- You can achieve financial freedom by making good decisions and developing healthy financial habits.
- Secure a reliable source of income and learn to live within your means.
- Create a workable budget and pay off your debt.
- Build an emergency fund and start saving for retirement.
Financial freedom definition: Financial freedom may mean different things for different people, but most people would agree that it covers three basic things.
- The freedom to not have to trade our time for money. As the only absolutely finite resource we possess, time is more valuable than any financial gain.
- The ability to make healthy life decisions while not stressing about their financial consequences.
- Controlling our finances instead of allowing finances to control us.
If you are struggling to pay off debt, financial freedom may seem like a goal that is too far for you to reach. But you are only a few good financial decisions away from gaining your financial freedom, no matter how much debt you currently have.
How do you achieve financial freedom? What steps do you need to take right now, and what habits do you have to develop in the future?
- Find One or More Reliable Sources of Income
Secure gainful employment in addition to other income streams you might be able to develop. You cannot achieve financial freedom without adequate income.
Evaluate your current income. Are you making enough money to make ends meet, with a bit extra that could be used to pay down debt? If not, think about some ways to increase your income.
Is it possible to increase your wages at your current job by taking on some extra shifts or developing new skills that will make you a more valuable employee? Would you be better off looking for a better-paying job elsewhere? What about a side gig? Do you have marketable skills that you could turn into another source of income?
- Live within Your Means
If you earn more than you spend, you will be able to save money and use it to make your way to financial freedom.
To live within your means, follow these basic steps:
- Never purchase anything just to compete with someone else. “Keeping up with the Joneses” is a useless waste of time, energy, and money.
- Avoid taking on any unnecessary debt. Think carefully before you use your credit card.
- Track income and expenses to see where you can make smart adjustments.
- Resist the urge to constantly upgrade your standard of living. If you are comfortable as you are, do all you can to minimize lifestyle inflation.
- Create a Budget
A budget can tell you where your money goes. It can also alert you to leaks in your spending you may not have identified otherwise.
Your budget allows you to plan and organize the flow of your finances, assuming control over them. Be realistic as you work on your budget to ensure your plan is one that you can follow long-term.
- Build an Emergency Fund
By saving up six months’ worth of expenses in an emergency fund, you will be able to handle a financial crisis without resorting to credit.
Emergencies happen all the time, but with the safety cushion of your emergency fund, you will be able to handle them without going into debt again.
- Debt Resolution – Get Out of Debt and Stay Out of It
Make a list of your debts and brainstorm some ways to reduce them. For credit card debt, in particular, look at the interest rates you are paying and determine which cards to pay off first. You can use the snowball method or the avalanche method to handle paying off your credit cards on your own.
Debt settlement may be the answer for you. Through debt settlement, your creditor forgives some of your debt, allowing you to save money and get out of debt for less. Contact ClearOne at 866-481-1597 to learn whether debt settlement is the right solution for you and to get a free savings estimate today.
The information provided is for informational purposes only and is not intended to provide financial advice. ClearOne Advantage does not provide financial or legal advice. Please consult a certified financial advisor for individual financial needs.