If you’re like a vast majority of modern human beings, you have some distinct financial goals you’d like to reach, preferably sooner rather than later. Some people dream of defeating a mountain of credit card debt, paying off their mortgage early, saving a hefty emergency fund, or generally having the financial security to worry about money less. Ultimately, though, most of these goals can be boiled down to one tangible aim: financial freedom. Your hopes for this financial plan, though, depend upon a few particular efforts.
Understand your goal.
First and foremost, it’s crucial that you know exactly what it is you’re hoping to achieve if only so you can reverse-engineer that endpoint and determine the steps you’ll need to take to get there. Begin to understand a basic financial freedom meaning, if that’s your ultimate goal, and figure out how you can apply the formal definition to your own life. Unlike financial security or financial independence (though these may be worthy milestones on your way to this final ideal), financial freedom means your passive income can not only cover your current lifestyle but can also fully fund your ideal life.
Set yourself up for success.
Whether your dream is financial freedom, paid-off student loans, or an overflowing bank account, there are some steps you can generally take to move in that direction from early on. For instance, a young adult might consult a college admission guidance counselor to determine whether a particular school or program will make them enough money to reach their future goals and achieve this peace of mind. An older adult might go back to school to get on the right track or rethink how much money they’re making to ensure they have a generous buffer supporting them as they move forward.
Know your starting point.
The first step to living your ideal financial life is to understand the financial position you’re starting in—your current financial situation. This clarity can help you understand how to improve your finances and move toward this idea of financial freedom. It might hurt to confront the fact that you’re living paycheck-to-paycheck, have a concerning credit score, or don’t have enough savings to cover an unexpected expense, but no matter what amount of money you’re starting with (or lacking altogether), acknowledging these restrictions can help you see what you must change to achieve true financial freedom.
Create new income streams.
In order to reach this sense of financial freedom, you must have passive income coming in—after all, how can your passive income keep you afloat if you aren’t making money through passive means in the first place? Every individual will turn to different passive income streams, but some common options include affiliate marketing, digital course creation, e-commerce, and more. This important step can be more complex in some circumstances than it will be in others, but ultimately, the passive income streams you create early on will determine how quickly you achieve the most crucial aspects of financial freedom if you’re able to achieve it at all.
For many people in the United States and beyond, financial freedom is an essential goal that means they’ll no longer have to yearn for payday. Along the way, the extra cash you earn from passive income opportunities can help ensure you have ways to make your money work for you, not the other way around. Paired with other small steps in this direction, you’ll inevitably reach these markers of financial freedom and achieve your ultimate financial goal. At each of the financial mileposts you reach along the way, take time to review your goals and your financial game plan, and ensure you’re on the right track.