How can you achieve financial freedom? If you're looking for a clear answer to this question, you've come to the right place! Existential fears and the pressure of always having to earn and have enough money available make life much more stressful. That's why most people strive to be financially independent.
There may not be a patent remedy to achieve this calming state - but fortunately there are some valuable tips and measures that are relatively easy to implement.
In this article, I would therefore like to give you the most important tips for financial freedom. Use them, for example, to get rid of money worries or to become more independent from your job. Let's go!
Definition: What does financial freedom actually mean?
Because real financial freedom or independence depends on how you want to live, Each person defines the terms individually. For example, some people feel financially free when they can pay their rent and other fixed costs without any problems - others only feel free when all their expenses are covered. Realize your life's dreams with the money you have earned for a lifetime.
In principle, however, it can be said that those who are financially independent are those who have sufficient Have capital available to be able to decide freely in the long termhow they organize their lives.
However, it is usually not just a question of having enough money to live on, but also to ensure a steady personal development own - and to own your own To be able to maintain an unrestricted standard of livingwithout having to work for it or invest any more time.
When do you feel financially free? Feel free to write me a comment with your personal definition under this post.
Advantages: Why do people strive to be financially independent?
Before we move on to the specific tips, it is first important to understand why financial freedom is worth striving for in the first place. Of course, there are many people who simply want to have enough money, to travel the world and buy expensive cars, boats and watches. to be able to afford it. But this is not about greed!
In the following, I would rather focus on the completely natural, human motives for the pursuit of financial independence. These are above all
- Free choice of profession (e.g. a Job that fulfills you completely)
- Less stress (e.g. no longer having to live from one paycheck to the next)
- More time (e.g. for early retirement or for hobbies, family and friends)
- Security (e.g. no more existential fears in the event of a serious illness)
- Legacy (e.g. for spouse or own offspring)
Of course, there are many other reasons. I would argue that financial independence is also so desirable because it allows us to at least Control the parts of life that can be controlled.
10 tips: What can you do to become financially free?
Anyone who is financially free can therefore in principle Shape your life according to your own wishes and needs. That sounds great, of course!
But what do you have to do in your everyday life to become financially independent? I will now give you the answer and the most valuable tips for financial freedom before.
1. learn to handle money
Good budget management is the absolute basis for financial independence. Because only by spending less than you have available each monthyou can build up savings, which in turn provide you with further income.
So try to live below, rather than above, your means and to consume more consciously. Ask yourself what you really need and only buy what you really need. And be aware that you are also spending money when you pull out your digital credit card or order something online.
So we need to learn, live a good life with less money. For this you must Avoid impulse purchases, identify unnecessary spending and potential savings and every month within your means Put money aside.
Tip: Did you actually know that by save an incredible amount of money with a sustainable lifestyle can? In the linked blog article you can find out why and how this works.
2. set yourself clear (financial) goals
If you want to be financially free, you literally have to be aware of where you want to go! So formulate Clear, realistic and measurable goalsto structure and prioritize your financial aspirations.
For example, if you want to retire at the age of 50, you will need to save money every month. So decide, how much money you need at this point in time to be able to live off the interest.
The answer motivates youwork towards your goal - regardless of whether it's saving for a new car, your own home or early retirement.
3. create a monthly budget and savings plan
A detailed budget plan allows you to monitor your income and expenditure closely. So make sure you work out how much money you have available each month! What is left over after deducting rent, food etc. (set a fixed amount!), you can then set aside each month for your "emergency fund" or retirement savings.
If you have the opportunity, you can save 1000 euros every month for the next 20 years, for example, and have the following when you retire around 240,000 euros + interest and compound interest are available. Smaller savings contributions will of course also bring you closer to your goal.
However, when calculating the savings rate, be sure to take your Current financial situation, the Expected return, as well as the Inflation and Taxes on investment incomeif you want to be financially secure at a certain point in time.
4. take out the right insurance policies
Whether Cell phone insurance, accident insurance, luggage insurance or the Eyeglass insurance - Many insurance policies are not absolutely necessary these days and simply cost money.
Others, on the other hand, are essential, to protect you from serious financial and health damage. If these losses occur, the dream of financial freedom will be over before you know it.
For example, in addition to private liability insurance, statutory or private liability insurance is also mandatory. Health insurance. But PKV Vs GKV - Which is more worthwhile?
I can personally recommend the Private health insurance from Ottonova* recommend. Regardless of whether you are employed, self-employed, a civil servant or still a student, it will definitely provide you with the following without a lot of bureaucracy if the worst comes to the worst First-class medical support and protects you from financial worries due to possible illness.
