Financial freedom is one of the dreams that everyone wants to achieve. When
you are financially free, of course you can buy whatever you need. In fact,
there is no need to doubt your lifestyle because everything can be fulfilled
with financial freedom.
To achieve financial freedom, you must be able to manage your finances
wisely, for example by saving, investing, working, doing business, and other
things that can generate enough money for future goals.
Definition of Financial Freedom
Today many young people or millennials may find it difficult to save. Some
choose to spend their money on a competitive lifestyle. Financial freedom
itself is a condition where you are free from financial burdens because your
assets or wealth are able to meet all your needs without having to work
harder.
Usually if you are already financially free, your assets can generate money
whose value is greater than your living expenses, you know. The point is
from a financial point of view you are safe. For example, your monthly
expenses are around Rp. 10 million and you are able to generate Rp. 30
million from your business assets or investments plus have income from a
salary of Rp. 15 million. If you do the calculations, your total per month
is IDR 35 million. There's still Rp. 25 million left. Well, an example like
this is called financial freedom.
Tips for Achieving Financial Freedom
Achieving financial freedom does require patience and you must be ready to
follow the process. You have to be good at managing finances. What are some
tips for achieving financial freedom?
1. Learn to Manage Finances
As mentioned above, you are indeed required to learn to manage finances.
Don't let your expenses outweigh your income. Especially if you have a
consumptive nature. You must be able to plan your financial budget wisely so
you know what to prioritize to buy and what not to buy. If there is
something that must be paid in installments. This is still included in your
budget, yes. The goal is to maintain a stable financial condition.
2. Understand Your Financial Condition
Achieving financial freedom does not have a condition how old you are. The
most important thing is how much you earn and you can manage it. Financial
freedom is also not measured by the value of your income. Whatever your
income, can it meet all your needs?
Determine your financial goals. Make sure that your income is greater than
your expenses.
3. What Are Your Financial Goals
Another thing that is no less important is knowing your financial goals.
Because in general, in managing finances, you need a strategy to achieve it.
For example in month A you can save 10% of your total expenses per month,
try next month if you can save more than 10%. Prepare your monthly budget
wisely. Don't spend money on things that you can put off.
4. Invest
To make your money work to make money, you can choose investments such as
mutual funds, gold, property, stocks, p2p lending, or bonds. If you want a
high return, choose stock investments. This is a blue chip stock
recommendation. Every investment instrument has its own risks.
5. Manage Credit Card Usage
The following tips are that you must be good at managing credit card use. If
it can be paid using debit or cash. Do not use a credit card with the
assumption that it can be paid in installments. Credit card dependence will
only lead you to debt that accumulates if it is not paid in full or with a
minimum payment.
6. Separate Savings and Emergency Funds
One of the important things in managing finances is that you have to
distinguish between savings and emergency funds. Emergency funds are
allocated for unexpected expenses. While savings are for long-term money
savings.
7. Financial Freedom needs Insurance
Financial freedom is not just having wealth assets in the form of money,
gold, property. You have to invest in insurance, be it life insurance,
health insurance, or other general insurance.
