Three Good Habits

By Jo Phillips

Three Habits That Can Help You Achieve Financial Freedom

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Financial independence is a growing movement amongst younger families across the western world, and one which has spurred a vibrant online community where people share their plans, ideas and methods for creating a financially independent future. Financial independence is an umbrella term, but one which typically means early retirement, and living without the need for a full-time salary. There are many ways to approach this goal, and the basics are covered here – but it is important to note that financial independence is a long-term goal, and can take many years of preparation to make a reality.

Careful Budgeting

The core principles of financial independence involve the long-term generation of a sizeable nest egg, on which you can live comfortably without the need for additional income. In the shorter term, this can be achieved by maximising the amount of income you receive as a household. The very first step in managing your income with a view to financial independence will be creating a budget. This budget will factor in your income against your rent, utility bills, groceries and other associated living costs. With this data, you can start to make short-term financial decisions to maximise your available income – starting with the reduction in luxury expenses, and adoption of a frugal shopping policy.

Passive Income

The amount you can save on a month-to-month basis is finite unless you approach your financial freedom goal from another angle: the generation of additional income. This can be achieved by taking on extra work or finding higher-paying work in the same field, but those looking for long-term financial freedom might instead look to passive ways of earning. One method increasing in popularity is that of trading stocks, using retail trading platforms like mt4 web trader. Retail trading enables people to buy and sell stocks and shares, generating profits from price movements transacting at the right time.

Strict Saving Procedures

The single most important habit to form in the course of obtaining financial freedom is that of restraint. Budgeting and passive income streams can increase your net ‘disposable income’, making more money available to you each month – but poor control over that money can put you straight back to square one. Creating more money is only half of the equation; the other half is keeping it. As such, you should impose strict rules regarding savings, where any additional income is sequestered away into either a long-term savings account or an emergency fund – removing the temptation to splash out in the short term, and protecting your longer-term interests.

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