It can be difficult to restrain yourself from spending too much with all of the temptations and distractions around you. Marketing campaigns can convince you that you need something you really don’t and before you know it, you have credit card debt, no savings and financial freedom is just an idea that you are unable to reach. Instead of spending and taking on more debt, take on better habits to reach financial freedom in a hurry!
10 Habits to Reach Financial Freedom in a Hurry!
This post has been written by Brenda Berg, a professional with over 15 years of experience in business management, marketing and entrepreneurship. She’s also a consultant and tutor for college students and entrepreneurs. Her belief is that constant learning is the only way to success. Want to learn more? Check her out at her personal blog – Letsgoandlearn.com.
1) Withdraw the cash before you go shopping
This may seem like it’s just an inconvenience. It’s a modern world and rarely anyone goes shopping with cash now. However, the modern world won’t help you reduce what you spend.
You see, with a credit card or any other kind of payment, you feel like you can purchase anything you want, even if you don’t need it. But, when you have a limited amount of cash and you restrain yourself from reaching for a card, you’ll only buy essentials and carefully calculate what you can afford.
It’s hard to only stop at the most important products once you’re in a store full of goods – it is designed to tempt you. Withdrawing money first can’t make it less tempting but it can help you restrain yourself from going overboard.
2) Set your own goals
There are plenty of websites, blogs and financial experts telling you what you need to do in order to be financially free, but it’s not easy to follow their rules. This is why you should set your own. Understand what you can and can’t do, what your monthly budget is, and what you essentially want to achieve. Then set goals and rules for yourself.
Write them down if you need to, do whatever helps. You may want to pay off your debt or have a carefree retirement – set those goals and work towards them.
3) Spend on things that really matter
How many times have you bought something that you don’t really use or need? If the answer is too many, then this tip is for you.
It’s easy to get lost in all of those marketing efforts that tell you that you need something. But the truth is, you don’t. If you really want to save money, you can (for instance)…
- cook at home instead of going to a restaurant,
- you can clean with a regular vacuum cleaner without all the bells and whistles, and
- you can do just fine with a working smartphone from a year ago, you don’t need a new one.
Think about what really matters and spend money only on those things – food, bills, rent, etc. of course, there are going to be occasional moments when spending on something that’s not essential is necessary – in these situations, spend only the minimum amount that you can.
4) Manage your finances
If you learn how to keep track of your finances, you’ll be well on your way to financial independence. Spending when there is no one to watch over you is dangerous. You can easily lose a lot of money on unimportant things. But, if you create a budget book with a clear schedule and available expenses and write down each expense, you’ll have a better way of controlling yourself.
Read some of the online articles on managing your finances, creating budget books etc. to fully understand the benefits and rules of learning how to properly manage your money.
5) Find ways to earn some extra cash
If you want to have some extra money to spend on something or you want to put it into savings, a good idea might be that you find a second job or turn your hobby into a business. You may have a talent for writing, designing or drawing, or you may just be a skilled transcriber or a marketing advisor. All of these things can be successfully monetized by joining, for example, freelancing platforms like Upwork and UK Writings.
If you know how to make something, you can sell it on e-commerce platforms like Shopify or Etsy, or you can tutor people on various tutoring platforms. Utilize whatever knowledge or skill you have to earn some more money and instantly improve your finances.
6) Automate your payments
You are already aware that you should pay your bills on time. However, you can get distracted at times and forget to pay them — it happens. This is where automation comes in. Set it so it covers all of your bills, savings payments and any other kind of payments you make on a regular basis.
This is not only more convenient, but it also plays a significant psychological role. The money will be paid and you won’t have an option of spending it on something else. It will also make your life less stressful.
7) Pay off your credit card
Having debt on your credit card is easily preventable. If you can’t pay for what you want to buy right away, don’t buy it. It’s that simple and not that hard. But credit cards should be used only in emergencies and not for shopping sprees.
If you already have credit card debt, pay it off as soon as possible and restrain yourself from using it until you really need it. Don’t cause yourself stress by having an extra debt to think about.
8) Understand what triggers you to spend more
People tend to spend more when they are emotional. If you can, try to stay away from your payment options and stores that can make you want to spend. Find other ways to deal with your emotions – talk to a friend, relax, talk to a therapist, do whatever it takes to understand your emotions instead of buying them away and losing money.
9) Learn to reward yourself
Just as you should be careful about your spending, there is no harm in rewarding yourself once in a while. This will take the pressure off and satiate your spending needs.
10) Save money
Set a specific goal for your savings – you could be saving for your retirement, vacation or anything else you may need. Open a savings account and put money in there on a monthly basis. If you happen to get any extra money, a good idea would be to put it into your savings account instead of spending it right away.
However, don’t set too many goals for yourself and put a strain on your finances. Research on the effects of number of goals says that having fewer goals can help you save more.
The road to financial independence is a rocky one, but it certainly brings many benefits to the table. If you learn to manage your finances properly and restrain yourself from spending unnecessarily, you’ll achieve this in no time.
It helps to think about your future and what your life will be like if you start being careful about what you spend and save right away. Before you begin, set clear goals and understand your spending habits. These tips will certainly help you get on the road to financial independence.
Are you ready to take on these habits to reach financial freedom?
My name is Derek, and I have my Bachelors Degree in Finance from Grand Valley State University. After graduation, I was not able to find a job that fully utilized my degree, but I still had a passion for Finance! So, I decided to focus my passion in the stock market. I studied Cash Flows, Balance Sheets, and Income Statements, put some money into the market and saw a good return on my investment. As satisfying as this was, I still felt that something was missing. I have a passion for Finance, but I also have a passion for people. If you have a willingness to learn, I will continue to teach.