Posted On - 04-02-2019 admin Accounting
Financial independence, or as most of you may put it, the freedom to live life on our own terms, is what we often dream of achieving. While a majority may think financial independence means living your dream retirement, it can have several other implications depending upon what your priorities may be. You can link financial independence to anything ranging from living debt free, having a certain amount of savings, or the freedom to spend without worrying about tomorrow.
Attaining true financial freedom is not a day’s work, nor is it a destination to arrive at. It is rather a process that must go slow but steady. Every fiscal decision you make will either take you closer to or farther from attaining financial freedom. Whether you wish to spend the rest of your life on savings or your aim is to pay off all your debts to experience financial freedom, you need to frame out a path that helps you realize your goals.
Being the master of your monetary situation is not as easy to achieve as you may think. However, following a fixed track can help in many ways. Here are six tips that will help ensure a relaxing retirement and assured financial freedom for you:
Financial freedom means different things for different people. The ‘one-size-fits-all’ policy cannot be applied when it comes to personal finances. This is why individuals need to understand what their ideal financial situation is. Once you know what your monetary aims are, you can move on to the next step: i.e. determining how to achieve it.
Savings do not happen overnight. Unplanned expenses can show up any day of the year, so the key is to play smart. Start saving from Day 1 of your first job. If you are waking up late, do not panic. Open a savings bank account and set a target of how much you want in reserve, be it monthly, quarterly, or annually. This way, you will always have emergency money and savings ready for the rainy day.
Since you are aiming towards financial freedom, you will need to make some significant changes, mainly lifestyle. That does not necessarily mean cutting down on daily expenses. There is no point in giving up on important things to save more. But simple alterations such as moving to a cheaper locality, buying a less expensive car, taking smaller and fewer vacations, among other similar yet significant changes can help to save up more.
If you have a habit of spending everything, you might need to stop. You cannot plan your dream retirement if you have no idea how much of your paycheck you are going to spend. The best thing to do is to plan your expenses. If you are doubtful about your planning skills, seek help from your partner, friends, parents, or even a professional accountant. Budgeting means dividing your income into parts, such as day-to-day expenses, emergency funds, savings for vacation, travel expenses, and more of the kind. This ensures that you do no go overboard when it comes to spending.
Businesses need to be handled meticulously. There is a load of tasks to be handled simultaneously and with limited time at hand, business owners often have a hard time practicing control. The best thing to do is to automate wherever possible. Automatically make payments using your credit card, schedule everything important on your calendar, use a cloud-hosted business management application, such as QuickBooks hosting, to save time.
The first step in creating a suitable budget plan is to seek help from an advisor. Your budget plan will solely depend upon your chosen retirement lifestyle, for example, some of you may be planning to travel the world with your partner once they retire, whereas a few others may have chosen a quiet country life. Therefore, your retirement expenses will depend on how you choose to spend your life once you attain financial freedom.
Why proactive? Because, you as you age, you move closer to your retirement. If you postpone your retirement savings, you might have to work for long hours when you are older. Although it may be a tedious task to plan your retirement, it is still beneficial to start early (as already mentioned). Another reason why being proactive is the right thing to do is- compound interest. Most people prefer to keep their unused money in banks because it earns you interest. It doesn’t hurt to earn money on saved money, does it?
Being smart doesn’t always imply that you know everything about anything. Sometimes, accepting oblivion is synonymous to being smart. So, when you know you are clueless about how to manage finances, seek professional help. A reliable professional accountant can take you through your journey to financial freedom by placing out achievable goals, ensuring you do not deviate from your path, and helping you survive the hiccups of market ups and downs.
Many of you must have already embarked on your journey to financial freedom. And those of you who haven’t, the tips mentioned above can help give you a head start. Keep a thorough check on your current financial situation to give yourself a future that is not only secured but lets you live life like a boss.