Financial freedom is a goal of many. Although its core definition is “having savings and cash on hand to enjoy the lifestyle we desire — according to Investopedia — it’s important to have your own definition of what it means to you. It could mean saving enough to pay all your debts off or quitting your current 9-5 job to work remotely and start your own business. Whatever it may be, keep your definition in mind and set goals to achieve it.

Even though financial freedom sounds like a good theory — the truth is anyone can achieve it. By setting goals and having a strategic plan, it might not be so daunting after all. Here’s what all of us can start doing.

Understand Where You're At

To get to where you want to be, you first have to know where you’re currently at. For starters, you can compile a list of all your debts student loans, car loans, credit cards, etc. Once you have a list of that, calculate how much you would need to pay back all these debts. At first, it can be discouraging — it is normal to feel this way.

However, this brings us to the next point: compiling all your income and savings.

Do the same as you did for your debt list: money from your investments, savings account, side gigs, income. Once you calculate how much savings you have, you can start allocating them to repay your debts.

Write Down Your Goals

All of your efforts will go to waste if you don’t keep track of your spending. By practising this step, you’ll soon recognize your spending habits. This information will help you to adjust your budget accordingly. What are the things you should spend less on; coffee, brunch, clothes? Are you paying your bills fully on time? Are you overspending in certain areas of your budget?

If you’re someone who is always on the go, there are financial apps like Mint and Good Budget that will allow you to track your spendings whenever and wherever you are. However, if you prefer the old school way, then you might want to keep receipts to track back at home. Ultimately you need to find what works for you as long as you’re following through with your goals.

Track, Track, Track Your Spending

All of your efforts will go to waste if you don’t keep track of your spending. By practising this step, you’ll soon recognize your spending habits. This information will help you to adjust your budget accordingly. What are the things you should spend less on; coffee, brunch, clothes? Are you paying your bills fully on time? Are you overspending in certain areas of your budget?

If you’re someone who is always on the go, there are financial apps like Mint and Good Budget that will allow you to track your spendings whenever and wherever you are. However, if you prefer the old school way, then you might want to keep receipts to track back at home. Ultimately you need to find what works for you as long as you’re following through with your goals.

Spend Within Your Needs

“Money looks better in the bank than on your feet” – Sophia Amoruso (Founder of Nasty Gal)

According to an article by Oberlo, Warren Buffett bought a 5 bedroom apartment for $31,500 in 1958 and has never left. His net worth? An astounding $67.7 billion (in 2020). Meanwhile, on the other hand, Kanye West boasts about his $20 million house — all while he was still in $53 million debt. The key takeaway from this story? Warren chose to spend carefully and frugally on what he needed. Mindful spending also allows you to put more money aside to achieve your financial freedom.

Consider What Means Most to You

Life is short! Achieving financial freedom doesn’t necessarily mean hoarding all your savings forever. With good financial management, you should still be able to spend on things that mean the most to you. Consider spending on experiences instead of material goods to help you live a more satisfying, fulfilled life. If there’s an art class you’ve always wanted to take, or a destination you’ve wanted to visit with your friends and family, put that down as one of your goals and set out to achieve it.

Though achieving financial freedom may seem a little far away when you’re just starting, always remember that it is the good habits you build today that will help you achieve your goals. Take the first step towards your financial freedom, today!