How To Achieve Financial Freedom
We all want financial freedom. The ability to live life on your terms without worrying about money. Sounds nice, right?
Are you receiving enough income and building enough savings to support yourself and your family comfortably? Do you make financial choices that align with your values and goals? Maybe even have enough money to take a risk on a dream or treat yourself every once in a while?
At Blue, we’re focused on helping every single member achieve that. Financial freedom is a key part of living a rich and fulfilling life. But it’s not something that will happen on its own. Achieving financial freedom requires discipline, patience, and a willingness to make sacrifices in the short term for long-term gains. Developing three core healthy financial habits - budgeting, saving, and investing will help.
Budgeting
Budgeting may not sound fun, but it doesn’t have to be a dirty word, either. Budgeting is the foundation of financial freedom. At its core, it’s simply the act of keeping track of your income and expenses. Never done it before? Break it up into steps. The first step is to figure out how you’re spending. Many apps on the market can help you automatically begin tracking expenses, but an old-fashioned spreadsheet works too. You can break your spending down into categories like household expenses, transportation, groceries, entertainment, etc. Once you start tracking your expenses, you may realize that you’re spending more than you expected. If so, don’t worry! A budget can help you get back on track. With an idea of your regular spending habits, you can begin to identify trends and patterns and look for opportunities to cut down. Many times, simply tracking and reviewing expenses regularly can help you stay mindful of how miscellaneous expenses add up, saving you money without requiring a significant change in your lifestyle or behaviors!
Saving
Along with budgeting, saving is critical to building wealth and achieving financial freedom. It's important to set aside a portion of your income each month for emergencies, retirement, and other long-term goals. In fact, developing healthy savings is the only way to ensure you’re protected against unexpected (but often necessary) expenses. Initially, aim to trim your spending (or increase your earnings!), so you can reach a point where you have 3-5 months' worth of living expenses in a savings account. This helps you build a safety net and reduces the stress of unexpected expenses. Once you get those emergency savings under control, then it’s time for the fun stuff! Consider setting savings goals for things like vacations, or a new car, so you can make proactive decisions that get you closer to the goals you want to reach in the short (or intermediate) term.
Investing
Budgeting and saving will help you with your current circumstances, but to achieve financial freedom in the long-term game, you’ll need to prioritize investing, another critical piece of the financial puzzle. Investments allow you to grow your wealth and generate passive income over time so that your future self will be able to thrive. Putting your money to work in the stock market or real estate is a common way of investing and building wealth. Still, educating yourself on investment strategies and risk management is important to ensure you're making sound financial decisions. One quick investing hint. Look into your employer’s 401k or other retirement plans. This is especially true if your employer offers a match as part of their benefits. Many companies will match their employee’s contributions into their 401ks or other retirement accounts by up to a certain percentage. For example, if you put 3% of your paycheck into a 401k, your employer will add another 3% each pay period. If your employee offers a match, and you aren’t taking advantage of it, you’re leaving money on the table! Many 401k plans have easy-to-use platforms and offer resources and support to help you understand where you are in your retirement savings process and how you can further progress toward ensuring your future financial freedom.
Ultimately, financial freedom is about having the freedom to choose how you live your life. We may think that if we could get a job that pays better or win the lottery, we’ll be set. But it’s not that simple. No matter how much or how little money you make, maintaining financial freedom requires healthy financial habits. Luckily, with these habits, you might find that achieving financial independence is more attainable than expected! With a reasonable budgeting plan, healthy savings, and smart investing decisions, you can gain the financial security to pursue your passions and do the things you love without being held back by money. By developing healthy financial habits and staying focused on your long-term goals, you can achieve financial freedom and live life on your terms.
Are you interested in taking your first step to financial freedom? If so, we want to help you find the right path to reach your goals. Please set up an appointment at one of our convenient branches at https://www.bluefcu.com/locations. You can also meet our investment experts at https://www.bluefcu.com/plan/financial-advising, or by calling 1-800-368-9328, and we will begin to help you become the hero your story deserves.