Personal finance is one of the most discussed topics in our current society, with people often asking how they can attain financial freedom. The key to attaining financial freedom is through the radical development of personal finance. Radical Personal Finance, as the name suggests, is a financial philosophy that emphasizes developing a sound personal finance plan that is critically examined from every angle to ensure its effectiveness in achieving financial freedom. In this article, we will explore five ways that radical personal finance can help you achieve financial freedom.
1. Develop a Distinctive Budget
A major component of radical personal finance is developing a distinctive budget. A budget captures your income and expenses and is divided into categories, giving you control over your finances and helping you attain financial freedom. A distinctive budget sets you apart from the masses, and your budget should be personal to you and your desired financial outcomes. For instance, budgeting for a family of five is different from budgeting for an individual.
2. Live Below Your Means
Living below your means is about making conscious decisions to curb lifestyle creep and spending less than you earn. Radical personal finance encourages living below your means as a way to gain financial freedom. For instance, you might need to make conscious decisions to buy used or average-priced cars instead of splurging on a luxury car, in order to save money and allocate more money towards your investments.
3. Invest Strategically
Investing strategically is another hallmark of radical personal finance as a means to achieving financial freedom. Investing strategically involves researching and making informed decisions about the financial instruments to invest your money in. You might consider investing in a mix of stocks, bonds, ETFs, or real estates depending on your financial goals.
4. Create Emergency Funds
Radical personal finance philosophy emphasizes the importance of having emergency funds. Emergency funds are funds set aside in case of unforeseeable circumstances, such as job loss, health issues, or unplanned expenses. Having a cushion of emergency funds enables you to avoid debt and stay financially stable, ensuring your journey towards financial freedom.
5. Eliminate Debt
Debt elimination plays a crucial part in attaining financial freedom. Radical personal finance advocates for eliminating any debts. This type of debt includes consumer debt, such as credit card debt, car loans, or personal loans. In addition, radical personal finance advocates paying off any student loans you might have taken, in order to attain a debt-free status and allocate more money towards investments.
In conclusion, radical personal finance is a financial philosophy that emphasizes strategies and tactics that help people attain financial freedom. To achieve financial freedom, radical personal finance emphasizes budgeting, living below your means, investing strategically, having emergency funds, and eliminating all types of debt as a means of staying financially stable. With this amazing philosophy, attaining financial freedom is achievable for anyone committed to putting in the work necessary to make their finances work for them!
