7 simple steps to becoming financially free in 2022

Imagine being able to live the rest of your life comfortably without ever being in debt or relying on anyone again. You have enough cash, savings and investments that make you afford the life you want. That is absolute financial freedom.

Being financially free does not mean you don’t have to work again, you can. Neither does it mean that you must work, you can choose not to. It all depends on personal preference.

These are the 7 steps that will help you achieve financial freedom in 2022.

Build good spending habits

Old habits die hard, especially money habits. Wise spending will set you up for financial freedom. Some good spending habits you should practice include:

• Avoid the lure of impulse buying
• Pay with cash as much as you can
• Compare prices so that you pick the lowest offer for the same quality
• Save some money to avoid living from paycheck to paycheck

Breaking bad habits will not happen overnight but it is achievable. Start by spending less than you earn and you will see a remarkable change.

Clear your debts

It is possible to negotiate with your creditor into lowering the interest on your credit card. You may not get the whole interest waived but you can have a significant amount reduced if you have a good credit record. This money can then aid in clearing another loan.

Start paying red zone debts that have the highest interest rates. Next clear the yellow zone debts which have lower interest rates but are long-term. Finally, tackle the green zone debts which are long-term with the lowest interest.

Financial freedom is not possible if you are swimming in debt. Debt will keep swallowing the little money you manage to make and drag you down. Deal with it, even if you will have to find an extra source of income.

Take out life insurance

Taking out life insurance has its benefits to financial freedom. For starters, you need to understand the different types of plans available to find out which one best suits your needs. A few policies you can start with are Whole of Life, critical illness cover, family income benefit, and life insurance without medicals.

By taking out any of these policies, you can live freely and take more beneficial risks in life knowing that your loved ones won’t struggle covering future expenses like college fees for your kids and mortgage in the event you depart. The result is more opportunities to generate more wealth for yourself and family while living the best life.

Focus on generating more passive income

This is the holy grail of financial independence. It gives you greater freedom to enjoy life how and when you want. Passive and semi-passive sources of income are a must if you want to be financially free before the retirement age of 60.

Don’t confuse it with salary. Passive income works for you without you working. Some passive income ideas include affiliate marketing, dividend stocks, renting out your home temporarily, and investing in real estate.

Create a budget

Select a budgeting method that you will stick to and monitor its progress. A good place to start is to implement the 50/30/20 rule as your framework.

Your income needs should be allocated up to 50% of all income and 30% should go to wants. As for savings and debt clearance, the remaining 20% should take care of that.

Budgeting is efficient because once you note expenses are greater than income, you will find ways of cutting down on expenses or finding extra income. It keeps you on track to your financial goals.

Get a financial advisor

An advisor will use his expertise to create personalized financial plans for you. They include insurance, budgeting, savings, tax, and most importantly investment plans.

A financial advisor can help you set off on the right foot towards financial freedom by counseling you on wealth management and other personal matters concerning money. Be sure to get a legit advisor who will not mess up your finances.

They will help you plan out a retirement plan for you and any questions you have concerning your finances.

Set achievable goals

Without financial goals in place, you cannot achieve much independence. Goals, especially written ones, are a reminder that there are things you are yet to accomplish. All the steps towards achieving your financial freedom should be mapped out. As with all other goals in life, they should be;

• Specific – sensible, simple, and significant
• Measurable – progress can be calculated
• Relevant – realistic and not unreasonable
• Time-bound – time-sensitive to create urgency

Are you ready to boss it in 2022?

If you want to achieve financial independence you have to start now in 2022. Start thinking long-term regardless of your level of income. Remember, it won’t happen overnight but will require you to implement small changes, atomic habits, one at a time to financial freedom