3 Habits That Can Accelerate Financial Freedom
Who in this world does not want to achieve financial independence? Living life without being burdened with the burden of debt installments, choosing and buying luxury boats for sale, must be really fun. Likewise, enjoying work just for the satisfaction of self-actualization without being driven entirely by the need for money. After all, financial independence is the desire of almost everyone to enjoy life.
What are some financial habits that can help you achieve financial independence faster? Here are 3 financial habits you need to build:
1. Get in the habit of setting aside an emergency fund
An emergency fund is very important to help you deal with an urgent situation that requires immediate cash. By building an adequate amount of an emergency fund, you can avoid debt when you are in a pinch.
How to build an emergency fund is not difficult. Every time you get income, make it a habit to set aside at least 10% for an emergency fund. Collect until you can reach at least three to six times your regular monthly expenses. By the nature of emergency funds intended for emergency conditions, place emergency funds in instruments that are easily accessible or disbursed such as savings, gold, money market mutual funds, and so on.
2. Get in the habit of preparing regular budget plans
Every time before receiving regular income, make it a habit to prepare a budget and spending plan. It’s easy. All you have to do is write down a few important points, namely an income plan and an expense plan. In the income plan column, write down what will be your source of income for the coming month. Then, in the expense plan column, write down what your spending plans are for next month. These expenses range from routine needs expenditures, insurance expenditures, investments, social expenses, and so on.
Getting used to having a regular budget plan will help you know the face and condition of your finances. So, you can be more focused on optimizing every penny of income. You can take advantage of various financial budget applications that are now increasingly available on smartphones.
3. Limit consumer debt
What is meant by consumptive debt is any type of loan that is used for consumption and has no added value. This is the opposite of productive debt such as working capital debt where borrowed funds are replayed to generate greater financial benefits.
What are the types of consumer debt? Among other things, credit card loans, loans without collateral, shopping loans without credit cards, and so on. If you want to achieve financial independence faster, from now on make it a habit to be selective in debt. Limit consumer debt so that finances are not burdened for too long. Another way that you can easily apply is to get used to paying off all credit card bills so that you can be free from interest expenses.