6 Steps to Financial Freedom

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 You’re scrolling through Amazon, thinking you’re just gonna window shop, and before you know it, you’ve bought a unicorn-shaped pool float, a 50-pack of flavored lip balm, and a self-stirring mug. Oops. Or maybe you’re paying for a gym membership you never use, or subscribing to a million streaming services you don’t actually watch. Maybe you’re buying expensive lunches at work every day instead of packing your own, or letting your car sit in traffic and burn through gas.

Whatever your money-wasting habits may be, it’s time to face the music and take control of your finances. Don’t let those dollars slip away from you like a greased-up piglet. Grab them by the tail and hold on tight. It’s time to be smart with your money, my friends. But it’s not just silly online purchases that can drain your bank account (well, don’t get me wrong here, those can dip your balance pretty fast too, but I mean things that can keep you broke, forever).

There are a handful of other sneaky, really disturbing ways you might be wasting your hard-earned cash without even realizing it. But don’t lose heart, on the bright side—the first step towards financial freedom is to get rid of old-suffocating financial habits. And then you can move on to practicing the best financial habits. In the meantime, let’s take a look at the 7 things you need to stop doing ASAP.


Credit Card Interest

You should never allow yourself to be put in a position where you pay credit card debt that’s one of the highest credit card interest you’ll ever pay. and don’t use your credit card when you’re not going to be paying in full every month. Most cards have variable interest rate plus prime that gets you an average APR ( annual percentage rate of 19.6%) assuming you’re paying 19.6 which is a guaranteed tax-free risk-free rate return.

That’s like the highest interest you’ll ever pay. Because paying off a credit card debt puts you on a hook.

For example, Joe has a balance of 2000 dollars on his credit card and payment is a bare minimum of $60 per month, and the Interest rate stands at 20% we’ll be doing simple math of 2000×20÷12(monthly payment) =33.33 in interest. Now let’s calculate his repayment. If we take 60-33,  we’re going to be at $26 and 67 months, aiming towards that which turns his balance to $1,973.33. (2000 minus his principal payment). Now if he’s paying the minimum payment of $2000 which is a $60 per month repayment,  how long will it take Joe to pay off debt? We’re looking at 15 years and $4,241. That’s what it takes for him to pay off $2000 in debt. whew!! So you should never pay credit card interest, especially the minimum balance. If you do have it, pay it off as soon as possible.


Not Investing

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If you’re okay with living off of debt and have zero dollars invested then you could be looking towards a dangerous part. it’s equally as dangerous if all you are doing is saving your money. I’m afraid you’re also closer to the danger that entails. The fact that inflation is always in our faces ready to devalue our money every chance it gets, that makes it a bad idea to keep all your life savings in the bank without investing for your retirement. And given that right now, it’s back in our faces, it should give you a rethink on how to put your money to better use. And some of us do that by investing. Investing your money also means  fighting inflation and here’s an example of this fact,

If you put 200 away each month at 0.5% in a high-yield savings account, you’ll get 63,000 dollars after 25 years. whereas if you put the same $200 at a modest 6% on say a stock market fund S&P 500, at the end of 25 years you’ll have $131, 000. Isn’t that a much more effective way of combating inflation and retaining your purchasing power? and better yet a better way of creating a safety net outside of your emergency fund, so you have a solid portfolio that is well rounded to weather through thick and thin.

If you’re only saving money you’re technically losing money due to increased inflation and the minimized purchasing power and that’s because of the interest rate in your high-yielding savings accounts.

Not investing can be one of the worst things you can do to your future self and your family.


Investing More Than You Can Afford to Lose

Thankfully, you already know not investing at all is bad, investing more than you can afford to lose is just as bad! We all know that investing is a risk assessment (maybe not all of us), and every investor is compensated for the amount of risk involved in certain investments they take. But the truth is you should never invest in any more than you can afford to lose. If you’re investing in a municipal bond that has little chance of defaulting then you should be expecting a little compensation for that. If you’ll be taking chances new start-up that has little chance of succeeding, you need to be certain on the expected level of compensation to be able to do that as well. So you are compensated for the risk you take.

