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How to Achieve Financial Freedom

December 18, 2023
Read Time:
5 mins
Author:
Inovayt

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If you’re wondering how to achieve financial freedom, you’re definitely not alone. While many of us dream of an early retirement and financial freedom, making that dream a reality is challenging. If you’d like to reach financial freedom, our blog discusses the steps you can take to achieve it.  

What is financial freedom?

In this blog, when we talk about financial freedom, we’re referring to the act of generating enough passive income to cover your life expenses. Someone who is ‘financially free’ is free from debt, has money in the bank and is actively investing in their future. This means you don’t have to choose a job based on salary or worry about replacing your car if it breaks down (sounds like a dream, right?!).  

How to achieve financial freedom?

Achieving financial freedom is tricky, but by enlisting the help of an Inovayt financial advisor, you’re setting yourself up for success. Our financial planners tailor solutions to match your financial and lifestyle goals. Once a financial planner understands your objectives, they can provide strategic advice that covers:

  • Superannuation and investment advice
  • Risk insurance
  • Cash Flow planning and budgeting
  • Structuring
  • Tax planning
  • Retirement planning

Here are some examples of what will be covered in your meeting with a financial advisor. 

Find your ‘why’

Financial freedom looks slightly different for everyone, which means your steps to get there will be unique.

First and foremost, your Inovayt financial advisor will help you understand your ‘why’, as the most important part of achieving financial freedom is identifying why you want to achieve it. 

From here, we work with you to identify your financial objectives, including short, mid and long-term goals. Finally, our team will help you build a tailor-made plan to achieve your financial goals, including target goals along the way to keep you on track. 

Make a budget

No matter how much you earn for a living, when it comes to budgeting, some of us simply find it easier than others. However, creating a budget is a highly beneficial tool for managing your money and seeing where your incomings and outgoings are being allocated. Your Inovayt financial advisor will work with you to set up a budget using our free budget calculator tool. This will help you better understand your financial situation and give you the knowledge to make empowered financial decisions. 

To learn more about budgeting, read our blog.

how to achieve financial freedom

Create your emergency fund

Another crucial step on the road to financial freedom is creating an emergency fund. Many people know what an emergency fund is, but only a few have it set up correctly. Setting up your emergency fund is something your Inovayt financial advisor can work with you on. Generally, your financial advisor will encourage you to save between 3-12 month’s worth of income

Eliminate debt

Eliminating debt is one of the best ways to achieve financial freedom. Tackling your debt early in life enables you the opportunity to create wealth and set yourself up for the future, allowing you to spend more time doing things you’re passionate about. Paying off your credit cards and other loans will fast-track your way to financial freedom. 

Options such as debt consolidation loans are all available to help you pay down your debt. Check our debt consolidation calculator here to see the potential benefits.

Invest in your retirement

Investing in your retirement and growing your nest egg means you’re setting yourself up for the future you want. Our Inovayt financial advisors are extremely knowledgeable about retirement planning, including all aspects of your superannuation. They will work with you to put you on track to achieve your desired retirement.   

Consistently look for a better price

While it might not feel like it makes a difference, shopping around for better loan interest rates, gas and electricity rates, internet packages, etc, can save you money in the long run. Our financial advisors can gather information in one place for you, helping you identify which product gives you the best value for money. 

Automate your savings 

Sometimes, it’s the little things that can make a significant difference. Consider setting up a direct debit after your pay goes into your account, which takes an amount straight to your savings account. This will help you add to your savings without manually transferring money. By debiting the money as soon as it comes in, it’ll never reach your hands, which minimises the temptation to spend. 

If your employer allows it, you may also be eligible to have money paid directly into another account. Salary sacrifice options may also be available to you. 

Plan for big expenses

While your emergency fund is for unexpected expenses like vet bills, unplanned doctor appointments, etc., it’s a good idea to account for significant expenses like holidays, new cars or other things that aren’t generally part of your budget. Setting goals with a financial advisor is the best way to plan for these expenses. 

Set yourself up with investments

There are plenty of investment opportunities that can help set up your future. From real estate to stocks and even cryptocurrency, the options for investing are substantial. However, investing is a long-term process and shouldn’t be done without advice from a financial advisor. 

With investing, there’s no one size fits all, and you will need to consider your investment goals, level of risk tolerance, diversification, and investment time frame to determine what and where to invest.

Whether it’s the stock market or property, speak to an Inovayt financial advisor about how you can set up investments for your future.

Live below your means

While it might not always be feasible, living below your means is the best way to achieve financial freedom. It doesn’t mean living off two-minute noodles forever. Instead, consider what you’re buying and if it’s something you could do without (e.g. a new pair of shoes).

Enlist the help of an Inovayt financial advisor

When it comes to achieving financial freedom, an Inovayt financial advisor is here to guide you. We’re with you every step of your financial journey and will continue that care long after. If you find yourself wondering how to achieve financial freedom, we are here to assist you in achieving financial freedom, reach out to us today.  

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