Financial freedom

For someone who's currently buried nose-deep in debt, the prospect of climbing out of a financial pit may seem impossible. Everything, especially the future, may seem so bleak and depressing that they give up the possibility of ever being financially free or at least financially burden-less.

If you want to make a change, the first thing you need to do is to stop thinking this way. Whenever you find yourself thinking negative thoughts, change your actions and change your thoughts. This change can often be accomplished by doing something else to take your mind off of whatever negative thing it is that you're doing or thinking about.

Having financial freedom can be defined as a state whereby one no longer has to worry about income and expenditure. Being financially free means that one can afford MOST things one's heart desires without it becoming a burden later on, like debt. You can no longer count on an employer or even the government to pave the path to the future for you. If you want to be financially free, the only person who can help you do this is to do it yourself. You must sit down and get serious about making your own financial plans.

Usually, the first thing you would have to deal with is a sound spending plan. You spend only within what you are capable of spending, nothing more. Not a cent more. Write down everything you think you may have to spend on in any given month. For instance, you'll want to include things like rent, food, clothing, education, phone, utilities, traveling, debt obligation, medical, gifts and even alimony (if any). Everything thing you EXPECT to spend on should be recorded neatly. Compare this against your income. It's incredibly important that your spending does not exceed your income. This may seem elementary, but this so true. A great rule of thumb to follow is if you can't afford it - don't buy it!

Next up - savings. Anyone without savings is without a future. As cruel and heartless as that sounds, it's true. Imagine, if you saved up $1 a day, you'd have $30 sitting in your account at the end of the month. If you saved up for 3 months, you'd have $90 as backup. We're not even looking into the interest you will earn yet. It can work out to be quite a big sum of money if you sit down and nitpick at the details.

If you stick to your spending plan and continue saving some money every month, you'll then evaluate your own level of risk tolerance. How much risk are you willing to take with your money? Different people have different level of risk tolerance so, don't compare yourself to your friends, brother-in-law or cousins. Compare yourself to you. How much loss can you tolerate?

From here on, you're essentially on your own. Whether you decide to start your own business, get involved in network marketing, freelance, continue being employed, invest in stocks and bonds, share market, hire a professional financial manager to keep a tab on your money...whatever, the risk is yours to take.

There's no fixed path to financial freedom, therefore, everyone have to design his or her own journey. Whatever it is that you decide to do, you must remember to save for your future and keep to your own spending limit.