Let (Financial) Freedom Ring!

You can help secure your financial independence by incorporating these four tactics into your planning process.

Adam Young Jul 4, 2018

On Independence Day, we celebrate with parades, barbecues and (of course) fireworks. But what about financial independence? Now that’s something to truly celebrate, assuming you can achieve it.

Financial freedom is more than just an increase in your net worth or income. It also means that you have the ability to control and manage your impulse purchases and expenditures. It means you can differentiate between wants and needs. It takes patience and persistence, but the long-term benefits can be massive.

Here are four strategies you can use to declare your financial independence:

1. Carefully balance reality with possibility.

Especially with large purchases, consider what’s really happening in your financial life over what possibly could happen. When you focus on financial possibility, you may begin stretching what’s really happening in your wallets, and end up feeling overstretched.  

This will sometimes happen during the homebuying process. Instead of the buyer looking for what they really need in a home, which might be a comfortable, two-bedroom townhome for a lower price and lower monthly payment, they choose to get a place with extra bedrooms they possibly might use and decide to max out their pre-approved loan amount — which can lead to a heavier burden in payments, maintenance and upkeep. 

By focusing on what’s really happening, you can avoid hasty financial decisions, and have more cash available each month that is not tied into a mortgage payment, which can later be used to give you freedom to travel and engage in family activities.

However, that doesn’t necessarily mean you should give up on your dream home, or live somewhere you don’t feel safe or secure. Shop around to determine which home loan meets your needs, but be sure to not overborrow on what you really need.  

Every day, Zions Bank mortgage experts help homebuyers balance their realities with their possibilities. Use our online directory to locate a mortgage officer near you.

2. If your household has more than one income, save the lesser.

In today’s world it is very common to find two spouses earning two separate incomes. In this scenario, greater financial freedom can be achieved by using only one income for day-to-day expenses, and strategically using the other income for saving and other retirement saving opportunities.

Doing this is advantageous for multiple reasons. For example, it can prevent what’s called lifestyle creep. That is, if you ever need to transition from two incomes to one, your lifestyle will already be tailored to one income, rather than two, and the transition will potentially be more stress-free.

Another way to attain more financial freedom is to use various savings vehicles to help build your wealth. Be sure to talk with a financial adviser, and learn about how you can use money market accounts, certificates of deposit, and other investment strategies to help your money grow with the power of compound interest.

3. Pay with cash.

Some personal finance gurus like Dave Ramsey say that we spend more when with plastic than when we use cash. In fact, one of the most common pieces of advice for those trying to stick within a budget is to pay with cash rather than using credit. Yet this strategy remains difficult to grasp and is rarely used — especially with the rise of digital payments. 

Using cash feels incredibly different than using a plastic card or digital device for transactions, and it’s a proven way to change your spending habits and increase your ability to save more money each month. 

4. Give your money to others.

Generosity is an important step towards overall happiness and contentment. It brings deeper fulfillment, joy, and meaning to life than what is often sought in financial purchases and personal gain. By giving our money away, we remind ourselves of how much we already have and how much we can offer others.

And while it seems entirely counter-intuitive, one of the most important steps we can take to discover more financial freedom is to embrace the habit of giving some away to allow others the opportunity to grow, and learn how to discover financial freedom for themselves.

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