Can anyone achieve financial freedom?

If we are going to discuss whether or not anybody can achieve financial freedom we should probably establish just what that means. There is a widespread belief that financial freedom and wealth are the same thing and if this is the case then it would probably be fair to say that not everybody can achieve that. However I don't believe that you necessarily need to be wealthy to be financially free. A better description is that you don't have to worry about money. If this is your definition of financial freedom than that is something that everybody can achieve.

The key to financial freedom is having living expenses that are lower than your income. As long as this is the case you are financial free. That's why it's so important to keep good track of your expenses and income! Wealth is thus not a good definition of financial freedom, there is no amount of money that you can't spend. You see it happen all the time people with large incomes who end up broke because they have spent too much money. On the other hand you can also find people who earn quite low incomes but who also keep their expenses low and they are able to achieve financial freedom.

Clearly the key to financial freedom is to keep your living expenses under control. Obviously the level at which you spend will largely depend on your income. The key is that you have to spend less than you make. The best advice is the old one about paying yourself first, every paycheck you put ten percent of it away as savings. Of course this is meaningless if you are racking up huge amounts of debt at the same time. One of the keys to being financial free is to make sure that you get your debt under control.

There is simply no way that you are going to be financially free as long as you owe money to somebody else. The biggest issue that you are going to face in this regard is credit card debt. If you are not paying that off in full each month then you are spending more than you can afford to. There is some debt that is good and helpful like your mortgage. Some will argue that you can't be financially free until that is paid off. I would say that as long as you can comfortably make the payments with in your budget you are doing fine.

The other big key to becoming financially free is to have a source of income other than your job. For most people that is money from their investments. As long as you are saving money off of each paycheck you are going to want to put it somewhere that will earn you a good return. There are lots of options here but you want to make sure that you are not taking risks that are too big.