The sense of financial freedom relates to the psychology of money management, and it has a lot to do with your mental attitude that influences the way you treat money. Financial freedom does not rid you of your responsibilities related to managing finances, but it creates a comfort level that enables you to enjoy life in a stress-free manner. The trick to achieving that peace of mind is to maintain a balance between earning and spending. If you spend more than you make, soon enough, you will acquire a ton of debt, which is the least desirable thing. Unless you are able to save a certain amount from your earnings at the end of the month, you are doing it wrong!
Once you successfully strike a balance between earning and spending, you will have the strength to direct your money to the right places so that you are able to enjoy its value in full. This will result in leading a life without having to worry about the financial responsibilities that you shoulder because you have the plan and resources to fulfill it.
Amassing wealth does not set you free
There is a wide-spread misconception that unless you have immense wealth, you can never enjoy financial freedom. This is entirely wrong because no amount of money can meet your financing needs unless you are mentally prepared to create boundaries for it. If you analyze what freedom really signifies when it comes to your finances, you will find that it actually means that you do not become a slave of your financial responsibilities and obligations.
You have to create a situation, where only discharging your responsibilities brings you some sort of relief. This is only possible when you have the ability to maneuver your money in the way you want. Doing it successfully can lead to a situation where you are able to save money even after meeting your obligations. By sticking to this principle, you will be able to achieve the financial freedom that you are striving for.
The road to financial independence
Generating wealth is just one end of the spectrum, while many other elements contribute to it. To reach the destination, you have to pass through several milestones that will drive you in the right direction.
• Set the priorities of your life by taking into consideration the flow of funds and requirements at various times in life. This will determine the quality of life that you are capable of leading based on your finances.
• You have to start living within your means so that you never have to turn to debts. This means that you need to exercise self-discipline and develop a lifestyle that allows you to live without seeking extra money.
• Maintain discipline in taking financial decisions and never allow your heart to rule the head. Keep emotions in check and do not hesitate to take tough decisions even if it means making changes to your lifestyle. Think judiciously about spending so that you do not regret later.
• Knowing that no amount of wealth is sufficient to ensure financial freedom, be smart in managing your wealth so that there is a perfect balance between what you want and what you can afford.
• Lastly, perceive the freedom as a state of mind. Have the right attitude in fiscal matters to achieve it.
Make saving a habit
The average American believes in spending. Spending and never caring about saving anything leads to severe financial damages. It is only due to this that credit card business is the most lucrative in the US. Mindless spending creates big holes in your finances and does not allow you to think about saving. This results in living beyond your means and losing the control of finances. Once you lose your grip on money, there is no way that you can work your way towards financial freedom. Rather, you will be too busy replenishing funds as the demand keeps on spiraling.
Unless you concentrate on saving something, you should never dare to dream about achieving financial independence. If financial independence is your goal, set your priorities accordingly so that there is room for saving. The better you are able to balance your spending and saving, the higher are your chances of succeeding in freeing yourself from financial bondage.
We all experience situations in life when we spend without reason because our emotions overtake our ability to think logically. Most of us are inclined to instant gratification and driven off our feet to buy something instantly that might not be necessary at all. It turns out to be unnecessary spending, as we are unable to control our emotions that can cause harm to finances. Keep away from impulsive decisions when it comes to spending. Take well thought out decisions about spending to ascertain the returns from it. Think twice before buying, and if you are in doubt, push back the purchase so that you can re-think. It often happens that you change your mind on second thought and avoid bad spending. Train your mind to figure out the wants from the needs so that you do not indulge in unwanted expenditure.
Take good control of your money
When you take a vow to achieve financial freedom, be smart enough to manage your resources well. Whenever you feel uncomfortable with your financial situation, it is a sign that you are losing control of it. Better control ensures that you are well aware of the available funds, and at the same time, you know your financial obligations as well as the ways to meet them without having to put additional stress on your finances. As part of efficient money management, you have to keep an eye on where the money is spent and periodically evaluate the results to know which way you are moving. The decisions that you take in the future will depend on the results, and when done rightly, it will drive you towards meeting your financial and life goals.
When you are able to achieve these, you feel comfortable that you know how to make the best use of money, while meeting your financial obligations with a smile. This is what you must aim at throughout your life!