Financial Freedom - Just Ahead; Start by Practicing these Five, Simple Steps in 2018by Rinku Mishra Writer
Financial Freedom – Isn’t that the ultimate goal for which all of us are toiling? But are you doing the right things which ensure that you are on track to achieving this? Ask yourself the following questions-
• Having your monies lying idle in a bank account?
• Only making last-minute investments every year to cut down on taxes?
• Taking your investment advice from colleagues or a random Facebook article?
• Investing in an insurance plan just because you couldn’t say no to a friend who’s an insurance agent?
If you answer “Yes” to any of these questions, it’s high time that you take control of your finances.
Careless and ill-advised decisions can leave you entirely clueless about where your money goes, and how it’s performing (or rather underperforming). This presents a significant risk to you achieving even the simplest of financial goals.
Here in this article, you can
find a list of five simple ways to head closer to Financial Freedom in 2018.
#1: Define your financial goals
Do you want to own that “big house”? Retire early? Head on a luxurious, world cruise? Ensure that your kids have an excellent education?
Before you start budgeting, planning and investing, you should begin by defining your financial goals. Your goals are your milestones and your financial plan is the roadmap for your financial journey. Why? Because unless you know where you want to go, you cannot plan for it. Set both long-term and short-term goals. Write them down. Share it with your partner and get them onboard.
#2: Create a Budget
While this may sound boring, it’s a critical element on your journey to achieve financial independence. Start by tracking your expenses. This includes something as low as 100 rupees to your big spends. Use an expense tracker app to simplify the process.
Once you’re aware of your expenses v/s total earnings every month, it becomes easy to create a budget.
Are you in a deficit? Do you have enough money to save? Finding the answer to these questions will help you define a budget and cut down on unnecessary expenses.
#3: Build your emergency Fund
Life throws unpleasant surprises your way, when you least expect it. Accidents, unexpected hospitalisation, loss of job, natural calamities and other emergencies can wreck your finances if you aren’t prepared for it.
Your investments become the emergency fund is something you can dip into during such unplanned eventualities. This ensures that your financial goals don’t go awry due to unforeseen events.
#4: Insure yourself and family members
Insurance is the best way to protect yourself from life’s unpleasant surprises. It is a must if you want to achieve total financial independence. Knowing that your family is protected should a catastrophe occur, is a big safety net and gives you immense peace of mind.
Apart from life insurance, having health insurance protects you from the ever-mounting cost of hospitalization, should you ever need one.
#5: Start Investing, if you haven’t already started
Investing is different from saving. When you invest your money, you put it to work, helping you earn higher monetary gains over the years. However, remember that all investments are subject to risks. If an investment is advertised as high returns and risk-free, please be careful to ensure that you arent getting duped. On the other hand, totally risk-free investments may offer you enough returns.
You need to balance risk and reward when choosing your investment vehicles. The smart move here is to ensure that you strike the right balance between the two, evaluate the risk of every investment product and choose one that suits your risk profile and reward expectation.
Achieving financial security and freedom isn’t possible overnight. It’s a long journey. What matters is that you get started as early as possible, stay focused on your financial goals with the help of a financial planner, and remain committed to it.
Take a vow to get started on your journey to financial security, independence, and freedom in 2018.
Created on Feb 19th 2018 00:30. Viewed 350 times.