April is Freedom Month, a time when we celebrate our democracy and all of the freedoms it provides. However, real freedom can take many forms, including the capacity to live a life unburdened by financial worries. Money doesn’t buy happiness but it can afford the freedom to live the way you want. However, if dubious finances are keeping you from living your best life, there are a few ways that you can enhance your financial freedom.
“Financial freedom simply means never having to worry about putting food on the table or being able to afford a roof over your head. It means being able to weather life’s setbacks without taking on the extra burden of worrying about how you’ll make ends meet,” explains James Williams, Head of Marketing at short-term lender, Wonga SA.
So, if you find yourself living from hand to mouth without a financial cushion to see you through the hard times, Wonga has a few simple tips for improving your financial freedom.
- Take a long, hard look at your finances
It’s surprising how few of us really know where our money goes each month. Therefore, the first step to financial freedom is to take control of your finances by understanding exactly how much you are spending and what you’re spending it on. Be sure to keep track of your spending so that, at the end of each month, you can see where you’re overspending and identify opportunities to save. If you have access to a smartphone, there are a number of great, free apps to help you track your spending such as 22seven or MoneySmart.
- Set achievable financial goals
Once you’ve identified areas where you may be overspending, you will be able to set yourself some achievable financial goals. This might include reducing your spend on non-essential items like dining out, clothes or cosmetics so that you can put more into savings or focus on paying off any debts.
- Build an emergency fund
Financial freedom means being able to negotiate life’s setbacks without worrying about making ends meet. Therefore, it’s important to build an emergency fund. This should consist of enough money to pay off your basic living expenses for a period of at least three months. These costs might include your rent or mortgage payments as well as food and utility costs or any other essential items that you require to get by.
- Plan for the worst
Planning for a rainy day doesn’t only require having access to an emergency fund, it also means buying yourself a little extra protection or insurance. This might be health insurance or medical aid to help you negotiate illness or injury, coverage for high cost items like cars or property, or life insurance to protect your loved ones when you pass on.
- Increase your financial IQ
Attaining financial freedom is not about how much you earn, it’s about having control of your finances and making your money work for you. There are many programmes that aim to promote financial literacy, including the Wonga Money Academy. This online academy has a number of video tutorials that provide guidance on the four pillars of financial literacy including debt, saving, budgeting and investing. This will help you understand how money works, so you can make the right choices when it comes to managing your own money and creating a secure financial future.
- Plan for your retirement as early as possible
Financial freedom doesn’t only apply to the here and now, it also means putting the processes in place to secure your financial future. If you haven’t done so already, start putting money into a retirement fund each month so that you can retire in comfort and aren’t forced to work or become dependent on others during your golden years.
For more financial information and advice on how to master your money visit the Wonga Money Academy. #MasterYourMoney