When it comes to talking about managing your finances, a popular term that often gets thrown around is “financial freedom”. But what exactly does this mean?
In general, those who refer to financial freedom might be talking about things like getting out of debt, setting aside money to reach financial goals, or building a cash flow that affords them the type of lifestyle that they desire. And while these are certainly financial benchmarks worth aspiring to, trying to achieve any one of these ideals without a solid plan in place can end in frustration and failure.
So, what are some of the steps that you can take to pursue financial freedom? Consider the following:
1. Clarify Your Desired Financial State
While the concept of financial freedom might not look the same to you as it does to your co-worker, sibling, or friend, it’s important to define exactly what it is that’ll help you to feel more in control of your financial situation. Then, you want to put a plan in place to pursue that goal.
For example, if your goal is to get out of debt and set aside a nest egg for yourself and your spouse, you will want to take steps to both pay off your debts AND build sustainable savings for future use. Often, you’ll be working toward multiple financial benchmarks that, when combined, represent financial freedom for yourself or your family.
2. Evaluate Your Lifestyle
Your lifestyle factors play into your financial health in more ways that you might think. While things like your credit score and spending habits are obviously influential, other aspects of your lifestyle, like your physical health and outlook on life, can have a big impact.
Ideally, you want to take stock of how your day-to-day activities, from your morning mocha to your weekend plans, make a difference in your spending habits and savings goals. You can take simple steps to save money on a daily basis, which can give you funds to pay back debt or save with.
Other steps, like making a dramatic lifestyle change to eat better and exercise daily for a healthier future, can take time and commitment, but may impact your financial plans by limiting the amount of money you anticipate to spend on health expenses into retirement. Even seemingly unrelated lifestyle adjustments can make a huge difference to your long-term plans.
3. Look into Your Investment Options
Since savings is often a component of working toward financial freedom, it’s essential to consider your savings options for addressing short- and long-term goals. For many individuals, an investment strategy is a solid way to work toward these goals.
A benefit of early investing is that you have the opportunity to capitalize on greater returns over time. The longer you wait for investment strategies to develop, the more they can work toward your long-term savings goals. And while early investing is ideal, if you’re coming into the financial planning game a little later, it’s never too late to start taking steps in the right direction.
4. Work with a Financial Advisor
Of course, there’s plenty that you can’t predict when it comes to managing your financial goals and investment activities, which is why it’s essential to work with a financial professional who can help you to connect the dots between your desired financial state and the actions that’ll help you get there. A qualified financial advisor can equip you to evaluate what financial freedom means for your situation specifically, while taking your lifestyle factors and long-term goals into consideration.
Are you ready to work toward financial freedom for your family? Contact Jacob Sturgill today to learn more about how our personalized financial planning services can make a difference for your financial future!