Rising interest rates, the rising cost of living and market fluctuations have put many people in a position where they are struggling to achieve financial freedom.
According to Tlaane Ntuli, chief marketing officer at Metropolitan Life, financial freedom is a journey in which we have choices and the freedom to exercise those choices concerning our finances.
“Financial freedom can sound like a farfetched dream. But the truth is, it is possible for anyone to achieve. No matter what financial troubles you have today, there’s always a way to get back on track,” Ntuli said.
Bertie Nel, head of financial planning and advice at Momentum shares five steps to achieve financial freedom.
Take a good look at your financial situation
Assess your current situation by paying careful attention to income and expenses to get a clear picture of where you stand financially, as well as identify areas for improvement.
Set financial goals
After knowing where you stand financially, it’s time to set your financial goals. These can include paying off debt, saving for a down payment on a house, or investing for retirement.
Ensure your goals are SMART: specific, measurable, achievable, realistic and measurable.
Create a budget
A budget is crucial for achieving financial freedom because it helps you track expenses, avoid overspending and save enough to meet your goals.
According to Budget Insurance head Tyrone Lowther, a basic budget is one of the most underrated tools for gaining control of your finances, managing spending, saving and avoiding debt.
Reduce debt
High debt levels significantly hinder financial freedom. You can tackle your debt by paying it off, starting with high-interest debt such as credit card balances. You can also consider consolidating your debt or negotiating with creditors to reduce interest rates.
Build an emergency fund
Nel said: ‘’An emergency fund is a safety net for unexpected expenses like medical bills or car repairs. Aim to save three to six months' expenses in an easily accessible savings account.’’
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