Top habits that will help you achieve financial freedom

Published: December 8, 2021 at 7:00 am

While most of us talk about living in the moment or focusing on happiness instead of money, financial freedom is a mandatory goal. It ensures that we have enough in times of need, and we can go without slogging to survive for some years of life. Financial freedom is mostly about saving enough to sustain a lifestyle that you fancy. It also refers to retiring from work to enjoy or switch careers without worrying about finances. In this article, author and content writer Smriti Tuteja discusses some habits to help us achieve financial freedom.

About the author: Smriti is an author, freelance content writer and avid reader. She quit her six-year-long IT career to embrace her love for writing. Her article – How much money can I make as a content writer – went viral. She writes content across genres and takes pride in her ability to research and carve magic with words. Over her six years of content writing experience, she has developed a knack for technical and digital marketing content.

She also passionately writes about parenting and is currently working on her book. When not writing or reading, she can be seen running behind her two kids or learning Deutsch. Reader’s may recall Smritis is the lead author of this popular book published via freefincal: How to profit from content writing.

Other articles by Smriti:

It sounds simple but remains a dream for many people who cannot achieve it. What is it that stops people from reaching their goals? Debts and sudden expenses are straightforward answers, but failing to meet financial goals is often ignored. These include unplanned and frivolous spending, lack of a futuristic goal, overestimating spending limits, etc.


Almost everyone comes across financial troubles and must figure out ways to sail through. However, many of us are still unaware of the right way to achieve financial freedom. At 30, I have already been through planning and re-planning. As I move towards my goals, here are the top ways to help one achieve financial freedom.

Know your goals: Financial freedom can mean different things to different people. For some, it may mean an early retirement, a big house for some others, and the latest bike and iPhone for someone else. Figuring out the goals and segregating them based on when you want to achieve them can help you develop a rational action plan. If your goals are early retirement or a good retirement corpus, you can begin by enlisting your expenses and sources of income. Setting milestones is a good idea to track your progress. Writing it down, maintaining records, and being specific about goals is the second most effective way to achieve your goals. The first most effective is winning a lottery.

Set a budget: This isn’t a new tip, and still,l most of us fail at just this step. Setting a monthly or weekly budget and sticking to it ensures that you spend only within your limits and spend what you intend to. Going overboard will only divert you from your goals. In this materialism-driven world, it is easy to lose track. Periodic budgeting and checking if you are moving towards fulfilling your goals will help you stay cushioned against your impulses.

Reassess your credit card spending habits: Online forums are full of people arguing about the merits of credit cards and the reward points system. Whatever benefits that credit cards may offer, they are ultimately debt traps. The whole idea behind them is to create an illusion of a higher spending allowance. They are counterproductive to wealth creation. If you have used your card for an unavoidable expense, try and pay the dues in full every month. This will prevent the interest from accumulating. It will also improve your credit score.

Commit to some savings: Automatic recurring deposit debits, auto transfer to an alternate account, increasing the contribution in the employer’s retirement plans, etc.. are some ways to create an emergency fund. This is just money that you set aside and not an investment. You can use it whenever there is an unforeseen expense. Whether these deductions are feasible or not is for you to decide based on incomes and mandatory expenses such as EMIs.

Jump into the investment bandwagon as soon as possible: We read and hear about the magic of compounding all the time. It refers to growing your money by making strategic investments. There is no right age to start investing. You can begin as soon as you start earning with a meagre amount that can increase as your income increases.

Remember, emergencies don’t see age or how long you have been in the workforce. With early investing and financial discipline, you can start moving towards financial freedom. 

Do not hesitate to bargain: While memes and jokes have convinced us that bargaining is cheap, negotiations can go a long way to help you save money. As a consumer, it is your right to ask for a better price. Many businesses offer bulk buying or regular customer discounts. Do not assume that a certain business wouldn’t honour a request for negotiation. I have negotiated the school fees too and saved as much as INR 50k on admission fees. 

 

Stay up to date by reading: Staying in touch with financial news is a good way to maximize your investment income. Read about the developments in the space to know if you need to make any changes to your strategy. It can also help you avoid unscrupulous agents who are always ready to take advantage of people who seem not to know much.

Maintain your assets: Maintenance doesn’t need to stay limited to big things like houses and cars. It is good to maintain even the smallest things like clothes and shoes to help them last longer. The savings from this step may seem insignificant but add up pretty fast.

Maintain your health: Your body is your most valuable asset. It will help you earn and grow as long as you are fit. It is good to invest in regular diagnostic tests and fitness programs to ensure that the daily grind doesn’t take its toll on you. Do not hesitate to spend on a healthy diet and exercise. It will also help you stay clear of emergency medical expenses.

Adopt a minimalistic approach to living: It may seem like a fad of the modern world to talk about minimalism when our ancestors had been doing that for years. However, the increase in disposable income and the rise of capitalism and consumerism have created numerous money outlets for families. Knowing the difference between needs and wants can help save a lot of money.

There is no magic key to financial freedom. Little changes can make saving a habit, and adding investment knowledge to the equation will help you grow well and reach your goals.

All the best!

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About The Author

Pattabiraman editor freefincalDr M. Pattabiraman(PhD) is the founder, managing editor and primary author of freefincal. He is an associate professor at the Indian Institute of Technology, Madras. He has over nine years of experience publishing news analysis, research and financial product development. Connect with him via Twitter or Linkedin or YouTube. Pattabiraman has co-authored three print books: (1) You can be rich too with goal-based investing (CNBC TV18) for DIY investors. (2) Gamechanger for young earners. (3) Chinchu Gets a Superpower! for kids. He has also written seven other free e-books on various money management topics. He is a patron and co-founder of “Fee-only India,” an organisation to promote unbiased, commission-free investment advice.
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Most investor problems can be traced to a lack of informed decision making. We have all made bad decisions and money mistakes when we started earning and spent years undoing these mistakes. Why should our children go through the same pain? What is this book about? As parents, if we had to groom one ability in our children that is key not only to money management and investing but for any aspect of life, what would it be? My answer: Sound Decision Making. So in this book, we meet Chinchu, who is about to turn 10. What he wants for his birthday and how his parent’s plan for it and teach him several key ideas of decision making and money management is the narrative. What readers say!
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