Hoping to Achieve Financial Freedom? These are 10 Habits You Should Have to Help You

Achieving financial freedom is a goal that many of us desire, but some might believe is too far away to reach. It’s a daunting task, especially when bills pile up, cost of living increases, and we bury ourselves in debt. Because life happens, it’s hard to see past all the financial obligations that we find ourselves entrapped. But it’s never too late to change your habits so you can put yourself in a better financial position and perhaps even achieve some level of financial freedom.

Here are 10 habits that can help you get on the right track.

1. Create, Keep, & Stick to a Budget– A budget is an important foundation for creating good spending habits and for giving you an overview of your finances and what is available to spend and save. There are different budget apps that you can get on your phone, or you can start as simple as writing everything down in a notebook or spreadsheet. However you decide to create your budget, getting on the right track starts here.
2. Keep Spending in Check- One of the most effective ways to make an immediate impact on your financial situation, is to keep your spending in check. This doesn’t mean, don’t buy things ever. Instead, it means keeping track of your expenses versus your income and ensuring you are not overspending.  Cut out unnecessary expenses, and you’ll find that your wallet and bank account might look a little bit more robust.
3. Pay off Debt- Once you have spending in check and have shaved off most of your unnecessary expenses, you can use that extra income to put toward paying off your debt. Keeping debt around longer is more expensive because of the interest that will accrue. The faster you pay off debt, the more money you will save and be able to put toward savings.
4. Keep Track of Credit Score- Sometimes debt is unavoidable. And in situations where you must take out a loan (i.e. for a car or other large, necessary expense), having the lowest rate possible is always preferable. Knowing what type of interest rate, you may qualify for is not guaranteed, but you can help your chances of getting approved at a better rate by making sure to keep your credit score high. Monitoring your credit score and understanding what can affect its movement up or down can help helpful in keeping your score in a more favorable position.
5. Take Care of Your Stuff- It may sound silly, but maintaining and taking care of your personal property can help you save money. By keeping up on maintenance for your home and appliances, you can avoid larger more costly repairs.
6. Build Up Your Savings/Create an Emergency Fund- Sometimes, however, costly repairs and unexpected situations happen regardless of how many preventive measures you take. For this reason, it’s also helpful to have an emergency fund. The extra funds that you have because you have paid off your debt and/or because you have lessened your expenses can be put into savings or an emergency fund. By having funds to handle these types of situations, you can avoid taking out loans or using your credit cards to pay for these emergencies.
7. Contribute More Toward Retirement- Many employers offer some form of retirement plan for their employees. If your job does, it’s a good idea to participate. Not only does this allow you to put away funds toward your retirement, but some plans also offer features that allow employers to match your contributions which will help boost your retirement account. If you don’t have an employer who offers 401(k) or pension plans, there are other options out there to set money aside for retirement. Seek out a financial professional to discuss what those options may be.
8. Make Periodic Financial Goals- Even though the long-term goal may be financial freedom, or some level of financial freedom, it’s important to create smaller goals that you can reach throughout your journey. Even small yearly goals that can be reached, does wonders for both motivation and morale. For instance, you can say, “I’m going to make sure to save and extra $100 each paycheck this year.” At the end of the year, if you’ve accomplished your goal not only will you be richer for it, but you’ll be able to prove to yourself that you are able to set and reach your financial goals. Creating a good financial goal is like creating a good health/fitness goal. You start small, and then ramp up as you accomplish each goal.
9. Educate Yourself- Sometimes, people are unable to make smart financial decisions because they just don’t have the resources or the understanding to make those decisions. Finacial illiteracy is a real thing, and taking the time to educate yourself financially is important to making sound financial decisions.
10. Seek a Financial Professional/Discuss Your Goals with Your Current Financial Professional- In addition to educating yourself and doing your own research, it’s important to also seek out the professionals. Finding yourself a financial advisor can be a significant resource for you in your journey to reaching your goals. And if you already have a financial advisor, then it’s important to reach out to them to discuss your goals and objectives as well as update them periodically when they change. Having a support system in place that can help you navigate your options and make recommendations will help you make informed financial decisions.

Remember, financial freedom doesn’t happen overnight, and it may not even happen in a few years. But with some true effort, and careful choices you might be able to dramatically improve your current financial situation.