Being financially free for me means being in total control of your money matters. For me it means you know how to earn and spend money, and make it work for you and not the other way around. Talking about financial freedom may seem complicated, if not frustrating. Many of us are confused about where to begin. Fortunately, I can summarize it to you in four, easy steps.
Build your emergency fund
First of all, you need to make sure that you are adequately protected when unfortunate events come. If you got struck with illness, disability, or worse, death in the family, you can tap into this pool of money to provide for your needs while you are yet to get back on your feet.
Save up for retirement
While making sure you have enough in your rainy day funds, it’s also important to safeguard your future. While retirement may seem like a faraway dream, it’s important to get started early rather than catch up later. If you haven’t heard of the power of compounding yet, it proves really effective when you reap the fruits of your early efforts.
Pay off your debts
You will have a hard time focusing on savings and investments if you have yet to pay off all your dues. Additionally, you wouldn’t want to face your retirement years still paying for remaining debts. Focus on this now and enjoy later.
If you have some extra money left after savings and debt repayment, you’d want to build your wealth more by making wise investments. Choose carefully and pick a nice mix of low risk and high risk investments for balanced results.