Financial Freedom 101: Small Habits for the Goal-Oriented Like You
Great things come in small packages, they say. This couldn’t be more true, especially when you apply it to your financial strategy. The little things you do now count a lot toward achieving a comfortable lifestyle without having to worry about how to pay for your utilities the following month, where to get funds in case a medical emergency arises, or whether you can afford a nice dinner with your family. That’s financial freedom.
Of course, every Filipino wants to liberate himself or herself from money problems. You’ve probably already set goals for yourself to reach a particular financial status. Just remember that goal-setting is only half of the work toward financial stability. The other half is about doing the right things that can positively impact your capacity to be free from money worries.
Here are some small habits that can help you turn your money goals into reality:
Set life goals.
As mentioned, goal setting is the first step of your journey toward financial freedom. Since the road to the finish line is quite long, you focus your goals on the various stages or milestones in your life.
The key is to make your goals more manageable by making them specific enough, with provisions for short-, medium-, and long-term goals.
As a general rule, short-term goals take one to two years to achieve, medium-term goals take two to five years, and long-term take five to 10 years.
Live below your means.
Not to sound preachy, but you shouldn’t wait for a financial crisis to hit you before you realize the value of living modestly right from the start.
Whether you’re a budding entrepreneur or an employee earning a substantial income, it pays to maintain a frugal attitude as if you were just starting out.
With the immense popularity of social media, there is pressure to live as everyone else does. That includes being seen at expensive restaurants or bars, traveling to exotic locations, and sporting trendy outfits. If you’re not strong-willed, you might find yourself overindulging more frequently than you can afford.
Try recreating Instagram-worthy pictures of your favorite dishes made at home for a much lower cost. Instead of staying at expensive hotels when you’re traveling, try couch-surfing or look for budget hotels. Limit your shopping to just the things you need instead of splurging during every sale event you come across.
Pay debts diligently.
Debts that accumulate could produce a horrible effect, like how a quicksand sucks in whatever comes into contact with it. In the same manner, debt has the potential to use up your resources if it piles up on you.
Be smart with your debts and the money you’re currently earning. If you have debts that you can’t get rid of immediately, at least be a good payer, making steady payments until you can fully settle them. This strategy is making you smart with your debts.
Avoid paying late fees.
As much as possible, you shouldn’t resort to delaying your utility bill payments. These bills come with surcharges on top of the principal amount when you miss out on your due date. If this happens in a cycle, the finance charges could reach a significant amount, too. That said, you should automatically set aside part of your budget to pay for your monthly bills.
Save little by little.
Saving money is one habit that produces direct, consistent results. Even if you put only a small amount into your piggy bank (or savings account) on a daily or weekly basis, you’ll see your savings grow in no time. You could then use it as a personal emergency fund, so you would have something to get you by in times of emergencies.
Out with the Bad, In with the Good
Habits can be good or bad, and it’s quite easy to distinguish which ones can help you have a worry-free financial life. When it comes to financial freedom, no habit is too small as long as you stick to it and align it with your goals.
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