The rich ruleth over the poor, and the borrower is servant to the lender. Proverbs 22:7
We just celebrated another Emancipation Day when we were reminded of August 1, 1838, when thousands of ex-slaves gathered at town centres and churches in the British Caribbean territory and erupted into joyous celebrations after hearing the final words of the Emancipation Declaration, affirming their full freedom from slavery.
Just about everybody wants to become financially independent, so why do so few people get there?
One of the secrets to attaining financial independence is that it doesn’t usually “just happen.” It starts with a detailed plan and a willingness to commit to that plan.
What does financial freedom mean to you? I gather you may define it as finding yourself in a financial position where work is a choice. Simply put, freedom means you are in control of your finances and your life choices.
Many persons are trapped in a perpetual cycle of working and living pay cheque to pay cheque and feeling overwhelmed and lacking any sort of control in their lives. If you had an available alternative, would you not rather choose that path?
Additionally, persons face financial burdens because of making desperate choices. This in most instances is caused by living above your means and trying to impress friends and family. Living in an apartment where you are struggling to meet monthly payments and using credit cards to supplement your already small income will certainly erode your wealth and make you feel imprisoned.
To get out of this prison cell or, better yet, to avoid it entirely, all you need is a plan you can use to keep from getting tricked into doing things that create financial imprisonment. It might seem difficult to many, but if you are focused, self-disciplined, and you make a conscious effort, you can do it.
Dave Ramsey is one proponent of living a debt-free life. Through his Financial Peace University classes and books, he coaches and shares seven baby steps for getting out of debt and building wealth.
- Baby Step 1: Beginner emergency fund
- Baby Step 2: Pay off all debt (except the mortgage) using the debt snowball. Basically, you order your debts from smallest to largest and pay them off in that order. By doing this you can optimise the effect of getting quick victories by paying off the smaller debts faster.
- Baby Step 3: Put three to six months of expenses into savings as a full emergency fund.
- Baby Step 4: Invest 15 percent of your household income into retirement pension plan.
- Baby Step 5: Begin college funding for your children.
- Baby Step 6: Pay off your home early.
- Baby Step 7: Build wealth and give.
Source: DAVE RAMSEY’S COMPLETE GUIDE TO MONEY – The Handbook of Financial Peace University
Whether you are from uptown or downtown, an employee or self-employed, a university graduate or not, you have the same ability to create perpetual wealth for yourself and your family. The solution to avoid financial imprisonment is simple and not biased to who you are.
Financial freedom is going to look a bit different from individual to individual. The common denominator is the control and freedom to choose to do what you wish. Here are some considerations defining financial freedom.
Freedom for one individual might mean you don’t have to go to work anymore, or you can take a lower-paying or non-paying job to do something you love. It might mean knowing that you always have a roof over your head.
While another individual might think it means that you own your house and cars outright or you don’t have debt. That might be what you need. Others might say they need to know that they have a certain amount of income coming in and are not reliant on others so that they can travel the world without worrying about paying bills.
Still others might want to fund compassionate ministries initiatives, do missionary work, or give money to help others. There are no wrong answers, but we do need a destination. Think about what it means to you to be financially free. Once you know what it means to you, it’s time to calculate how to accomplish it.
