Financial Independence, Free from Financial Temptation

What is occurred in your mind when you asked to define financial independence?

In a survey conducted Citigroup Asia Pacific, the majority of women define financial independence as “the ability to buy what they want, whenever it is desirable”.

In fact, financial independence is not simply a matter of affordability. Financial independence generally includes five terms. Free from financial temptation ourselves, free from financial dependence on the people who love you, free of dependence on creditors, free of dependence on the job as an employee, and free from financial problems.

For starters, we have tips on getting the first three steps financial freedom.

1. Financial Freedom from Self Temptation
Step 1: prioritize the needs rather than wants, focusing on function rather than prestige, and be aware and avoid influence of friends or your environment.
Step 2: identify your income, how to manage your money, watch your expenses in detail, and record and evaluate your budget regularly and thoroughly.
Step 3: start the habit of saving now.

2. Freedom from Financial Dependence People who love you
As social beings, we are not only thinking about our personal needs only. It is similar with the financial terms. There is a budget for children, husband / wife, parent, in-laws, as well as other relatives.

Step 1: Consider the frequency and amount of your income. First of all, focus on your regular income. Manage and organize your expenditure with reference to fixed income. If there is no fixed income (ex: achievement allowances, bonuses, or THR), we suggest that you divide the income is not fixed is to be 60:40. Sixty percent savings, the rest can you spend.

Step 2: Live a lifestyle that suits your financial capabilities. Do not let the peg is greater than the pole.

Step 3: Begin attempt to invest. However, before investing you should recognize the need, the investment period, investment objectives, financial and capacity. Review and understand them first and forms of investment risk you wish to take.

3. Freedom from dependence on Creditor
Have a financial plan. Make a list that includes long-term financial plan and your short-term. There are four points that need to be studied in compiling this list: your loan payment plan, optimizing the return on money, efforts to protect the financial future, and attempts to balance the need for short and long term.

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