In Partnership with APG
“Financial freedom” is an enticing term for many — but at the same time, it is all too often something that feels unattainable. In fact, 36% of individuals in the UK live paycheck to paycheck, and 26% say they struggle financially. True financial freedom comes from being free of debt, building up your savings and having the ability to fully decide how you will use your money.
As Dr. Parwiz Daud, CNO at Validus explains, obtaining financial freedom is far from impossible. By understanding some of the most common obstacles standing in the way of true financial freedom, you can begin taking steps to overcome them.
1. Not Having Clear Goals
To get yourself started on the path toward financial freedom — and to stay there — Dr. Daud recommends developing clear goals to motivate you. “There are two things to consider when making your financial goals,” he explains.
“First, there is the why — why do you want to achieve financial freedom? This could be something as simple as having the ability to travel the world, or you might want to create better opportunities for your family. Then you can set goals for what your financial accounts will need to look like to achieve those big picture goals. How much money do you need to earn? How much should you be able to invest? The more specific your goals, the easier it will be to develop an actionable plan.”
After setting a specific financial goal for yourself, carefully consider the steps that may be needed to accomplish it. Many of the tips discussed in this article could play a key role in your planning.
2. Lack of Knowledge
“For many people, the biggest obstacle holding them back is a lack of knowledge,” Dr. Daud says. “They aren’t taught about personal finances in school. Many do not get good examples from their own families. And all too often, institutions make it harder to access basic resources or knowledge, particularly for already disadvantaged individuals who are unbanked or underbanked. Simply increasing your knowledge of the financial world — and personal finances in particular — can go a long way.”
While institutional barriers remain in place for many, the internet has helped level the playing field in everything from understanding stock brokers to learning about cryptocurrency and other alternative investments. By seeking out reliable sources of information, you can learn skills and habits that strengthen your own financial practices.
3. Not Part of the Right Network or Community
While networking is understood to be an important part of the business world, it can seem daunting for individuals with less professional experience, and especially for those from underprivileged backgrounds.
As Dr. Daud explains, networking and community-building shouldn’t be limited to a select few.
“It’s hard to achieve financial freedom when you don’t know where to turn to for reliable information. A strong community can provide you with so much — from information on sound financial practices to support that will help you reach your goals. The right connections can serve as a valuable resource that will provide new opportunities that you might not have otherwise.
4. Insufficient Income
One of the most straightforward ways to increase your financial security and get closer to true financial freedom is to increase your personal income. This way, rather than focusing on ways to save, you have more money available to cover your existing debts and other expenses. Even increasing income by as little as $100 per month can get you closer to true financial freedom.
As Dr. Daud explains, “In today’s world, it is much easier to increase your income than you might expect. You don’t have to wait for a raise at work. You could seek out quality investment opportunities to grow the money you already have. You could start a side hustle that brings in additional income beyond your current job. By increasing the number of income streams you have, you can grow your income and achieve greater stability for dealing with unexpected financial challenges.”
5. Not Starting Early
One of the most commonly cited steps for achieving financial freedom is to start saving early to take advantage of compounding interest, as this gives your money more time to grow. Unfortunately, many people delay saving for retirement or other future goals because they feel constrained by debt or a lack of income.
“Time should be your best friend,” Dr. Daud says.
“It doesn’t matter if you can’t save a lot of money at first. Every little bit that you can put toward your long-term goals can make a positive difference. And when you start early, you don’t necessarily have to invest a whole lot each month to achieve wealth later on. Develop the discipline to pay yourself first by making investing or saving the first thing you do when you earn money.”
Start Your Path Towards Financial Freedom
You can’t control everything that affects your finances. But regardless of your current level of income or debt, working to overcome these common obstacles to financial freedom can help you grow your wealth. It may require time and effort, but achieving financial freedom can become a reality.
Image and article originally from www.benzinga.com. Read the original article here.