4 Simple Steps Towards Financial Freedom
Financial Freedom should be a goal in life but, our society turned it almost into a taboo that should not be discussed or asked about it. We are here to change that and teach you how to ative financial freedom.
How often do you think and talk about money?
In the US and many other parts of the world, we are told from a young age that financial discussion should be private.
In a culture inundated with financial secrecy, we’ve learned that money isn’t exactly a topic that should be freely discussed in public with our peers.
Unfortunately, that led us to forget about one important person to have this discussion with: ourselves.
So, let’s talk about money.
Making it, saving it, keeping it… Are you in control of your spendings? Do you have a budget? Is this all obvious to you ?
Unfortunately, it’s not to everyone. Statistics reflecting the current state of Americans’ personal finances are startlingly rough. According to a CNNMoney article, 40% of Americans are unable to cover a $400 emergency expense should something happen to them.
Yet another CNBC article reveals that 69% percent of Americans report having less than $1,000 in their savings accounts. To make matters worse, 39% reported having no savings at all!
To put things in perspective, that means that:
- Most Americans are unable to replace a broken laptop or iPhone,
- and cannot cover a serious trip to the emergency room that isn’t covered by insurance.
Now let’s pause for a moment. Do you contribute to these statistics?
Well, we’ve got you covered, we want you to have financial freedom
Not with complicated financial jargon, or links to financial products no one understands, or a speech from your parents asking you to be more responsible.
Nope. Just 4 simple and fun habits you can start today that will plant some serious roots towards financial freedom.
1. Set goals and start small
A great way to start saving and moving towards financial freedom is to set goals and being aware of your spendings.
For example, you could start by saying:
I’ve noticed that in the past, I’ve spent over $1,200 per month excluding my rent. Can I challenge myself to stay under $1,000 this month and put those extra $200 in my savings account?
The beauty of this is that by having a simple target in mind, you’re more likely to pay attention to what you are spending, and keep track of where you’re at during the month. That’s how you can tune it down when you’re close to your goal.
Another way of doing this is setting an automatic transfer of a designated amount, or percentage of each paycheck into a savings account. It could be as little as $10, $50 a month — whatever makes sense to you.
That way, you’re building up your savings without thinking about it too much.
2. Make it fun!
Finances don’t have to be a chore; there are lots of ways you can make saving money a fun part of your daily routine.
- Create incentives for yourself to save by small rewards along the way as you continue to set and meet your financial goals.
If you’re working towards saving money for your Spring Break trip to Cabo, reward yourself with activities that don’t require spending, such as an evening with snacks and Netflix or a hot bath!
- Challenge a friend to set a personal finance goal with you!
You can catch up over brunch next Sunday to discuss new tips, what you found challenging, and keep yourselves accountable.
3. Be aware of your spending
With the ease of payment methods today (swipe a card here, touch your phone there), it isn’t difficult to become oblivious to small purchases that accumulate over time.
There are numerous behavioral psychology studies that demonstrate how the human mind is better equipped to reconcile the spending of physical money as opposed to quick and mindless electronic transactions.
So, keep a note in your phone for the small electronic purchases you make, whether it be a latte, clothes at the mall, or popcorn at the movies.
Little spendings add up, and keeping track of them will help you spot which ones you’re spending much more money on than you thought.
Yes, I’m looking at you, “had to have” new shirt.
4. Open your own emergency savings fund
You’ve had your eyes on an expensive purchase for months, whether it be a vacation to Hawaii or tickets to your favorite music festival.
You’ve set a date for when you’d have this amount of money and have finally accumulated enough cash through discipline, planning, and strategizing.
However, out of nowhere, your Macbook dies and you have no choice but to fork out the cash and replace the device.
NO. GOOD BYE HAWAII.
Wait a second. It doesn’t have to be that way.
You can create an emergency savings fund!
That’s just a saving account that you’ll fill using the tips above, and never use until you really need it. There are some things we have no control about, and life is unpredictable.
So get yourself covered now for Macbook breakdowns, but also health issues that might come out of no where.
So there you have it! While money isn’t everything, it plays a large role in dictating your daily life and future. It’s not about what you make, but what you keep.
And it doesn’t have to be an unspoken subject, nor a cumbersome process. Start small, be aware of your spendings and put some savings aside, you will thank your future self for it.
How Flourish can help with building financial freedom?
Flourish is paving the road to your financial freedom with fun and rewards.
We are creating a fun and engaging app that enables you to play games, win rewards, build up your savings habits and learn useful tips on how to better manage your finances.