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Getting real about financial freedom

Published Date: 2018-02-22 | Source: Simply Financial Services | Author: Simply

Getting real about financial freedom

Whether you need financial freedom to achieve your goals this year, or whether financial freedom itself is one of your goals, it might not be clear where to start. Perhaps it feels like you've tried it all before, and failed. But maybe your problem wasn't with the what, but with the why. Here we'll help you assess what has and hasn't been working for you, and guide you to take action. Here are the first 3 steps on your road to financial freedom:

1. Get real

The problem with most financial advice is that, well, it's so 'financial'. Where's the fun, the joy, the pleasure? Achieving financial freedom requires discipline and a calculator, but you are not a calculator. You are a human being, on this planet to live the life that has been given to you. Most budgets fail because budgeting feels like a killjoy process - nobody likes a plan that tells them all the things they can't do. So, when you create a budget, remember to leave space for stuff that makes you happy, otherwise you'll never stick to it. But also, be honest with yourself. What are the other reasons your financial plans have failed in the past? Why are you in more debt than you're happy with? What are the choices you've made (especially the ones that you seem to keep making) that have landed you where you are? And what drives those choices? The courage to really look at what makes you tick is the first authentic step towards financial freedom.

2. Get excited

You might get really turned on by seeing numbers in your bank account, but sooner or later you will need those numbers to turn into something meaningful to you. Understand what that is. Spend proper time identifying what you want from the next phase of your life, and dream big. Ask yourself, 'what would I do if money was not an issue?' and start there. Yes, some of those dreams may seem crazy, but more than likely they're not. "Most people overestimate what they can do in one year and underestimate what they can do in ten years", said Bill Gates - play the long game and anything is achievable, especially in saving and debt reduction, where you can leverage the power of compound interest. Make note of your dreams. Paste pictures on your wall. Start a pinterest board. However you do it, hold those dreams in mind - they will keep you focused and motivated.

3. Get the picture

Dreams and self-reflection are powerful, but they'll only get you so far. You need a plan, and every plan starts with an assessment. Where are things at right now? Begin by looking at your spending over the last 3 months. You could use tracking tools like 22seven, or you could just create a spreadsheet with categories of spending and the values of transactions. It won't take you long to find where you're bleeding cash. You won't always like what you see, so be brave and be honest. Spending R2 000 a month on double caramel chai lattes? Cool, you can change that, but not until you accept it. Without that intention, this will be a waste of time. Then, once you've mapped out your spending, be honest again. What do you really need to spend money on? For important fixed expenses like home loans and life insurance, can you shave some money off your premiums while getting the same, if not more, value? Is there anything you could sacrifice? If you were to give something up, what would you lose and what would you gain? Do you need support in giving something up? Where could you find it? This is tough stuff, so be kind to yourself - you're really showing up.

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