Achieving financial freedom is a goal for many people. It generally means having enough savings, investments, and cash on hand to afford the lifestyle you want for yourself and your family and a growing nest egg that will allow you to retire or pursue the career you want without being driven by earning a certain amount each year.

1. Review and Update your Financial Plan

Having a plan for your money is arguably one of the best financial decisions you’ll ever have. However, just creating an initial plan isn’t enough. It’s equally important, if not more important, to make sure you’re reviewing and updating your plan regularly.

Your financial plan is there to help you assess, plan, and improve your present and future financial life. It takes a snapshot of your current financial picture along with your goals to help you create an action plan so you can navigate financial decisions with ease.

2. Invest in Good Money Habits

Financially successful people possess certain money attitudes or behavioral patterns that help them become what they are and achieve money success. And no, these are not just secret strategies or investing tips but adjustments and tweaks in one’s own behavioural and emotional patterns that help secure financial future. Given below are eight such money habits and traits that achievers possess. Imbibe these and secure your own future.

3. Set Financial Goals that are meaningful

Setting goals is the first and arguably the most important step to financial success. Without goals, you aren’t able to track progress and celebrate milestones. When forming goals, it’s important to make them “S.M.A.R.T” goals: specific, measurable, achievable, relevant and time-bound. 

As you can see, financial goals can be big or small what matters is forming this habit as soon as you can so you can hold yourself accountable towards your success! 

It’s also important to make sure that you are setting both short-term and long-term financial goals. By having both, you’ll stay motivated while focused on working towards your financial future.

4. Periodic Portfolio Reviewing

Monitoring where your investments and you stand on the path of achieving your financial goals is crucial to know if you are on course. In case you are not, changes may have to be made to the portfolio accordingly.

5. Find passive income to improve your Income 

If you want to build wealth and pay off debt faster, you have to find ways to make more monthly with passive income. Passive income is essentially money you make residually through endeavors with minimal routine upkeep. A few examples of passive income include rental properties, dividends from stocks, or a side business. 

How does this work? With the examples listed above, you only invest time and money upfront to set everything up. Then you can expect to make a certain return from those investments for the short term or long term. 

6. Build an Emergency Fund

An emergency fund cannot be built overnight but is done gradually. Set aside a particular amount every month in a different bank account. Soon it will grow into a considerable corpus that you wish to have. Say, you have decided to have an emergency fund of Rs.1 lakh. In this case, you can set aside Rs.5,000 or Rs.10,000 every month to accumulate the corpus you need. It is fine to even cut down on your investments to build this amount.  

7. Pay off credit cards in full 

It’s time to forget the myth that carrying a balance on your credit card is better than paying it off in full each month. To understand why, you have to know what factors impact your credit score. 

According to Experian, payment history is the most important factor in determining your credit score. The second most important factor is your credit utilization. The lower your utilization rate, the better your credit score. That means you should try to keep your utilization ratio (or how much credit you’re using) as low as possible. 

​8. Bye bye Bad Debt

Avoiding bad debts and loans is another habit you must adopt. These ‘bad debts’ include personal loans and credit card payments, both of which can erode your financial worth in the name of instant gratification. To avoid depletion of your savings, beware of these loans.

9. Talk openly about money with your Friends and Family

Have open and honest money conversations with your friends and family is a great way to continue learning new money management approaches and money tips to improve your literacy and overall motivation. It can also be an extremely great way to get over any existing fears about money or taking those next steps to start working on your financial goals.

The more you talk about money and financial management with friends, or an accountability partners, the more confident you will be in progress you’re making to better your financial future.

10. Risk-Proofing Finances

Adequate insurance and an emergency buffer are the key components by way of which you can avoid risks. Securing insurance helps ensure that you, your loved ones or dependants and investments are protected.

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