Do you know what you want to do with your life, but it’s money that always seems to get in the way? Whether you dream of being able to travel more in your spare time or have a burning desire to change careers, perhaps even studying as an adult, you might find yourself unable to act because of a lack of financial freedom. In this blog, I’m going to share my tips for how to get financial freedom. If you’re able to work through them and build a stable financial life, you’ll take a step closer to your dreams. Let’s get started!
Why it’s important to build financial freedom
As I mentioned in the introduction to this blog, whether we like it or not, money can influence our lives. Being in debt or facing unexpected costs is stressful. But life doesn’t need to be like this. A lot of our feelings and attitudes towards money are shaped when we’re very young. You might have heard that ‘money doesn’t grow on trees’ or that a neighbour enjoying their wealth was ‘flashy’. Firstly, I want you to understand that you can reverse this situation and take control of money. Instead of being afraid of money or feeling negatively towards it, it’s possible to love money. To love checking your bank accounts and be excited about doing your invoicing! The most important step on the ladder to that is to learn how to get financial freedom.
But what is financial freedom?
Financial freedom is totally personal to you. For some people, it’s the ability to live your desired life without relying on a traditional job, perhaps living off savings and investments. For others, it’s overcoming debt and building up savings. For others it might be knowing that you’re bringing in enough money to live your life, travel and see the world, and have a little left over. In every case, it means having control over your finances and the choices you make around money!
How to get you version of financial freedom
Just like everyone’s financial situation is unique to them, so is the path to financial freedom. However, in this section I’ll aim to share some ‘everyone’ steps for how to get financial freedom. If after reading this, you’d like to take a deeper dive then I can create a bespoke financial freedom programme. In my decades as a financial expert and coach I’ve helped so many business owners find their financial freedom. It’s some of the most rewarding work I do and will change your life, so why not chat to me?
If you’re not quite ready for coaching but would like to start working towards financial freedom, I can help. Here are five steps to try, and see how you get on:
1. Learn how to budget
You need to know what money you have coming in and your outgoings, including occasional costs like MOTs and annual subscriptions. Open an Excel spreadsheet and note down everything in two columns – money in, and money out. Budget for tax and NI if you’re self-employed or a limited company, so you have that money set aside for when it’s time to pay HMRC. Total up the two and if your outgoings are higher than your earnings, you know something has to change. That might mean cancelling subscriptions, shopping around for new energy suppliers to reduce costs or taking more drastic action. You can also take steps to boost the ‘money in’ column – asking for a pay rise, putting up your prices, having a flash sale or pitching for new work.
2. Address your debt
Some debt is unavoidable for most people, such as getting a mortgage to buy a house. But lots of credit card, loan and ‘buy now, pay later’ debt isn’t going to help you achieve financial freedom. With the interest and charges, you’re just making someone else rich! Check what the APR rate is on all the debt you have and focus on paying off the highest first. Annual percentage rate (APR) is the total yearly cost of borrowing money, including any additional fees or costs associated with the loan. If you can (check that budget to see!), then make sure you’re paying off more than the minimum payment instead of buying treats. Focus on how good it feels to clear debt rather than the quick rush of buying a new top or jeans!
3. Set money goals!
Based on the above – your money in and out and any boosting debt repayments you can – set yourself some financial goals. How quickly can you get rid of debt? Split it up if you’re facing lots of liability and find a way to celebrate paying off each debt stream. If you don’t have debt but you’ve been living pay day to pay day, make a real effort to start saving. First, aim to build up a buffer in your current account that can cover your bills for one month. When you’ve done that, start working towards a three-months emergency fund, and then even six months.
4. Plan for bigger purchases and costs
If you know your car had lots of advisories after last year’s MOT, start putting some money aside for this year. You might avoid paying your garage bill on a credit card and racking up more debt… If your smartphone, computer or other key business equipment is on its last legs, can you save up and buy a new one without going on a payment plan? The same goes for car insurance and similar costs. It’s often cheaper to pay the full annual cost rather than the ‘per month’ version.
5. Uncover and banish your limiting beliefs around money
Your reaction to those first four steps might be very telling. If you feel overwhelmed and scared, you probably need to work on some limiting beliefs. Or maybe your reaction is ‘no one in my family ever has enough money’ or ‘I don’t deserve wealth’. If so, you need to work on your money mindset! If you feel ‘up for the challenge’ and ready to dive into your finances, chances are you’re already harbouring a better money mindset. I can help you uncover and banish limiting beliefs, either in a one to one or group setting.
This advice really is ‘tip of the iceberg’ stuff, and it’s possible to take a much deeper dive. I really can’t express how important it is to take control of your financial destiny. Learning how to get financial freedom and taking action will kick start so many amazing changes. Just chat to me if you’d like to learn more!