How to Be Financially Free: 12 Money Habits for Building Wealth


Of course, you could invest your savings in something foolish and lose it all, but the mistake there would not be in saving money—the mistake would be making a bad investment (also called speculating or gambling).

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How to Be Financially Free: 12 Money Habits for Building Wealth

How to Be Financially Free image

Despite what you may have heard, money is necessary for long-term happiness and survival (if you live in a society where money is used and you don’t grow your own food).

This is obviously true because you need money to buy food, and without consistent access to food you will suffer greatly and die early. That would make being happy pretty tough.

I want to help you learn how to better deal with money so you can earn it, save it, invest it, and use it more wisely to take better care of yourself, your loved ones, and to do good things in the world that are important to you.

What Does Financially Free Mean?

Being “financially free” can mean different things to different people. While this term is often used to describe people who don’t have to rely on a regular paycheck or work for someone else in order to survive, for you it might mean getting out of debt once and for all (which is already a huge step!).

To become completely and permanently free financially, your total non-employment income (which might come from investments, side hustles, a mix of both, or any other sources) exceeds your living expenses. You no longer have to work for a regular paycheck in order to maintain your lifestyle.

Game-Changing Financial Freedom Tips

1. Understand Where You’re At

You can’t achieve financial freedom without knowing your starting point. Looking at how much debt you have, how much savings you don’t have, and how much money you need can be a depressing reality. But this is a valuable step in the right direction.

Compile a list of all your debts: mortgage, student loans, car loan, credit cards, and any other debt you may have accumulated. Don’t forget to include any money you may have borrowed from friends or family members over the years.

If it’s a big number, don’t freak out, I promise I’ll share some ways to pay that down later in this article. If it’s a small number, congratulations! Feel free to share your financial freedom tips in the comments below.

Compile a list of all your savings: savings accounts, stocks, company stock-matching programs, company retirement-matching programs, and retirement plans. Then we’ll add the recurring monthly payments you receive such as salary, side hustle money, and so on.

2. Look at Money Positively

According to You Are a Badass at Making Money by Jen Sincero , people who don’t make a lot of money often feel shame when it comes to making money. And so the biggest obstacle that many people experience when it comes to making money is that they feel like having money is bad. Many feel guilty for having it and guiltier for wanting it. Sincero has said about money, “ We use it everyday to enhance our lives, yet we always seem to focus on the negative about it. ”

To experience financial freedom, you’re going to need to look at money as a tool to help you achieve your dreams, fuel your energy, and live a stress-free life you can enjoy.

3. Write Down Your Goals

Do you want to get rid of debt for good? Are you desperate to escape the 9-to-5 grind? Is there a place you’ve always wanted to travel to? Do you need to save for a wedding, kids, or retirement?

The Numbers Behind Achieving Financial Freedom

Let’s look at an example so you can see how the numbers might play out. Let’s say you want to know how to be financially free in 10 years or so. You would need to:

If you wanted to achieve financial independence in a shorter time frame, you’d need to save a higher percentage. For example, if you’re wondering how to be financially free in five years, you’d need to do the math. Here’s the basic formula:

You’d arrive at a savings rate of 83%. If you made $100,000/year, that would mean lowering your annual expenses to $17,000/year. Whether or not that’s possible depends on multiple factors like your willingness to cut expenses — even to the point of extreme frugality — your health insurance situation and cost of living in your area.

Take a Look in the Future of the Business

You see, doing something such as affiliate marketing will give you a great opportunity to create multiple sources of income in a short period of 3-5 years.

The niche would be your field of interest, something you can write about. For example, a personal development niche is my passion, so why not earn a passive income while helping others to become better.

If you provide helpful information to your visitors, maybe they will decide to contribute your efforts by clicking through your links and buying something from the merchant whose products you promote.

Become Free in 3-5 Years