Some people are pessimistic when talking about financial freedom. They think the state of being free financially will never happen since they spend most of their income on their needs. Financial freedom is 100% achievable when you take specific measures in your day-to-day financial practices.
However, you will have to go down a rocky road to get there, so it’s understandable if sometimes you feel like it’s impossible to achieve financial freedom. If something is holding you back, you may find the reason in the list below.
Keeping up with the Joneses’ habit
The grass is always greener on the other side of the fence. The saying is quite relevant when you are talking about ‘keeping up with the Joneses’ habit. When you buy something to impress someone or make yourself look more successful, you’re actually making the Joneses’ habit. You will never be satisfied if you are comparing yourself to others. Solely following the habit will cause you to overspend.
Success is never about having a shiny new car or vacationing in the Maldives. When you see your friends doing it, you don’t know about their financial situation. Envy or desire to own something you dream of is not always bad. Just make sure it’s your dream, not anyone else.
Failing to set financial goals
Taking a bus without knowing the desired destination is quite risky. The same happens when you save your money without setting a financial goal. Creating a financial goal will act as your compass for every financial action you take. You can save some money monthly from your income to achieve a certain amount on a particular date, whatever the reason is. This will make you do everything you can and dedicate yourself to it.
Discerning investment from gamble
Always calculate everything before investing in an asset! You cannot just put in some money and wish your asset grows without paying attention to the risks. Some investments may be tempting, but remember that there will always be high risks behind high returns. What looks too good to be true, probably is. Never take action on investment if you don’t know how it works.
Not knowing your cash flow
Some people may feel that money management is too complicated, and maybe you are one of them. However, understanding your cash flow is the only way to achieve financial freedom. It is an essential step to taking control of your finances. You can’t formulate a stable financial plan without mapping out and understanding your cash flow.
If you understand your money’s flow, you can naturally have better control over your expenses. Build a mindset that you must set aside extra cash by the end of the month. This money will be available for saving, paying a debt, travelling, investing, and so on.
Following ‘tips’ without verifying or validating them
Someone is telling you that if you jump in a river, then you will find gold. Yet, you can’t just jump in because you don’t know how deep it is and how bad the risk of being drifted is. The point is never to follow any tips without verifying or validating them. You might think the tips look good, but it doesn’t mean that it’s also good for you.
Not improving or updating financial knowledge or skills
Most of us were never taught how to get a mortgage or create a sustainable budget, but the finance world is dynamic and complex. That’s why we need to learn, either from trial and error or by seeking information on our own. Having a basis of financial knowledge and a clear understanding of your goals, you can choose the knowledge that would work for your situation.
Whether or not you are finding your holding back habit, you need to create a plan to achieve financial freedom for your future. Use the plan as a compass to gain a better future. You can break bad habits if you take a minute to change them. The big question is: do you want it?