What does it mean to be financially free? Does it mean that you are no longer dependent on your weekly or monthly paycheck? Does it mean having the capacity to eat at an expensive restaurant just because you feel like dining there? Or does it mean the freedom to travel and enjoy the world?
It’s actually all that and more. Being financially free is allowing yourself to breathe and live free from the shackles of monetary constraints.
Budgeting for Financial Freedom
Most people interpret financial freedom as being rich. But being affluent does not even begin to capture the essence of the freedom that we are talking about. Financial freedom is being in control of your money, rather than it being in control of you. And being financially free does not require you to have tons of money in the bank; it just requires you to be competent and disciplined enough in budgeting whatever amount you have.
In this article, we discuss the items that should be in your budgeting sheet. Allotting money for each of them regularly not only allows you to afford what you need, it also gives you the freedom to reach for what you want.
Savings/Later-Time Expenses
Now, the amount to be saved for later-time expenditures should be on page 0. You must remove it first from the money pie, and partition what remains to the domains that we will discuss below.
Doing it this way ensures that your savings do not get neglected, which is a common mistake among young people.
Rent and Daily Expenses
Of course, at the top of every budget are your living expenses. More often than not, this line item takes the biggest slice of the pie. And rightfully so; without this, all other pursuits will be derailed. After all, we need to survive first before we can even have a shot at life. Under this line item are your expenses for rent, food, utilities, and other necessities.
Investments
Investing is something that you should never forego if you want to have financial freedom later on. Your smart investments will give you passive income, which is an amount of money that you receive regularly without really working hard for it. As they say, when you invest, you actually let the money do the dirty work for you.
Growth
If there is one person that you need to invest much of your resources in, it is yourself. You need to keep on improving so that opportunities keep on opening up on you. Take short courses. Work on your earning your graduate degree. Earn and spend some money to make you a better version of yourself professionally. This gives you the chance to increase what you earn.
Now, the expenses for growing yourself might need a little reinforcement from outside sources. Getting car title loans in Los Angeles or whichever city you are in is going to be a good way to increase your funds for this.
Leisure
Being too immersed in your work, while earning you a lot of money, might not be that beneficial in the long run. This can burn you out and even endanger your health. Truth be told, you also need to take enjoyable breaks sometimes, and you also need to allot money for this. You can go eat at your favorite restaurant. You can watch a movie with friends. You can even take a trip to a nice beach. Do anything that helps you rejuvenate.
Budgeting is going demand a lot of effort from you. In fact, it can even lead you to initially forego some of the things that you want. But regular budgeting will surely lead to better days, especially when monthly excesses in each line item accumulate.
