Good habits for financial freedom

Everyone wants financial freedom to retire early. But most folks have no idea how to do so. The habits I am going to tell you in this article are simple, although they might be tough to implement.

Financial freedom occurs when you’ve saved enough money or assets to support your current spending habits for the rest of your life without the need to earn more money.

You might choose to work for some purpose, passion but you no longer need a job to live your life with your chosen lifestyle.

Let us see some good habits to achieve Financial freedom  

Spend less than your income

This is a basic rule. As Warren Buffet said, "Do not save what is left after spending, but spend what is left after saving."

To get rich you must spend less than what you earn. Saving should not be limited to some percentages mentioned by some financial advisors on TV, newspapers.

To get Rich you need to save at extreme levels. 

Some typical measures -

• Reduce your use of vehicles. Walk or take the bus. If you must have a car, buy a car with good fuel efficiency. Also, buy a car of the size you need, you don't have to buy a luxurious big sedan. Buy with cash or a low-interest rate loan if available. So if you are not in a financial position to buy a car, Don't Buy. You don't have to show off. No one is going to pay your bills for you.
• Eat out less. Don't order food from outside even if it is more convenient nowadays. The offers, cashback is a Big lie.
• Choose a home in an area with a low cost of living. Buy a house/ flat with a low-interest rate home loan from the government bank if possible. You can choose even a resale one. You don't have to go for a new one always. Resale houses have their own benefits. 
• Repay the home loans as quickly as possible. The First 5 years are crucial to reducing the burden of the interest rate. So any windfall, bonus, a lottery will go directly to reduce such loan.
• Don't be afraid to rent. If it is not possible to buy a house/flat. Spend no more than 25% of your income on housing – less is better.
• Give a day when you are thinking to buy any big thing. That day will reduce your urge to buy unnecessary things/liabilities. Be sensible and wise while purchasing anything.
• Get a good bargain for buying any service or products.
• Think again while buying expensive watches, shoes, bags, jewelry, clothes, etc. Spend on the things that matter most to you.

Write your daily expenses

Keep a record of your expenses. This will get you to realize about your expenses, and you can control them.

Grow your income

It's great to reduce expenses and develop good habits, but there's limit to savings you can do. But there is no limit to earning more money.

• Your job is the most important source of income. Treat it like that. Learn new skills which are required in your job or industry, Get certifications, Always give more than asked, Negotiate your salary with your boss, Connect with your colleagues, and actively manage your career path.
• Sell unwanted old stuff if it has value.
• Start a side hustle. Make money from your hobby, passion. Do freelancing to match your skills. Unleash your creativity.
• Don't do anything for free. Your every minute counts.

Don't waste time

Older people always said that " Time is money". Don't waste your precious time. All successful rich people worked hard from every 24 hours they got. Some people work more than 80 hours a week. Use your time wisely. 

• You don't have to work every time, just don't waste it.
• Learn new skills, do studies for certifications in your job field.
• Use your time for a side hustle.
• Go and meet new friends, build connections.
• Work on your hobbies which will reduce your stress maybe & may generate income for you.

Set goals

Setting SMART Financial Goals is important in our life. If we have to invest or save money, it should be linked with our goals. If we have to be successful and rich, we need to plan our path towards those goals. Financial goals should be planned with the inflation rate's impact on saving/investment.

Goals can be,

• To achieve financial freedom before 50 and work towards the retirement corpus needed for that.
• To save money for my daughter's wedding after 20 years.
• To buy a house after 6 years.
• To save money for a child's higher education which will be required after 15 years.

Invest Wisely

Invest your hard-earned money into smart investments. 

• Take advantage of the employer (Employee Provident Fund) and government-sponsored retirement plans (such as the National Pension Scheme) first. 
• Don't get fancy. Start investing regularly with SIPs in diversified mutual funds. Ignore the news and their anchors. Ignore market fluctuations. Ignore everybody. Keep investing during good times and bad. You can even start from a smaller amount as much as Rs.500. Increase your investment by minimum 10% every year.
• Track growth of your investment. Conduct an annual review. How much you spent and what are your investment's worth now? 
• Talk with a financial planner or advisor. He will advise you according to your actual case. Get your risk profiling done. Get your investment aligned with your financial goals. 
• Open Demat account with low maintenance and transaction cost. Invest in stocks. Study those companies before buying their stocks. Check their balance sheet, annual report, ratios, net income, debt, liabilities. Don't invest with some tips.
• Buy commodities like gold, silver in their pure forms as an investment.

Read

Read financial education articles, books, newspapers. Watch financial news channels, get yourself updated with current trends. Try to read one good financial book a month.

Enjoy Life

Getting financial freedom is not that difficult. With these habits and tips, you will be able to do so. Don't get stressed out, starting push is important. Balance your life, be simple. Don't forget to enjoy your life with little things that matter. Spend time with family. Talk with parents. Drinking a cup of tea/coffee on the balcony with family feels more delightful than going to a fancy restaurant. Give time to your hobbies, read some good novel.

Begin your journey to financial freedom. If you are reading this, you already have made the first step. Don't get distracted, we will keep you motivated towards your journey. subscribe to our newsletter to get posted with new articles.