How to achieve financial freedom and live the life you want

Beacon Financial Education aims to help people with their financial well-being and provides individuals with the information they need for financial control, stability and simplicity.

Becoming – and staying – financially independent means something different to a teenager or a student than to someone in his / her 30s starting a family or a retiree.

One thing they all have in common: it all revolves around achieving financial goals, and to be able to live the life you envision for yourself – and your loved ones. After all, no one wants to be a slave to their finances.

What does financial freedom mean to you?

The first thing you should know is what financial freedom means to you. Hence, what do you want to do with your life? What are your goals? Where do you want to be in five, ten or thirty years’ time? Let your mind wander about this. Take your time to really think about it.

It could be you want to overcome living from paycheck to paycheck, the first step towards financial independence. Maybe you want more free time, to work less, or take a sabbatical. Is a basic retirement good enough for you or are you looking forward to a dream retirement?

Self-discipline and personal responsibility

Achieving financial freedom and independence requires a certain level of self-discipline and personal responsibility. A 2018 Northwestern Mutual research showed that 1 in 3 Americans have less than 5.000 USD in retirement savings.

Many feel underprepared for and concerned about their retirement, yet do not take the necessary steps to change their personal forecast. A proper plan can help to relieve financial stress and will assist you in achieving your financial independence.

Why do you need a financial plan?

We are often focused on the NOW. Our schedules are busy enough as they are. We have an idea of where we want to be in the future but rarely do we take the time to sit down and research how we can achieve that future image. The numbers are there to prove it.

So, why do you need a financial plan? Well, if you don’t know where you are, and more importantly, if you don’t know where you want to go, how will you be able to get there at all? It is crucial to write down your financial objectives, so you can determine what you need to do to achieve them, and whether they are at all feasible.

It is also important to know what you are willing to do to reach your goal. Are you prepared to put a certain amount of money aside each month? To tone down your spending? Are you a risk-taker or do you like to play it safe? Would you like to invest your money, or would you prefer to put it in a savings account? Map out your way to financial freedom!

One in five Americans (21%) have NO retirement savings at all*

Baby steps supporting your budgeting goals

Even if you do not know yet where you want to be in X years, you can already start budgeting for your desired future today. After all, you can always redirect later on, but at least you will not have wasted precious time in which you could have laid some groundwork for later.

Break up your financial objectives into small, achievable chunks, so it is easier to manage, and you feel less stressed about your financial future. Some pointers to get you started with your personal financial strategy:

1. Net worth

Find out your personal net worth. How much do you earn, what assets do you have, and what liabilities do you owe?

2. Pay off your debts

Do you have credit card debts? Pay them off as soon as possible or make a payoff plan. Use credit cards only when there is no other alternative.

3. Schedule regular transferals

What amount of money can you start putting aside weekly or monthly? Take action and schedule regular automatic transferals immediately.

4. 401(k) / IRA

Take a look at your 401(k) or IRA. Does it need a review or changing?

5. Saving possibilities

Where else can you save money? By changing your utilities or phone company? What about your insurances - are they up-to-date? Are there cheaper options?

6. The non-essentials

Spend less money on “non-essentials”. Stop spending money on things.

Of course, these are just some of the things you can do, but it’s a start.

Nearly half (46%) of adults have taken no steps to prepare for the likelihood that they could outlive their savings*

Talk to a financial advisor

With the Internet and Google at your disposal, you will probably be able to set up a proper draft of a financial plan yourself. But there will always be things you have not considered or thought about. Especially when you are – or have been – an expatriate.

After all, being an expat adds an additional layer of challenges to making a plan for the future. Think of pension plans in different countries, multiple bank accounts, exchange rate differences, inflation, depreciation of your foreign assets, et cetera.

And of course, we have written about it on numerous occasions, people with a U.S. nexus also have FATCA (Foreign Account Tax Compliance Act) to take into account.

An independent financial advisor can help you prioritize your sub goals and assist in setting up an investment portfolio that matches your personality, takes your personal circumstances into account, supports your financial goals and complies with the tax regulations of the country you live in and the country you’re from.

Failing to plan is planning to fail 

Start planning today and experience the feeling of (living towards) financial freedom! 

*2018 Northwestern Mutual research

If you have any questions or want to know how you can achieve financial independence, reach out to Beacon Financial Education to set up a free financial consultation with an independent financial or investment advisor.

Beacon Financial Education does not provide financial, tax or legal advice. None of the information on this site should be considered financial, tax or legal advice. You should consult your financial, tax or legal advisers for information concerning your own specific tax / legal situation.