Finances are among the most important aspects of our daily lives. There is very little you can be able to do without money. Giving your children a quality education revolves around money, living in a good neughborhood requires money and even spicing up your love life with a surprise outing involves finances. Finances therefore are at the core of our lives.

Financial freedom is not about having billions and millions of dollars in the bank neither is it about settling for a high profile job. One may wonder why the rich who earn much more end up in bankruptcy while those who earn pea nuts keep thriving and improving their lives. Financial freedom is all about gaining control over your finances. The secret is simple.

Spend less than you earn

This may sound cliche but spending less than you earn is all there is to do if you want financial freedom. Many financial advisers tend to explain this simple concept using technical terms but at the end of the day the concept remains.There is no wisdom in leading an overly luxurious lifestyle if your earnings cannot support it. Handling money requires self-discipline. This self-discipline is what tells you how much you can afford to spent out of the much that you have earned.

The key to financial freedom is being able to save at least a third of all your earnings. Saving is a great way to stay clear of debts. Savings cater for a rainy day. It  cushion you from acquiring emergency debts which prove to be a headache in the long run.While still on the topic of debts, it will be worth to note that not all debts are bad. Debts that are directed to a worthy investment that will in the long run bring more earnings are actually good debts. However, debts which are acquired for the sole purpose of spending are bad debts and are a bar to financial freedom.

Save wisely

Saving in today's world is not as simple as it was before. Previously, all that one needed to do was deposit money in his bank account and let it amass interests over the years.Today, most banks do not offer as much interest as they did traditionally. Coupled with inflation, there is a possibility that money that sits idle in the bank for years may end up losing value and therefore acquiring losses instead of gains. This is so because the rate of inflation is higher than the interest rates being offered by the banks. The secret therefore is to save as much as you will need for a certain project then take it out, invest it wisely and get it earning you some more. If you follow these simple steps, you will be smiling your way to financial freedom.

The Barefoot Investor: Five Steps to Financial Freedom in Your 20s and 30s
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