How to Navigate Your Path to Financial Freedom

Financial freedom will help you to take ownership of your finances and, more importantly, your life

How to Navigate Your Path to Financial Freedom
How to Navigate Your Path to Financial Freedom
Akshay Mehrotra - 13 August 2021

Financial freedom must be a goal for many people. It generally means having enough savings, investments, and cash on hand so that one can afford a better lifestyle for themselves and their family. But increasing debt, medical emergencies, wasteful expenditure, or other issues become thwarted in reaching financial goals. To be financially independent, one should start maximising the investment with proper planning and rationalising the expenditure.

Let’s explore the five very important ways that can help you navigate your path to financial freedom:

Pen Down Your Goals: Financial goal is achieving a big vision you have for your life and you can achieve it when you have financial capacity to make them happen. Having a capacity means creating a roadmap of things that you have to achieve in your life. The more specific your goals, the higher the likelihood of achieving them.

Start Fixed Deposit: For saving money, you can create a separate account and start sending a particular amount of money from your monthly income as savings. You can also enroll yourself in an employer's retirement plan and make full use of any matching contribution benefits. It will be helpful for an emergency fund, which can be used for unexpected expenses.

Watch Your Credit Scores: It is essential to have a healthy credit score and building one can often be challenging for people already in debt. Using personal loans to build a credit score might sound a bit counter-intuitive, but it is one of the best ways to improve your credit history. A good credit score will help buy a new car and refinance a home. It is very important to keep your eye on credit reports on a regular interval so that there are no black marks that can ruin your good name.

Create an Emergency Fund or Backup Fund: Considering the current scenario, most of us have money woes. There is an urgent need for us to take a hard relook at our financial health. Rising uncertainties, job losses, pay cuts, health worries and other reasons have left us worried about our future. That's why it is important to have 3-6 months’ worth of living expenses as an emergency fund.

Buy Now and Pay at Your Convenience: Ultimately, things that help you live a more fulfilled life will be the experience you have from your challenges, and for a good experience, you must be more patient and consistent. Or you can get a good experience with new financial innovations like Buy Now Pay Later, which offers simple ways to pay for online purchases in multiple installments. It is rapidly increasing and becoming the fastest-growing payment instrument globally.

Financial freedom will help you to take ownership of your finances and, more importantly, your life.

The author is Co-founder and CEO of EarlySalary

DISCLAIMER: Views expressed are the author's own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.

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