Living a life free from debt is everybody’s dream. However, only few are actually able to achieve it. Most people will only dream about such financial freedom, some might find out how, but don’t know how to act upon it. Do you find this relatable to you?
As an employee, it is normal that you want to spend all of your paycheck as soon as you receive it, as you might think that you have worked hard to earn it. Not to mention, it is tough to resist the urge to swipe those credit cards, especially when you find out that your favourite shoes brand is having a huge garage sale and your dream smartphone is available on pre-order. What happens to that debt-free life resolution, then?
Do you believe that financial freedom is defined by:
the habit you have now?
how you spend that paycheck?
where you buy your morning coffee? or
how you use your credit card?
Financial freedom does not just happen unless you work to make it happen. Here are 5 habits that will help you have a brighter financial life:
Going to the supermarket for weekly or monthly shopping can be a good routine as you need to buy stuffs for daily life. However, if you go without having a purchase plan, the fact that you will spend more than expected can be inevitable. If this happens repeatedly, you might end up having a financial trouble. You might be able to spend a lot today, but what about later? At the beginning of the month, you can treat yourself fancy dinner in a Michelin star restaurant, but at the end of the month, you cannot even afford buying instant noodle. The next thing you know, you use that overlimit credit card or borrow some cash from a friend.
To avoid the vicious cycle of debt, you should jot down your purchase list. Make it simple, only write necessary things you need, prepare only enough money for this, and bring the list whenever you go shopping. This strategy will help you from overspending money for unnecessary stuffs you merely want.
You should be the one who is in control of the things you have, and not vice versa. You have the right to use your credits cards but how often you use it will define ‘how deeper you will fall into financial slump’. For example, you go to the office bringing the credit card in your wallet. Some friends of yours invite you to hangout with them. To make the story short, you end up treating everyone in that extravagant cafe using your credit card, without thinking that you might not be able to afford it.
The point is, you should not spend more than your monthly income. Learn the habit of not bringing your credit card everywhere unless it is necessary. You can bring some cash according to your needs, instead. Additionally, you should learn to say no for indulgent spree.
Not only you should be careful in using your credit card, you should also pay attention to your monthly expenses such as shopping, paying bills, and other related expenses. Also, when you want to subscribe something online, you should pay attention to its policy regarding the credit card information.
Most people tend to spend and spend without thinking about the future. It is like “I have the money, I will buy whatsoever I want.” Don’t be such person.
You won’t be young forever and someday, you have to retire from the workforce. Therefore, you should have financial plan such as I will spend this money for monthly needs, and invest the rest of the paycheck. Plan your future and stop overspending your money.
Warren Buffet said, “Never depend on single income. Make investment to create a second source.” So start investing if you want to get your financial freedom. But how do we make the right investment? It is by spending less of your income to buy liabilities such as expensive house, cars, or watch. Follow the rule of “don’t go broke trying to look rich.” Start investing your asset and make money work for you.
You can learn about investment through the famous book of Robert T. Kiyosaki & Tim Wheeler entitled “Rich Dad, Poor Dad” & “Cashflow Quadrant”. Moreover, investing money will help with your retirement. You do want to find your future-self travelling the world, not sitting on that chair and regret everything, right? Then, learn how to invest.