Taking The First Step Towards Financial Freedom

Financial freedom means that you get to make life decisions without being overly stressed about the financial impact because you are prepared.

What is the first step towards financial freedom?

Saving money.

Sound simple? Then you are part of the minute percentage of people who can save money.

In reality, most people are just living from pay cheque to pay cheque.

So why are people not taking the first step towards financial freedom?

For one, social media is to be blamed.

It is such that appearing wealthy on social media has become its own industry.

1. Resist Urges
2. Save automatically
3. Find the purpose
4. Own a property

Resist Urges

People prefer instant gratification in general. No one would WAIT for what they want if there is an immediate way to get it.

To save, one needs to be disciplined enough to delay their urges.

Humans are irrational beings, as such, saving money may not be as easy as it sounds.

My way to resist urges is to understand that how the media works and not let myself be manipulated.

We are bombarded with ads everyday.

Some sources say the numbers are somewhere between 4000 and 10,000 ads per day per person.

Knowing this, I will take a step back and take at least a week before I make an expensive purchase.

Save automatically

Have separate bank accounts. One for savings, one for essential expenditures and one for enjoyment.

For a start, you can use the 50/30/20 rule.

The 50/30/20 rule budget is a simple way to budget that doesn’t involve detailed budgeting categories.

Instead, you spend 50% of your salary on needs, 30% on savings and investment, and 20% on wants/luxuries.

Find the purpose

The lack of purpose to save our money leads to a lack of motivation to do so.

Find a purpose on why to save.

Start by thinking of what you might want to save for—perhaps you’re getting married, planning a vacation, or saving for retirement.

Then figure out how much money you’ll need and how long it might take you to save it.

One of my prime motivations to save is not to be a liability to my loved ones and enjoy my golden years with my future grandchildren.

Own a property

I believe having a house is a sure-fire way to save your money.

It forces one to put aside money to pay for something that will increase in value in the future.

You either pay your mortgage or lose the home.

Having a home not only helps you save, but you can enjoy the comfort and safety it provides.

Given the grants and schemes that are available, it is achievable to own a home in Singapore.

Conclusion

Saving money is a habit that is needed before we start building wealth.

Take a pinch of salt on how “well” people on social media are doing.

Focus on yourself.

At the end of the day, real wealth is silent and exclusive.