How can you achieve financial freedom with even a small salary? This is the question we will try to tackle in this article. While a high paying job or inheritance say from your parents can make you one of the top earners in the society, simple money habits, is what makes the difference between a life of prosperity and one of constant financial stress. There are simple adjustments that you can make in your life which can lead to building wealth & hence financial freedom and prosperity. Lets look at them below:
Monitor what is coming in and What is going out
Most people don’t track their income and spending, and this makes it difficulty for them to decide how much they can devote to their goals for example savings. So before you embark on your plans to save, track your income and expenses, then make a decision how much you want to devote to your savings, or how much expenses you can cut down in order to have some money for your savings. Remember saving money is one of the key ways to wealth creation.
Have multiple income streams
You can increase your earnings by doing a part-time job, a side hustle or looking for investment opportunities. These are all aimed at creating additional income to supplement what you already have.
Change your Mindset
Building wealth requires that you change your mindset on how things are commonly done by most people for example most people spend money, before they save what is left and in most cases, they end spending everything and nothing is left for savings. Instead, you should save first for your financial goals, before your pay for your bills. These are simple mindset changes that can bring profound turnaround to your personal finances.
Start Preparing for your Retirement now
Whether your are in your twenties or thirties, don’t assume that retirement is too far away. Start putting a side some money into your retirement account. This is also advantageous since you will definitely benefit from the power of compounding interest. The earlier you start the better.
Have a Plan of where you want to Go
Put in place a short-term or long-term plan depending on what you want to accomplish. You can have a five-year plan to building wealth, where you create specific money goals you would like to achieve within five years and how you intend to achieve them.
Examples of goals may include:
- Saving for your house
- Saving for your child’s school fees
- Saving six months income for an emergency fund
When we have a specific goal in the mind, it inspires us to save.
Live Below Your means
Do more saving than spending, in fact most people achieve financial freedom become wealthy by working hard, saving diligently and living below their means.
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Achieving financial freedom, and thus wealth requires a change in your mindset. If you take an audit of how you’ve been handling your money in the past, you may realize that there maybe areas that requires improvements or a complete shift. Take a minute and ask yourself, are your current money practices helping to shape your future in a positive way? If your answer to this question is a yes, then don’t worry but keep making improvements, if it is a no, then it is time to start putting your finances in order by implementing some of the simple tips mentioned in this article.