The Complete Guide to Financial Crisis Recovery – Chapter 4
Excellent work! You’ve created solid goals and a plan to get your money back in shape. But what happens next? Discover the key to financial freedom with Cashfloat.
What is Financial Freedom?
Financial freedom is, first and foremost, a mindset. Living a financially free life means that you are in control of your money rather than your money controlling you. Training yourself to have a financial freedom mindset means making consistent decisions to invest in your long-term goals. Financially free people have spending and saving habits that they act upon consistently to achieve their goals. If you’re reading this, you’re already on your way to financial freedom.
Attaining Financial Freedom through Actions
In the past couple of chapters, you’ve done some intense financial planning. You’ve defined goals for yourself and a practical roadmap to reach financial freedom. But nothing is stopping you from pushing off your economic recovery for tomorrow. Putting your plan into action may seem self-explanatory, but surprisingly, this is where so many people falter. Remember those New Year’s resolutions to “save more money”? Most people were back to their old spending habits by February, if not sooner. The thing about goals and plans is that at the end of the day, they are just a piece of paper– it’s up to you to make them come alive.
Nobody wants to stay stuck in debt. But the difference between wishing you weren’t in debt and actually getting out of debt lies in taking action. Not only when you’re in a good mood, or when you feel like it, but consistently.
Developing Good Money Habits
People are creatures of habit, and you probably have some less-than-stellar money habits you want to change. You’ve even worked out which habits you need to give up in order to save money and pay off debt (ahem, that £3 latte).
We’ve got a secret for you: the only way to break a bad habit permanently is to replace it with a good one. The key to financial freedom is creating good spending and saving habits that guide the way you use your money every day.
You might be able to pause a bad habit with sheer willpower for a few days or even weeks. But if you really want to change a bad money habit, you’ve got to create an equally powerful positive one.
So don’t just rush past the coffee shop every morning, wishing you could buy your morning latte “just this once” – because chances are, you will probably give in to the temptation eventually. Instead, invest some time in learning to make a delicious homemade brew. If you swap your £3 latte for a fantastic homemade coffee every morning, you are creating a healthy, money-saving habit that will replace your old one. Small changes in your routine turn into small change in your pocket, which adds up quicker than you think.
Buying a cheaper off-brand washing powder may only save you £2.50 each time you buy washing powder. Nevertheless, if you start buying off-brand products habitually, your savings will stack up quickly.
Making a short term goal to pay off a small amount of debt consistently is rewarding and chips away at it slowly. Even £10 a week adds up to £520 in a year! Invest time in creating positive money habits that will help you get out of debt, save money, and attain financial freedom.
Train Yourself for Financial Freedom
Some of the changes you incorporated in your recovery plan were one-time actions, like switching broadband providers to save money. These are important and can make a big difference in slimming down your spending. However, these won’t train you to think like a financially free person.
The only way to train yourself to be financially free is to make good choices about the way you spend your money consistently. Developing healthy spending habits strengthens your financial freedom muscles. Routinely putting money away in savings trains you to invest in yourself and your future. Creating and acting upon these positive money habits puts you on the fast track to financial freedom.
- Financialmentor.com (n.d.), “Don’t Let An Economic Downturn Ruin Your Wealth Growth,” – Retrieved 28/04/2020
- Financialmentor.com (n.d.), “6 Steps To Recover From Financial Disaster,” – Retrieved 28/04/2020
