The Secret to Financial Freedom!
On behalf of our American neighbours, who celebrate independence day each year, we thought we’d share the no.1 secret to financial freedom – the ultimate independence we all crave.
The route to becoming financially free
Many people look for the quickest and easiest route to financial freedom, others look for a quick gain (I spoke about this in another blog titled: Can you trade yourself out of debt?) but the cold hard facts are the only sure way of achieving financial freedom is taking ownership of your spending.
You could be a millionaire and still not achieve financial freedom.
If your spending is more than your income, and/or you’re not holding yourself accountable for the money choices you make, you will always be reliant on others for money and always several steps away from financial freedom.
An example of not being accountable is when you tell yourself that your partner, boss, clients, kids, neighbours, family, colleagues and even the cute girl/ guy in the supermarket, are to blame for that impulse buy or the pick me up you so badly needed at the end of the month/ week/ day. Or maybe it was the pressure from colleagues, friends or family to split the bill when you went out for dinner, or for even going out for dinner in the first place! Or your employer not giving you a salary rise/ clients grumbling about your prices. Or the pressure in having to buy a new car, new outfit, new home…
I know all of these are real and the pressure to fit in is harder than ever, but how long will you let others determine what your finances should like? How long before you put your finances first, take a deep breath and say ‘sorry, no, I can’t afford that. I’m saving for x…’
Financial freedom is nothing to do with the amount you have, its how well you manage it
A colleague of mine, a long time ago, declared that no matter what she earned she would always be skint the last week of the month before payday, and she was right. Nothing changes with your finances until your behaviour does.
To take yourself closer to the financial freedom you have always dreamed of, also consider:
If employed, sign up to your employer’s workplace pension scheme
If you run your own limited company, get yourself enrolled in the workplace pension scheme
Put 10% of your net earnings (after tax & pension contributions) in a savings account
Pay all your bills (or put the money aside for bills later in the month) before spending your earnings on non-bills
Pay off your credit card each month in full
Divide the rest of your earnings (after bills have been paid) into the number of weeks you have until the next guaranteed payday then budget accordingly.
If you would like help on budgeting and the emotions that come up when feeling restricted with money or the pressure of having to fit in, come along to our mindfulness workshop. Details can be found on our Events page.
By Helen Monaghan
Accountant, Coach, and Author
© HM Finance Coaching Ltd