Financial freedom formula is very simple which means you only have to make a good amount of savings from the total amount of earned money or income.
Assessment of total income:
To apply the formula in your life you need to take a few steps, which include: making an assessment about the total income from the entire possible source, such as: salary, increments, bonuses, business ventures etc. you should have a list of both the earned & other passive sources of income. Passive incomes refers to the obtained flow of money for which you do not need to pay any effort or any active participation, for example: interest obtained from the saving funds made in the bank or any kind of investment in the mutual funds for which you will be paid with interest monthly or annually. If you are property owner & rent it to someone else, the rental amount f money is also a source of passive income.
The assessment about the amount can possibly be saved:
Then you have to think about the about the money you can save every month after dealing with all the expenses. The saving mostly needs the mindset of the person to have savings for him or herself. One must think about the needed expenses he or she must have to make from the amount of total income. The concept of saving comes only then when all dealings with expenses are accomplished. But to have the saving effort work effectively one has to make the mindset about saving money before the expenses. One can set aside a certain amount of money from the total amount of money earned for the intention of saving.
Save the money before spending:
Before saving we have to think about the monthly spending which is must for the person. For example the repayment charges of personal loans, paying monthly bills or taxes. When the must spending amount are set aside, then we have to think about on which area we can downsize the amount of spending in our day to day life & work accordingly. It is a very good practice for a person if he or she sets aside some money for saving before making the spending.
Assessing the spending:
There is another financial factor which can help you to obtain financial freedom & that includes the assessment about spending. There are lots of areas where one can downsize the amount of spending every month, such as avoiding taking any new personal loan. Appropriate & effective mindsets can make one able to have up to 15% of saving from the total amount of income. One can think about making tiny steps as it becomes tough for someone to subtract some amount of expenses for the day to day life.
Through taking the steps you can have your financial freedom formula completed. Such procedures will help you to get rid of debt of personal loans or any other liabilities as then you have the ability to pay them faster.
A firm & steady determination to have the financial control, repayment of personal loans & obtain the desired financial freedom will help a person to apply the financial freedom formula in his or her day to day life.
Elina Smith works as a financial writer for one of reputed finance provider who deals in various finance products like debt consolidation, credit cards, and personal loans for any credit score people and more.