How Do You Achieve Financial Freedom?

How Do You Achieve Financial Freedom?

What does Financial Freedom Mean?

I have mentioned the phrase Financial Freedom several times in my first two posts. Perhaps some of you asks what does Financial Freedom means?  Why am I talking about it in this blog? How can I achieve it? How can you achieve it?

Financial Freedom means Freedom From Debt

Financial Freedom simply means freedom from debts! 

Do you want to be debt free?

Why am I talking about it? Because I have debts! Debts that I had from a failed business with my brothers. Who doesn't have debts anyway?

Problem with debts usually is, once you start paying for it, your salary or income from other sources, suddenly becomes inadequate or no longer enough for your needs and your family's needs. As a result you are forced to borrow more money from somewhere else to make ends meet! I have even known some people that borrows money to pay for their other loans! It has become a vicious cycle!

How can I break free from my debts?

So, how can I break free from my debts? or How can I achieve true Financial Freedom?

Here's what I have learned from the teachings of Truly Rich Club.

1.  Simplify your lifestyle - This means don't live beyond your means! Simply put don't spend more than you earn. I never lived a complicated lifestyle, but when I simplified my lifestyle further meant less expenses for me.
   
   This means:
• I no longer go to Jollibee as often as before.
• I buy less expensive clothes (and buy less frequently). 
• I drink less soft-drinks or sodas in a day. I used to drink up to three 8-oz. bottle of sodas everyday.
• I no longer go to movie houses as often as before. I used to watch at least once a week and I always have a Jollibee Champ or other sandwiches from other fast food chain with me.
• I stopped drinking alcoholic beverages --- I still drink sometimes --- maybe once in two or three months. I used to drink every-night.
  
  Other ways to simplify your lifestyle
1. Cut down or stop your vices - If you smoke, try to cut it down or stop it. If you drink every night, you could gradually stop it (it took me more than 6 months to do this).
2. Walk if you can, or commute instead of using your car. Luckily I don't have a car. I have a motorcycle where I spend only about PHP 150.00 a week for the gas.
3. Cut down your mobile phone expenses. Good thing there are lots of unlimited calls and text promos in the Philippines these days, these promos could help cut down your mobile phone expenses.
4. Limit your online time- in this age of Facebook, Instagram, Twitter and other social networks, most of us spends so much time online. Posting photos, comments, likes, etc... time we could have spend on more productive activities.
2. Don't borrow money to buy consumer goods- As much as possible don't borrow money just to buy a new cell phone. Unless you want to use that cell phone for an e-loading business which could be your additional source of income.
3. Don't buy on installment basis - As much as possible don't buy on installment basis. Specially if the things you are buying is not really needed.
   
   I  knew a couple who brought a brand new TV on installment basis just because their relative who is also their neighbor bought a new TV. This relative however bought the new TV because their old one is already malfunctioning and though it was repaired, the problem keeps coming back. The couple's old TV however, is working just fine.
   
   Personally, TV is not a necessity for me. I've got my laptop which I use for my work and to relax, watch some movies. However, I bought a motorbike worth PHP 64,000.00 (in cash) on a three-years-to-pay contract. My monthly amortization was, PHP 2,700.00. plus about PHP 600.00 a month for the gas. So my monthly expenses was PHP 3,300.00. I used to commute to work everyday. I spend at least PHP 80.00 a day. It does not include if I take extra trips during lunch time. In a month I spend at least PHP 2,400.00 but now that I have paid it in full, I spend only PHP 600.00 a month for the gas. So I am now saving at least PHP 2,000.00 a month.
   
   The point is, buy only on installment basis, if you need it for a business or you could earn from it, or it could save you money in the future. 
4. Don't borrow money to pay for your loans - this is one of the most dangerous thing to do when you have debts, but I have seen some people very close to me did this and keeps on doing this. Borrowing money to pay for another loan will get you nowhere but into a deeper and deeper whole of debts. 
5. Look for additional source of income - perhaps a common problem, specially for Filipinos, is under-employment or people are not earning enough. A common complain of full time employees is their salaries is not enough. I know it's true, I've been through that as well. For so many years I used to earn less than PHP 10,000.00 a month (about US$ 220.00).
   
   Even I was single at the time, it was hardly enough to meet my daily needs until I learned to simplify my lifestyle. Still I used my skills and knowledge in computers to earn extra income. I do computer repairs, tutorials, and look for some ways to earn online.
   
   For those who's not really into online earnings, there are so many ways you can earn extra cash in your extra time. Buy and sell some goods, or join those direct selling companies that allows you to sell their goods with 30 days to pay. Or you could turn your hobbies into business.
6. Spend your time on activities that could earn you money - I'm still guilty on this part. This is the answer to item no 4 on other ways to simplify your lifestyle. This doesn't mean though that you have to work all the time. Spend some time also studying or honing your skills 

I admit I still struggle on some of the points that I have listed here, I practice most of them and I try to practice all of them. These are just some of the things I learned from the teachings that I got from Truly Rich Club and the books of Bo Sanchez (tell you about this fantastic person soon).

Thanks for reading and may you start achieving your own financial freedom.