10 Things Holding You Back from Financial Freedom

Financial freedom is a point where you are debt-free, have ample savings, and have the freedom to decide where your money goes, instead of letting that decision be dictated by debtors. Though financial freedom might look different for everyone, it should be something we all desire.

Unfortunately, the journey to financial freedom is rarely without obstacles. When the going gets tough, do you know what is holding you back?

Here are 10 common challenges that hold individuals back from financial freedom, and how to overcome them.

 1) Lack of Knowledge
 
Without a solid understanding of personal finance and how money actually works, it can be near impossible to find financial freedom. Money doesn’t have to be complicated, but a basic understanding can do you wonders.

Luckily, if you feel like you have room to grow in your knowledge of personal finance, there are endless resources for you. You can read personal finance books, blogs, talk to a financial advisor, or even take classes. Having knowledge about personal finance is the first step to become financially secure.

 2) Fear of Commitment
 
Some people, though they have a good understanding of money, are afraid to commit to trying to gain financial freedom. These people typically live in the now and weigh their desired purchases more important than saving for the future or paying off debt.

There is no way around it. You have to face your fear of commitment head-on. The path to financial freedom is tough, and you will find that the only thing to carry you through sometimes is the commitment you made to yourself and to your family.

When you are faced with a financial temptation, remember the commitment you made to achieving your financial freedom. Sometimes, all you have to do is take a step back and remind yourself of what your priorities are.

 3) Poor Prioritization
 
Speaking of priorities, poor prioritization can be another barrier to financial freedom. Failure to prioritize your finances correctly will lead you to focusing your time and energy on something that isn’t as important.

For example, if you want to find financial freedom, you will have to prioritize paying off debt before you prioritize saving for a trip to Hawaii. If you are in school, you may need to prioritize working instead of becoming involved in as many student organizations.

This isn’t to say that experiences aren’t worth as much. In fact, most personal finance advocates believe that experiences, like vacations, hobbies, and socialization costs are very worthwhile. But those experiences become even more fun when the burden of debt is off your shoulders and you have comfortable savings. Once you are in a good financial position, you’ll find that you can enjoy experiences even more without any of the guilt of the cost.

 4) Disorganization
 
It can be near impossible to achieve financial success without some resemblance of organization. Without organization, it’s difficult to use your money to its full potential. Plus, disorganization leads to an increased chance of forgetting bills, missing payments, and paying late fees.

The simplest thing you can do to get organized is to start a budget in Excel (download our free budget here). You can make a list of all of your expenses and add a note to the side of what day they are due each month.

Everyone has a different organizational method for their finances, but it is important to find what works for you.

 5) Too Little Income
 
Depending on what wealth means for you, you may be content with a smaller salary. But the fastest and easiest way to build wealth is to increase your income.

On a smaller income, you can only do so much to improve your finances. You can budget perfectly, coupon, and save every extra penny. But what would an extra $100 a month do for your finances? What about an extra $500? Or even $1,000?

There are several ways to increase your income. You can ask for a raise at work or find a higher paying job. You can also start a side hustle, like blogging or freelance writing, which allows you to make extra income from the comfort of your own home.

 6) Lack of Goals
 
In order to achieve financial freedom, you will need to spend some time thinking about what that actually means to you, and creating goals based on those thoughts.

It’s important here to have big goals, because you really can achieve them. Having goals will give you the motivation and direction you need when your financial journey gets tough. You always need a reminder of what you are working towards.

 7) Not Accepting That You Can Build Wealth
 
Anyone can build wealth, no matter how bad their financial situation was when they started. Everyone’s vision of wealth is different, but it’s important to remember if you want to be wealthy and you’re willing to work for it, you can be.

There are no excuses that someone else hasn’t already overcome. In fact, some of the wealthiest people have come from very poor backgrounds, but they worked and sacrificed for what they wanted.

No matter your income, how much debt you have, or how many mouths you have to feed, you can build wealth. If you don’t acknowledge that you can be successful, you won’t ever even try.

Read the full article at:  http://www.youngadultmoney.com/2017/07/19/holding-you-back-financial-freedom/ 

October 09 2017 By Rachel, The Latte Budget Financial Planning