Stages of Financial Freedom

Stages of Financial Freedom

The journey towards financial freedom is gradual. It starts slowly until you achieve abundance. Achieving financial abundance is the ultimate goal for everyone. Unfortunately, only a few people can achieve this form of abundance. The trick is to know how to plan your finances strategically.

With proper planning, it is possible to take charge of your finances and avoid the anxiety that comes with being in debt. Whether we admit it or not, money is a cause of stress for many people, and it is always a good idea to keep your finances in order. Here are the stages of financial freedom:

Financial Dependency

financial freedomFinancial dependency is the stage when your bills are taken care of by someone else. This can happen in childhood because at this stage; you are not able to work to pay your bills.

It can also happen when you are an adult, but at this stage, your debt payments exceed the income. If you cannot meet all your basics and you have to take debt, then you are still at the financial dependency stage. The good news is that there is hope even for people at this stage.

Financial Solvency

This is the first step towards financial freedom. At this stage, you stop accumulating debt. You achieve solvency because you have more income than your debt.

With your financial solvency, you take charge of your debt and start working on making the payment. People in financial solvency are earning more than their bills.

Financial Stability

A good majority of people aim to reach financial stability. Financial stability does not mean that you do not have any debt. At this stage, you can have some debt like a mortgage and student loans.

However, you should have cleared major consumer debt at this point. You should have an emergency fund that will shield you from the unfortunate event of financial problems.

Financial Agency

At the financial agency stage, you have gotten rid of all the debt. You also have enough money in your bank account to give you the freedom to quit your job. At this stage, you do not worry about losing a job and not being able to meet your expenses.

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Financial Security

You achieve financial security when you do not have to work anymore. Your investments can take care of your basic bills like housing, food, and insurance. Even if you never work in your life, you can continue living a decent living.

Financial Independence

At financial independence, you can live without going to work and still take care of your basics and comforts. You can go on holiday and enjoy some luxuries without worrying about money.…

Frugal Living Tips For Beginners

Frugal Living Tips For Beginners

Frugal living has been in existence for a long time. However, many people are now jumping into the bandwagon and are now a trending lifestyle. There are many reasons why people prefer to practice frugal living. Frugal living is meant to reduce your living expenses significantly to pay a debt or to save money towards a goal.

You can also decide to live a frugal life for your mental health so that you can avoid materialism and the need to have a lot of things in life. The majority of people adopt a frugal lifestyle to save money. Here are some frugal living tips to keep in mind:

Start With a Budget

Frugal living starts by creating a budget. If you are planning to adopt frugal living, the first step is to create a budget. With proper budgeting, it will be easy to restrict your spending and buy only the necessary items.

The idea of frugal living is to buy the necessities and even make sure that you save money while doing that. With a proper budget, you can easily see where you are overspending and try to cut down. A good budget is always the first starting point.

Smart Shopping

Smart shopping can help you with frugal living. Your shopping habits will always determine how much money you will spend on shopping. Some people end up spending up a lot of money by going to the store all the time.

If you are an impulse buyer, avoid going to the store all the time and instead do bi-weekly shopping. Spending time on the store will make you spend a lot of money in the process due to impulse buying. You need to check prices when buying so that you can save as much as possible. For large families, bulk shopping always works.

Food Shopping and Preparation

Frugal living is all about saving money on the basics, and food is a big part of our expenditure. It is possible to save on food by buying food in bulk. You can also save money by avoiding brands and instead of buying foods that are whole.

After shopping for food, doing meal preps is also important. You need to prep your meals so that you avoid the temptation of eating out.

Save And Invest The Extra Money

Frugal living is not just limiting the amount of money that you are spending. This is a good time to save. The goal of frugal living is to help you to achieve a goal, and you should be able to do that.…

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