Many of us live in a cage. But this cage isn’t made of steel, it’s made of debt and financial stress.
The average UK household has over £7,000 in consumer debt. A rocky financial situation can go hand-in-hand with a wealth of mental health issues, from stress and depression to severe anxiety. To break out of that cage, you need to get your finances back on track.
The good news? Anyone can achieve financial freedom with some guidance.
Say goodbye to your money problems as we lay out the path to financial freedom.
A staggering number of people have no real grasp on their income and outgoings. This problem has only become more pronounced with the transition to cashless spending.
That’s why the first step on the path to achieving financial freedom is to understand the lay of the land. Sit down and go through your records with a fine-toothed comb.
How much do you really spend a month? How much do you earn? This will help you get a clear picture of where you’re going wrong — and what you can change.
The Little Things
Our finances gather clutter just like our homes. And just like our homes, they could use a good spring clean occasionally.
As you go through your expenses, take note of things you don’t need. Cut some of your “nice to have” expenses, particularly those that don’t bring you any joy or that you haven’t used in a while.
These individual savings may not seem huge. But when you add them together and multiply them by the number of months in a year, you’ll start to see what a difference they make.
Save Your Life
A common savings fallacy is that it’s an all or nothing game. The question is never “can you afford to save?”, it’s “what can you afford to save?”.
By setting savings goals, you can create realistic expectations for what you can save. That way, you never have to think about saving before you do it — you can just put your pre-determined amount away on a regular schedule.
This cuts our fallible human brains out of the process and makes saving automatic.
Debt: The Anti-Investment
When you’re feeling bullish about your finances for the first time in a long while, it can be tempting to look at the long term. And that’s great!
But new savers can get ahead of themselves. If you’ve managed to finally gather some cash, then get your debts settled before you think about long-term savings.
To see why, replace the word “debt” with “anti-investment”. That’s what debt is: money you don’t have becoming more money you don’t have. The exact opposite of investment.
Focus on bringing down your debt to reduce the losses you’re taking from interest. Otherwise, your debt could easily cancel out any attempt you make at long-term saving.
Walking the Path to Financial Freedom
The path to financial freedom isn’t always straight and you may need to stop and catch your breath, but taking a few steps every day will eventually see you to the end. Follow this guide to keep you on the right track.
Are you on the hunt for more professional freedom to match your finances? You could schedule a free consultation today.