A startling 63% of U.S. households cannot pay a $400 bill with cash, according to the U.S. Bureau of Labor Statistics. With numbers like that, it is easy to see why money causes so much stress for so many families. To help you avoid some of that stress, let’s examine five ways to unlock financial freedom that don’t require a second job or being born rich.
- Avoid Lifestyle Creep. Anytime you get a raise at work or get a large sum of money, don’t immediately spend it. Instead, pretend like you never got the money and put it into savings or pay down debt. Both can help you achieve financial freedom.
- Consider Your Time. Instead of looking at a purchase in terms of dollars, consider how much of your time is needed to buy it. Is a new car that costs $40,000 worth 2,000 hours (83 days) of your life (at $20/hour)? This subtle shift can be quite eye-opening for many people.
- Apply the 24-Hour Rule for Non-Essential Purchases. First, set a threshold for your 24-hour purchase rule. Let’s say it’s $50. Now, anytime you’re about to buy something that costs more than $50, wait 24 hours before making the purchase. That includes in-person and online retailers. Waiting just a day can help you avoid spontaneous purchases.
- Set Up Automatic Savings. Using Online Banking, set up automatic transfers from one account to another every month. Or talk to your employer about automatic deposits. Saving just 5% of your income every month can add up fast and help unlock financial freedom.
- Safeguard Your Career. Job security is a wonderful thing that can help maintain and unlock new financial freedom. At least once a year, take a class or attend a seminar that helps boost your resume and makes you indispensable at work.