood, it’s, none-the-less, an extremely real struggle that demands strategies, discipline, and sacrifice.
So just what is Financial Freedom, and could it be worth fighting for?
To start, asking if financial freedom may be worth fighting for is similar to asking if reassurance is an ideal state comment avoir la liberté financière. Obviously it’s! So just what is it? Could it be the financial place what your location is clear of all financial responsibilities… ? Or the cash position where you’ve all you’ll ever need? No it’s not too at all. In fact “responsibility” could be the core with this freedom.
So, for our purposes, financial freedom is a financial mindset and monetary position where money worries are at a minimum, and ease of purchasing what you would like and need is easily and responsibly accomplished. Most importantly it indicates having income enough to sustain the required lifestyle. This occurs when the income from all your assets exceeds your expenses.
It entails that for a few people, regardless of how much money they’ve, they will never attain financial freedom because they don’t have the desire or the discipline to obtain it. A person earning $100,000 each year and spending $110,000 is in a much worse financial situation than the usual person earning $75,000 and spending $70,000. One core principle of financial freedom is to pay no more than you’ve coming in… and preferable less. Complacency, and surrender to the “wants” significantly more than to the “needs” are hallmarks of the financially oppressed.
So how will you win the battle for financial freedom?
Generally in most battles, be it chess, game titles, life, or actual war; victory takes planning and implementation. In chess you might stop trying a knight to trap a queen… or in war, exercise a proper retreat in order to win the war. So it is also in this battle for financial freedom. For the majority of us to be successful in this endeavor, it will become essential to sacrifice some of our immediate wants and desires in order to reach the stated financial goal.
There are three major components to this battle:
The first is strategy… or developing a plan. Debt free (how to become), post debt free plan… You must responsibly manage everything you already have. Remember the big three: planning, dedication and discipline!
List all income and expenditures. Honestly determine what is necessary for the absolute essentials… commit that amount of your income to that particular use, and with what is left create a plan of attack for eliminating all credit debt.
Start by gathering and listing all credit debt… credit cards… department store accounts… any reoccurring monthly debt. Examine the accounts and list them based on interest rates. Choose one of the top interest rate accounts as the one to attack first. Make minimum payments on every one of the debts except the one you’ve chosen, then put all available funds toward eliminating that debt.
When the very first debt is eliminated, choose the following debt to eliminate and put all available funds until it too is eliminated. Continue this method and soon you eliminate all of your debts. It might seem slow in the beginning, but you can see the snowball effect that this may create… the final bills will soon be eliminated pretty quickly
A Very Real Caution
As you begin to eliminate your debt, don’t fall back to the trap that got you in this fix. That is, don’t think that since you do not have any debt you are able to head out and get that “whatever” you’ve been wanting. At this point you’ve only succeeded in winning the very first battle for financial independence. The war is now where over… STICK TO THE PLAN!
So, when all your credit debt is gone, the cash you were using to cover them is available nowadays for sensible investing… which can be part of the next step.
Hopefully, in accomplishing the elimination of your credit debt, and not succumbing to the temptation to pay, you’ve made the psychological changes essential to initiate the following phase… This change in attitude will enable one to truly succeed in the battle for financial freedom. Begin to construct wealth by doing two things… first by continuing to tap into your brand-new found discipline, spend less that you’ve arriving and make some low risk, long haul investments.