What is financial freedom?
Financial freedom means control over your own finances. So, you will have enough residual income to live your expected life.
Finance experts have defined eight different levels of financial freedom. Let’s learn first.
Level 1 – Not living paycheck to paycheck. So you will have an emergency fund.
Level 2 – Have enough money to quit your job for a bit because your savings can support a long vacation or a gap in your career.
Level 3 – Financially happy and still saving. Because you are earning enough and doing things you love.
Level 4 – Have free time. You are no longer in a rat race to pay your interests and will be broke again.
Level 5 – You will have enough savings for retirement. So, you can adjust or downsize some living standards to get early retirement.
Level 6 – You will have enough to retire immediately because you have enough savings or a passive income stream to support retirement.
Level 7 – Have enough savings for a dream retirement. So, you can enjoy traveling the world or spend time with friends.
Level 8 – Have more money than you spend. Your wealth outlives you.
Now, you can decide your present status on these levels and make wise decisions to enhance your financial health because good financial health directly impacts your psychological and physical health.
Let me give a brief on those impacts.
Psychological Benefits of Financial Freedom
The rewards of achieving financial freedom are more than monetary benefits, and those are equally valuable psychological payoffs.
- Relief from daily anxieties.
- Room to dream beyond day-to-day life.
- It increases fulfillment.
- A reinforced sense of resilience.
- It leads to higher self-esteem.
How to Achieve Financial Freedom?
One has to cultivate some good habits to achieve financial freedom. Let me enlist those good habits here.
Set Life Goals:
You should specify the amount (how much should be in your bank account) and deadlines (what age) to achieve financial freedom—the more specific your goals, the more chances you have to achieve them early.
Make Monthly Budget:
Make a monthly budget to pay all bills and have desired savings. Make it regular and control your expenditures.
Payoff Credit Cards in Full:
Credit cards often charge higher interest rates. So, pay them in full to avoid paying it.
Create Automatic Savings:
Your money for emergency and retirement funds should be pulled out from your account automatically as soon as you get a paycheck.
Negotiating for goods and services can save you thousands of dollars each year. So, opt for good bargaining and get discounts, loyalty benefits, coupons, gift cards, etc., while purchasing.
Look for Personal Debt Counseling Services Edmonton
Debt is the biggest killer of your financial freedom. Credit720 is a destination for obtaining personal debt counseling services in Edmonton, Canada. Personal counseling will help you look into income and spending and suggest you take measures to get early financial freedom.
Look for Bankruptcy Service in Edmonton
When submerged deep into debt, Credit720 suggests you look for bankruptcy service in Edmonton, Canada. We provide complete guidance to avert everything gradually and regain good credit scores.