We cherish our freedoms.
The rights given to us in the Constitution are what makes our country both unique and a good place to live.
But there’s one freedom you may be missing out on — financial freedom. Financial freedom is when you have enough money to pay the bills and live life as you choose, without worrying about whether you can pay next month’s rent or mortgage payment.
Just as our forefathers fought for liberty, achieving financial freedom requires dedication and effort. But here at CommonWealth One, we’re here to help ease the burden. Here are a few steps you can take to get yourself closer to financial freedom.
There are two things you should focus on that may be preventing you from reaching financial freedom: consumer debt and “lifestyle inflation.”
Consumer debt includes your credit cards, auto loans and other big-ticket purchases you’ve made, as well as those daily coffees that you put on your credit card and never paid off in full. Anywhere that you’re borrowing money to get something that won’t increase in value falls into this category.
Therefore, the first step is to reduce your consumer debt. You can use the snowball method or just choose your debt with the highest interest rate and work on getting it to $0. This might take some time and you may need to figure out how to bring in more income, but it’s worth it!
Lifestyle inflation is purchasing goods based on the mistaken belief that you need them. In too many cases, as your income increases, your expenses also increase. Lowering your lifestyle expenses helps you reach financial freedom by lowering your expenses to leave you with more money to save.
Once you’ve lowered your debt (by aggressively paying it off with money you’re saving by lowering those lifestyle expenses) and you have a solid financial base including an emergency fund, you should start investing. Investing smartly can grow your money so you have fewer issues to worry about.
Need more details on any of these steps? We’re here for you! CommonWealth One offers a wide variety of free educational resources.
In addition, you’re more than welcome to call or stop by a branch to make an appointment with one of our certified financial counselors or investment professionals to talk about anything from budgeting to your credit score to your retirement plans and goals.
We hope that by this time next year, you’re celebrating not only our national independence but also your progress toward financial freedom!
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