Whether with or without deductible you decide - and the insurance company pays you around 50 percent of your premiums. for old age so that your cover remains affordable in the long term. You also enjoy the chance to save part of your Contributions refunded to get.
Furthermore, the following insurances are not mandatory, but can be quite usefulto provide you with financial security:
- Occupational disability insurance (safeguarding the workforce)
- Private pension insurance (for old-age provision)
- Residential building insurance (for homeowners)
- Household contents insurance (to secure your property)
- Legal expenses insurance (for legal disputes)
- Travel health insurance (for treatment costs abroad)
Important: Check regularly whether your tariff still fits your current circumstances - and make sure that you are never underinsured or overinsured.
5. reduce your debts
Of course, debt also has its good sideFor example, if you take out a loan to buy a condominium that you then rent out.
But many people also take them out to finance an expensive car or even a costly vacation, for example. If you want to achieve financial freedom, you should of course refrain from taking out such consumer loans.
If you have debts that are also subject to high interest rates (e.g. credit card debt or an overdraft facility), then you definitely need to pay them off as quickly as possible (and month by month). Ultimately, this will also increase your good credit rating - and therefore your investment opportunities in the future.
6. diversify your sources of income
One Find a job that you love and that fulfills youis a good basis for becoming more financially independent. However, this wish is even more likely to come true if your income is based on different pillars.
Through Part-time jobs or passive sources of income (e.g. a small online business), you not only prevent financial problems in the event of termination, but you can also increase your monthly savings rate.
Tip: How you can protect a company in case of doubt Start up without equity capital I will be happy to explain how you can do this in the linked article.
7. invest in your financial education
A Good understanding of financial fundamentalssuch as tax laws and investment strategies, is crucial. So always keep yourself informed about Financial news up to date. Also invest time and money in books and seminars - and read more about Blog posts around the world of finance - to expand your knowledge.
Your knowledge will enable you to do this, make informed decisions and effectively manage and grow your wealth.
8. invest your money
As long as your capital is simply sitting in your current account, it will steadily lose value due to the steady decline in purchasing power. With investments in ETFs, shares or real estate you can, however, give the Counteracting inflationincrease it in a targeted manner and come a step closer to financial freedom.
For these asset classes, a Long-term investment horizon helpful. So does diversification to spread risks and maximize your returns.
Tip: I personally invest my money sustainably into sustainable, ethically responsible and environmentally friendly companies. You can find out how this works in the linked blog article.
9. compare and negotiate goods and services
You don't have to follow the Frugalism commit or total live frugallyto be financially free one day! It is much more important to make conscious and well-considered expenditures that you haveso that you have more money left over to invest profitably.
Compare prices (independently or online via comparison portals) and be Open to negotiationwhenever possible. Also buy food seasonal and non-perishable products such as pasta and nuts in Bulk packs.
And if you ever need garden soil, you shouldn't buy it pre-packed at the DIY store but with a borrowed trailer. Directly from the building materials trade get. You really do have hundreds of opportunities to save a euro or two.
Tip: Consumption doesn't really make you happy - at most in the short term. In the linked blog post, I'll show you why this is the case.
10. value and care for your property
Many people are greedy and always want to own more and for this very reason are never really financially free. Being financially free also means appreciating what you already have.
By regularly looking after and maintaining your car or household appliances, for example, you extend their service life and save you high new purchase or repair costs in the long term. Investing in maintenance is generally much more cost-effective than buying new.
However, taking good care of your material possessions will also preserve their value. For example, you can still use certain items many years later. sell at purchase price or even at a profit.
Important: You may also spend a lot of money on clothing in the course of your life. How your fashion becomes more durable and save you a lot of money, you can find out in the linked blog post!
Achieving financial freedom, made easy!
Financial independence is definitely not an absurd dream, but rather a clear - and with the right strategies and a disciplined approach - a reality. Absolutely achievable goal. The sooner you understand this, the sooner you will be financially free.
Here and now I have the most important advice for you. Use them to free yourself from the financial pressure of everyday life in the medium or long term. In my opinion, you are ultimately financially free the moment you feel that you will never have to work again for your personal happiness.
But always be aware that the way there usually a lifelong process that requires willpower and a lot of patience. Your Health should always have top priority, which is why the The right cover with ottonova* is also the basis of your personal freedom.
"It is not the man who has little, but he who desires more, that is poor."
Seneca (more under Wealth Quotes)
I really hope I've been able to help you. Do you have any questions, suggestions or other tips and ideas for becoming more financially independent? Then feel free to write me a comment under this post.
Stay motivated and goal-oriented,
PS: You can save money in all areas of life. Next, for example, take a look at my Article about low-cost gardening on. You'll be surprised how much savings potential there is in your own greenery!
