Every Filipino dreams to achieve financial freedom. We all want a better life and a brighter future for our family. This article is for everyone especially newbies like me who want to take charge of their personal finance and seeking financial freedom.
The 5 simple steps below are collection of my previous articles that can help you achieve financial freedom.
Step#1 Setting Financial Goals
Before you start budgeting, saving and investing, you need to have a clear financial goals. This is one of the fundamentals and basic building block of financial literacy.
Set clear and precise financial goals to achieve financial freedom. This will be your road map in your financial journey. Having clear and precise financial goals will definitely give you the advantage to achieve financial freedom sooner.
Why? Because you know where you’re going. And by knowing where you’re going you will not waste time on other things that will not contribute success to your life.
Focus to your financial goal and start working on it. Sooner than later, you’ll have all your financial goals achieve before you know it. Read the article to guide you on how to set financial goals.
Once you set your financial goals and ready to start taking charge of your finance to the highest level, create and follow your budget to move closer to your financial goals.
This is also a step that you need to take if you really want to achieve financial freedom. Knowing the in and out of your money will give you an idea how you can achieve your financial goals in life. You’ll have the grasp of how much money you need to allocate in every aspect of your life.
Having a simple budget will also help you identify where you can save money by knowing your expenses. With that, you can start cutting those unnecessary expenses to increase your income and put those money to investments that could you more return in the future.
You can follow my budgeting guide here to give you more idea.
Step#3 Emergency Fund
3rd step I want to share is building your emergency fund. Along your journey you will encounter downfalls that can affect your finances. Emergency cases like sickness, hospitalization, natural calamities and others can really a devastating situation if you’re not prepared.
Build a solid emergency fund so that when the unforeseen things happen, you are backed up and can still follow your goals. Building a solid emergency fund is shared in this article. Read to get more ideas on the ABC of building emergency fund.
Protecting yourself against unforeseen circumstances are also a MUST in our financial freedom journey. It’s not enough to just have an emergency fund, we should also have a life insurance.
This will give us piece of mind that when a ‘real emergency‘ happen, our family is protected and live their normal lives. Not only that, when we die and we are insured, this can also serve as protection from taxes of other investments we have.
Get more ideas about insurance on this article.
After all of the fundamental steps above, we can now choose the best investment vehicle that can help our money grow and lead us to financial freedom. Read more about the basic of investing on this article.
Remember that all investments comes with a risk so we need to evaluate the risk involve in each of the investment we will get into. One of the best thing we can do is to invest in ourselves.
Let’s feed our mind with educational information that can help us be more financially literate. One of them is by reading article like this. You can also check my Top 8 Filipino personal finance bloggers that could change your life here.
By following and reading these blogs, we are increasing our knowledge about personal finance. Of course we need to apply those learning in our lives in order for us to grow.
There are a lot of investments we can venture to. You can open a savings account that could earn you interest. Time deposit will also give you a higher interest than savings account if you can let your money stay in the banks for a specific period of time. You can start a business if you want. There’s a lot of choices.
Another investments we can venture to is the stock market. I have a super-newbie guide on how to invest in stock market if we want and ready to learn on how to invest in stock market.
These are only few, there’s a lot of investment we can venture to that can help us increase our income or help our money grow. Pick which one is the best for us. They all have risks involved. Use our best judgement which really suit our needs and those that we really understand.
Always remember that investing in ourselves first is the best investment we could ever have.
Achieving financial freedom takes time. It’s a journey. Along the way we will encounter difficulties and trials that will test our faith and our ability as a person. We should not give up. Just stay strong and positive.
Just start small and take one step forward towards those goals. For as long as we stay determined and focused on our goals, time will come we’ll be financially free.
We should also remember that it’s not the money that make us happy and successful, it’s the GOOD THINGS that money can do for us, our love ones and most importantly to other people.
Let’s achieve financial freedom, one step at a time.
To our success, cheers!
Sammy Sulpico says
What is the best way to invest in stock market, direct or through mutual fund. But In mutual fund there are so many fees to pay & being deducted.
Really depends on the person’s goal. If you have the knowledge, I’d prefer directly invest in the stock market long term. If not, much better to opt with pool funds like mutual funds and UITF. Thanks!
MAJORITY OF THE PEOPLE:
Don’t understand how money works
Earn low rates of return and pay too much tax
live from paycheck to paycheck
live on the edge
Spend not save
caught in the high interest debt trap
retire in poverty
MINORITY OF THE PEOPLE:
Plans for future
Put their money to work for them
have their money professionally manage
have emergency fund to shield from financial storm
HOW WE SPEND OUR MONEY MATTERS!