Updated: November 28, 2020
Financial freedom is a dream that everyone has, but it is a goal that many find hard and difficult to achieve.
There are many reasons why it is a challenging journey for anyone; however, with proper financial education, self-discipline, and sound planning – one will be able to reach it within their lifetime.
It is always the beginning that is the most difficult; but it is the things that you learn and do at the start, which lays the foundation of your wealth.
It is like cooking a meal – the exciting part is when you turn on the fire and start assembling your dish; but before doing so, you must first do the uninteresting part of chopping, slicing, and preparing your ingredients.
So how exactly do you start your journey towards financial freedom?
What are the things that you need to chop, slice, and prepare – before you can work towards your financial goals such as buying that dream house, or living a comfortable retirement?
It all begins with studying your cashflow.
If financial freedom is your destination, then you first need to know where you are or risk going in the wrong direction. This means tracking your expenses and also knowing how much income do you really get to take home.
The foundation of wealth is in having the discipline to spend less than what you earn.
After studying your cash flow, you must create a monthly budget to follow, which helps you in two ways – first, it reinforces money management to become a habit; and second, it creates a surplus of funds that will, later on, become your seed for investments.
When you’re going on a long road trip, you can’t just start the car and drive away. It’s important to make sure that it will be a safe journey.
You’ll check your tires and engine, the traffic and weather, and of course, ensure that the one who will be behind the wheel had enough rest and sleep.
In your journey towards financial freedom, you need to protect yourself against financial disasters – and this is where the importance of having an emergency fund, health insurance, and life insurance comes in.
Financial protection comes next.
A lot of people immediately invest without having enough funds to cover unexpected expenses such as medical emergencies. This often leads them to prematurely liquidating their investments, or worse, going into debt.
Speaking of emergencies, having health insurance is a great way to mitigate your medical expenses and hospital bills. Plus, having one will encourage you to seek a physician immediately when you’re not feeling well.
I’ve met a lot of people who self-medicate because they don’t want to pay for doctor’s consultation fees, which I find imprudent.
Life is uncertain, and accidents happen when you least expect it – that’s why it’s best to protect your family from a financial disaster by acquiring life insurance. Shop around for policies, play around your budget, and make a way to afford adequate coverage.
If you’ve done everything right, you’ll be financially secure and practicing healthy money habits within a year or two; and when this foundation has been properly set, you can now start saving and investing for your future.
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hi fritz,please recommend for a good health insurance,te insurance or life insurance.
Thanks a lot Mr. Fitz for this another magnificent article. Question lang po, i bought two life insurances with riders i am planning to pre-terminate one and instead put the amort. in stocks. What do you advise?
Best regards,
Nice article Sir Fitz.. Very informative in its simplest explanation on taking the road to Financial Freedom! More power to you Sir!
Hi Fritz, So it is advisable to get Health insurance and Term Life Insurance?
Thanks!
Denis
Hello! Just sharing that I was able to get term life insurance with critical illness coverage with Sun Life Assure. FYI, I’m not selling this.
I’m still looking for an HMO for my family but so far they all seem too expensive for us. My husband and I are self-employed. We might just get that PNB card for medical emergencies.