7 Attributes a Financially Free Individual Possesses
The idea of being financially free seems like a fairy tale. Yet, it's achievable through hard work and honest insights. The truth is, it isn't about how much money you earn, it's about what you do with that money that counts.
Too many people are waiting for their ship to come in or that mystery windfall to hit. They've fooled themselves into thinking it's the only way to get out of debt—and stay that way.
Instead, people who are living debt-free are those who have worked for it and continue to do so all the time.
What you need is a strong plan and a mindset that helps you stick to it year after year. If you can change your habits to reflect the below attributes, you can rid yourself of debt and live a life that's financially free.
- Deal With The Facts Of Debt
There's no point ignoring money concerns or problems. They won't go away if you turn a blind eye to them, and they may even get worse.
It's far better to deal with financial concerns head-on, and acknowledge when you're putting yourself in debt or could be doing so. Once you look at the facts of the debt, you can build a plan to get yourself out of it.
Getting into debt with your eyes wide open will allow you to work your way out of the situation far easier. If you understand what you've signed up for, what the repayment terms are, and the implications of late payments, you'll be better equipped to manage your money.
You need to understand every facet of your debt and never ignore monthly repayments or bills. If you face facts, you're equipped to make smart decisions, and if you're aware that you may not meet obligations, you can attempt to renegotiate a payment plan upfront.
- Focus On The Details
Keeping track of your finances is all about focusing on the details.
You need to know exactly how much you earn and how much you spend, and why. This may be tougher if you're self-employed, as your earnings fluctuate. However, it's even more important then.
Draw up an income and expenditure list along with a budget. Then track where your money goes and look at where you can cut costs or save a little extra.
Having exact knowledge of your personal finances allows you to make informed decisions about whether you can afford to make a purchase, or if it's worth going into debt for.
- Be Confident In Yourself
One of the quickest ways to get into debt is to let popular opinion sway you, or let your self-worth be reliant on the material items you own.
People who are financially free are confident in who they are. They don't need status symbols like the latest gadgets or newest cars, and they'd never buy something simply to impress others.
- Curb Your Impulsive Urges
Impulse shopping—big or small—can kill your budget quickly and put you in debt. It's essential to train yourself to be patient, and you should definitely do your research before you hand over your money. Impulse buying gives you instant gratification, but it may lead to financial problems when you find that you've overspent once again.
Instead of splurging on a whim, wait until you have enough money saved to afford the items you really want. Waiting and saving give you a much better sense of satisfaction, and they can keep you from getting into debt.
If you really want to purchase something out of your budget, there are several ways to earn extra money. The internet offers plenty of income-generating opportunities such as doing paid online surveys, data capturing, or transcribing. Another thing you can do is opt to put other talents you have to good use, such as cooking or baking.
Generating extra income from a side hustle will still teach you to not be impulsive, and it will make completing your purchase sooner a possibility.
- Take Responsibility For Your Actions
You'll never gain control of your personal finances if you don't own up to the truth behind your spending habits.
It may be scary to scrutinize how you spend your money and work out where you're spending recklessly. However, once you take that first step, you can change those habits and create better ones.
The process won't happen overnight, and it's important to note that acknowledging your bad habits is only the first step. Once you're on the right path, you'll need to have the strength to move forward and not slip back into your old ways. However, you can do it with the right amount of honesty.
Hold yourself accountable for every purchase and own up if you've spent money frivolously.
- Know How To Use Credit
Many people trying to get out of debt and be financially free think of credit cards as the devil, and avoid them at all costs. There's a serious negative stigma around being in debt, but if it's manageable and the repayments are within your means, there's no reason to avoid it completely.
Those who are financially free have learned how to use credit cards, store cards, mortgages, loans, and other lines of credit to their advantage. Just because you have a debt that you need to repay doesn't mean you're not in control of your finances.
If you can learn how to take acceptable risks with credit, not use more than you can pay back, and have a healthy relationship with money, you can still use credit and be financially free.
- Avoid Being Materialistic
If you spend your life in constant pursuit of the latest trends, you'll never be truly financially free.
Keeping up with trends is expensive, and you're more likely to put yourself in debt just to purchase material items with a short shelf life.
People living without debt are usually those who aren't chasing a lifestyle beyond their reach. They don't need to always be on trend or have the latest release because they know they'll have to sacrifice their financial wellbeing to get there.
Letting go of material desires is an important part of aiming for financial freedom.
Nurturing the attributes that lead to financial freedom is a worthwhile pursuit, no matter what your current financial position may be. Becoming financially free takes time, patience, and dedication, but it has the potential to change your life.