Financial freedom usually means having enough savings, financial investments, and cash on hand to afford the kind of life we desire for ourselves and our families. ... Financial freedom means our money is working for us rather than the other way around.
Financial freedom means that you get to make life decisions without being overly stressed about the financial impact because you are prepared. You control your finances instead of being controlled by them.
Financial independence is the status of having enough income to pay one's living expenses for the rest of one's life without having to be employed or dependent on others. ... Income earned without having to work a job is commonly referred to as passive income.
Overall, there are some basic thumb rules to achieve financial freedom:
Financial freedom can help you take ownership of your finances and, more importantly, your life. It's about living within your means, being a bit frugal, and making sure that money is spent on things you really need like food, shelter, and yup even vacations (relaxation is important too, you know).
A common rule of thumb is to maintain an emergency fund equal to 3 to 6 months' expenses. So, if you spend $3,000 per month, you'd want to have an emergency fund of $9,000 – $18,000. This should be enough to let you weather a significant financial catastrophe, such as an injury or losing your job.
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Financial Independence is Important Because Job Security is an Illusion. ... Many entrepreneurs work ridiculous hours, risk their entire life savings, and neglect important relationships for a dream with no promise of success.
With the 30 day savings rule, you defer all non-essential purchases and impulse buys for 30 days. Instead of spending your money on something you might not need, you're going to take 30 days to think about it. At the end of this 30 day period, if you still want to make that purchase, feel free to go for it.
Although the choices and sacrifices are often hard, the first steps to financial freedom are simple: honestly assess your financial situation, create a budget and eliminate non-essential expenses or find more cost-effective alternatives.
Follow these strategies for taking control of your finances right now.
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