Habits that Lead to Financial Freedom

What is financial freedom? Every individual has their own definition. For many financial freedom is having the financial means to live the lifestyle of their choice. Others say financial freedom is having enough money to make any career choice without the burden of maintaining a salary. This is a goal of many Americans- but few actually are able to achieve this. It is so important to start these habits early on, especially as a young adults. Imagine what your life could look like and all you can do (traveling the world, starting your own business, buying your dream home, or anything really that you desire), if you can reach financial freedom. The possibilities are endless.

Imagine where our world would be if young adults were educated and kept mindful about financial habits early on. Think about the positive effects on society for not only our generation but our children and grandchildren. Let's be the generation where many can reach financial freedom and become financially literate.

Here are some habits to develop as a young adult that will lead to financial freedom.

1. Define your Goals

Before anything, it is important to get your priorities straight. Financial freedom can look different to different people. It is important to figure out what you want specifically. Your list of goals can be short term or long term. If you specifically know what you want and can visualize this, you are more likely to actually make these goals into reality.

2. Track Spending

Keep track of your daily, weekly, or monthly expenses. Getting into this habit now will enable you to manage your money and stay aware of your goals.

3. Create a Budget

You must learn how to create a budget. Budgeting is an important life skill, whether that is for your household or daily spending. Creating a budget and sticking to one over time will allow you to save money and become aware of your choices. This can help you manage your spending, savings. and work towards your goals.

4. Start Investing

It is never too early in the game to start investing. A great place to start is opening an online brokerage account. If you are under 18, talk to your parents about creating an account. If you are 18, you can start off by creating a manageable portfolio and learning little by little. Even if you contribute a small amount per month or every two months, you are off to a great start.

5. Be Healthy

Health can have tremendous reparations for your bank account. Investing in healthcare and daily healthy habits will not only improve quality of life, but avoid many negative financial consequences. Think about the amount of sick days from work, missing school, early retirement due to health complications, hefty doctor visit bills, high insurance rates, and lower income- that can result from not taking proper care of your health.

6. Save

Even if it is a few dollars a month, saving is a powerful concept and tool. Whether you start saving money you accumulate on your own or in a savings account that earns interest, you are saving! This will allow you to manage your money and start creating the habit of saving for emergencies.

7. Stay Aware of Financial Situations in Your Local Community and Country

It is critical to stay on top of the financial situations in your local community. This is critical so you are aware of how this can affect your goals and ability to generate income. Therefore, you can adjust your goals and plans accordingly.

8. Financial Literacy Skills

There are many basic financial literacy topics that are essential to understand as an adult. If you do not have access to a financial literacy class, having access to internet is all you need to start educating yourself. You can listen to financial literacy podcasts, YouTube videos, articles, and many free resources to begin to develop a basic knowledge of everyday financial concepts. Or even without internet, your local library has many great resources. These concepts are not strictly for someone who wants to become a banker, these are concepts every person should have a basic knowledge of. For example, do you have a working knowledge of what a credit score is and how to maintain a good one? As a young adult, you will eventually have a credit score. This is one example of a topic you should be aware of to set yourself up for financial freedom. Keeping a good credit score is key to financial freedom. Having financial literacy skills and being knowledgeable of these topics is very important.

9. Live within Means

Learn to live under your means. Learn to do what you can afford and not go overboard. Learning to only spend less than or equal to your allowance or current income ensures you are not creating a cycle of debt. This helps you make choices that are good for your lifestyle and ones that do not take away from your goals.

10. Passive Income

As a young adult, it is a great time to start creating passive forms of income. You can generate money doing side hustles or separate projects such as: podcasts, social media marketing, affiliate marketing, drop shipping, selling a course you create, creating an app, or writing e-books. There are many different options. Passive is income that is separate from your main source of income. Having multiple sources of income adds up to create one large income and provides different means of resources when one source may not be performing as well. Typically passive income is money that is earned with little work or maintenance involved over the long run. Essentially with this you "make money in your sleep." Upfront to start the avenue of passive income, there can be lots of work and time involved. However, once the project is up and running, typically there is little requirements on your part besides necessary minimum maintenance.

11. Explore Career Options

If you have a certain lifestyle in mind, it is important to start thinking about your career options. Do you have a plan to afford education for different career options? Is the career you are considering have a desirable salary in the lines of your financial goals? Does your career path follow a typical 9-5 work schedule or can you create your own schedule? These are all factors you should consider!

12. Define Beliefs

One of the most important aspects of accomplishing anything is getting into the right mindset. You must surrender your limiting beliefs of not being able to achieve this. If you have doubts or do not believe this is possible for you, you need to get this out of your head and realize financial freedom is feasible no matter what the circumstance.

Works Cited

Danielsson, Matt. “How to Reach Financial Freedom: 12 Habits to Get You There.” Investopedia, Investopedia, 13 May 2022, www.investopedia.com/articles/personal-finance/112015/these-10-habits-will-help-you-reach-financial-freedom.asp.

15 Steps to Achieve Financial Freedom | Personal Finance - US News Money. money.usnews.com/money/personal-finance/slideshows/steps-to-achieve-financial-freedom.