Read:  3 Cheat Codes For Saving (With no Budget)

But sometimes you have to be careful especially how the environment is saturated. Cryptos, stocks, etc. Do yourself a favor to understand how much you can afford to lose or invest so you’re not tested on too much risk that will probably scar you with losing too much and turning you off completely from investing and building wealth for the future.


Spending Carelessly

There’s a saying that says, a fool and his money are quickly departed.

That is another way of saying—when we are not saving and budgeting our expenses we will automatically be unintentional about our money and be quick to throw away whatever sum of money comes our way (I personally use this quote as a mantra to retract whenever I’m compelled to buy things I don’t need). And many of these impulse spending often lead to regrets as time goes on. That’s why you need to avoid spending carelessly and be intentional about your finances, and that can only be done effectively when you start learning to set a budget or savings plan for all your expenses. In addition, you must be familiar with planning, budgeting, and setting limits to your monthly expenses. By doing that you’re cutting off the unnecessary parts of your expenses, creating space and saving up for your dreams.


Don’t Show Off, it Attracts a Lot of Bad Things Than Good Things

This one is a little different and especially speaks volume to the rich folks. Whether you work your way up to achieve your goal or come from what they call “old money” Never make the mistake of showing off your wealth.

How do you know those who love you and those who don’t when you do nothing but show off your wealth?

In fact, you should be wary of showing off, not proud of it!

Most of the time, showing off attracts bad things—the fake friends and relationships (people who are only attracted to what they can get from you), and very likely chase the good ones away or even make unwise money decisions that could cost you dearly. Not to mention when you run dry they will fly right out the window leaving you alone to wallow in your misery. you’ll be lucky if you still have a single friend in your corner. But there’s something attractive about living a quiet life. When you live modestly, it’s like you saying you’re much more than your wealth without even saying a thing. And that’s what really matters because you’re after making good decisions for your life. Enjoying life means doing the things you love like traveling the world to gain more experience as opposed to a life of materialism.

Read:  3 Cheat Codes For Saving (With no Budget)


Never Live Above Your Means

Unfortunately, a lot of Americans live in a world where we feel pressured to measure up to people’s standards. Majority want to show the world or their friends they’re having fun just as much as them. I know a lot of people like this getting their eyeballs deep in debt. Don’t get yourself sucked up in debt that even you cannot envision getting rid of. If you want to please someone, do yourself a favor and be smart with your money and live below your means, people around you will see this and love you for it. That’s how to live a happy life. 

According to one report, almost two-thirds of Americans are now living paycheck to paycheck, and fewer than 40% can afford an unexpected $1,000 emergency.  If you’re living in a world where you’re overspending and yet you can’t afford a $2000 emergency or don’t have any savings as backup or no investment anywhere. I’m afraid to break it to you that you’re threading a dangerous part. If you seek a secured comfortable lifestyle then live below your means and seek Investments with higher dividends, save and budget for future events and put away money for emergencies.

A lot of times people live above their means so as to keep up with the so-called Jones, “instant gratification”  as the old saying goes “don’t hang your basket too high. No matter how much you make don’t be compelled to go with the crowd. “Whatever the latest fashion is I have to have it”. This has followed people all through their lives, don’t be one of them.

Closing Thoughts

A lot of people don’t like hearing this but it’s the truth. You should never live for the sake of simply acquiring money or holding money. it’s so risky and it puts you in danger of losing everything, plus it’s a terrifying way of going through life. Money is a tool you should use to acquire wealth, protect your future self, and your family, and be able to give to others when you can.

Money actually stays and multiply where it’s best treated. Spending wisely, saving for retirement, and investing equates having a thick portfolio that can help you weather through any of life’s storms. Hopefully, this article will help you to start taking back control of your finances.

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