Keys to Financial Freedom
3 Ways to Achieve Financial Freedom

In today's economy, people are more concerned than ever about financial freedom. It's not enough just to survive or even be comfortable; consumers now want to make sure they've got a stable lifestyle that will let them be independent, and not just happy.

But how do we make that happen? How do we go from dreaming to achieving? The answer, thankfully, is a lot more simple than some people believe.

The first and biggest part is living within your means. In other words, you should only make a purchase if you can cover it with the cash in your pocket or the money in your bank account. There are, obviously, exceptions to this rule: major items like cars and houses almost always require financing, and those are decisions you need to make with your family's income and best interests in mind. But for almost everything else in your life — food, clothing, groceries, entertainment, vacations, you name it — you should only spend what you have and never use credit.

Financial freedom is another way of talking about independence and choice, and when you're debt-free and able to pay your way, you'll understand just how great it can be to have that freedom. The less you owe a lender, the happier you'll be.

Related to that, you should remember to use credit wisely. Credit cards aren't evil; they're just a tool, and one that can be used properly or improperly. Some people take a reactionary approach and avoid credit cards altogether, but that can be just as damaging for your credit score as maxing them out. The goal of credit cards isn't to ignore them, but to use them responsibly and prove to your bank and other lenders that you know how to manage your money and pay off your debts in a reasonable amount of time.

Here's a great way to build up your credit: When it's time to make a regularly scheduled purchase, like a meal out or groceries, use your credit card instead of cash or a debit card. Then pay the small amount off entirely when your bill comes. You'll already have the cash available to cover the bill, since the purchase was one you were going to make anyway. Plus you'll be able to pay down the entire balance in one move and go back to being debt-free. Do this regularly, and you'll demonstrate to banks that you're a responsible consumer.

Your credit score will improve, you'll get better interest rates on loans, and you'll find that lending institutions are a lot more willing to work with you. Credit cards are how you prove yourself to the world and establish real financial freedom. They're a big responsibility, but one worth taking on.

You should also start planning for the future, if you haven't already. True financial freedom isn't just freedom from debt, but freedom to do what you want with your life, especially in your golden years. If your company offers a 401(k) plan, put every dollar you can into it.

Talk with a financial adviser about what kind of funds you and your spouse or family might need to survive in 20, 30, or 40 years. The earlier you start, the more money you'll be able to sock away for an eventual retirement. Don't be afraid at giving up money now to plan for the future, either. You'll be amazed at what you can live without, especially if it means giving yourself a nice retirement. You don't want to wake up one day and realize you're still a wage slave with no exit.

Ultimately, by making smart decisions and following some simple steps, you'll be able to achieve financial freedom and live well no matter your income.

Mariana Ashley is a freelance writer who particularly enjoys writing about online colleges. She loves receiving reader feedback, which can be directed to mariana.ashley031[at]gmail[dot]com.

If you enjoyed this article, there is more help and encouragement for living on a budget such as the 9 Steps to Financial Freedom.

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