6 habits to help you achieve financial freedom

Financial independence can be described as the state of having sufficient personal wealth to live, without having to work actively for basic necessities. For financially independent people, their assets generate income that allows them to live comfortably according to their own standards.

For some of us financial freedom could mean being mortgage free and having to work part-time, for others it might mean living mortgage free in their 5-bedroom dream home while travelling the world. What's important is to understand what financial freedom means to you, and what you need to do to achieve it. Here are 6 habits to help you get started.

  1. If you fail to plan, you plan to fail – It is important to know what your financial goals are and how you plan to get there. Otherwise, how would you know if you are going in the right direction?
  2. Be frugal – Have a budget and stick to it. Spend your money on things that are really worth it. Make sure you pay yourself first by automating your savings and investments.
  3. Practice positive thinking - Any big financial goal takes time, so you shouldn't expect immediate results, nor give up when you experience setbacks. Revise your plan and move forward.
  4. Get started on KiwiSaver today – Even by delaying your membership for a few months you could miss out on thousands of retirement dollars. If you are already in KiwiSaver, make sure you are in the correct fund for your circumstances.
  5. Sort out your dumb debt - It is called dumb debt for a reason – this is when you are paying a very high interest rate. It is especially dumb if you are paying it on depreciating value items. Some of the most common high interest rate debts are credit cards, hire purchase and personal loans.
  6. Perform regular check-ups - You should never fully remove yourself from the money management process. Spending habits change, income fluctuates and bills have the tendency to increase without notice, so it's important to get into the routine of doing a monthly money check-up.
Image courtesy of ratch0013 / Freedigitalphotos.net


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