A Money Champs Checklist to Financial Freedom
A Money Champs Checklist to Financial Freedom

A Money Champ's Checklist to Financial Freedom

Posted on 01 Feb 2022 by Nicolette Mashile

"Le Good Life"! We all want it. The life of pack up and go travel the world, never checking price tags or worrying about the future. Balancing a good quality of life with a stash of healthy savings and a thriving investment portfolio is the destination we all want to arrive at. But how does one do it?

Well, firstly, let's call it by name; it's Financial Freedom. It may look different from one person to the next, but ultimately, we all want the same things.

We want a life without constantly worrying about money. To be able to follow our passion, work jobs we love, never stress about unexpected expenses.

Famous Author Simon Sinek says, "success lies not in the intensity but rather in the consistency" in other words, we need to figure out those everyday things that we need to do if we are ever to achieve financial success. Financial Freedom doesn't just happen to a person. It is a direct consequence of the decisions one makes. Luckily Financial Freedom isn't about how much money you make. It's about how much you save, your financial habits, your financial goals, and more.

1. Budgeting


A Budget is simply a plan. A tool that tells your money where to go. You allocate money to your needs and wants to base on your income. Budgeting allows you to have an overview of your financial situation monthly. Not having a budget is like driving from Johannesburg to Durban with a broken fuel gauge.

2. Having Emergency Savings

Emergency savings is like having an anxiety pill. None of us can fully predict what the future looks like, let alone the next hour. Your phone can slip out of your hand, and the screen cracks, or worse off, you could be forced to take a salary cut. These situations need an immediate financial response; Your emergency savings is the response. It's like having a spare tyre. You keep it because you never know when you will need it.

3. Starting an Investment Nest

Investing is something like Spring Day, we plant seeds because we know they will become trees that will bear fruit. If worse comes to worst, they at least provide shade. We invest so that our money grows. Investing is putting your money to work. It is taking your car and putting it into Uber Eats delivery so that it helps you earn some money.

4. Managing Debt-to-Income Ratio

Managing Debt-to-Income Ratio

Your Debt-to-income ratio compares how much you owe each month to how much you earn. The adage comes in here. "You can't spend more than you make" Many South African households use 70% of their income to service debt. This means for every R100 earned, R70 goes to paying off Debt. Debt steals from your financial future.

5. A Good Credit score

This one is contentious because access to credit can lead to Debt. However, it is essential firstly that we understand credit as simply a facility available to us for when we need it. Discipline and borrowing well are at the core here. Whether you want to believe it or not, your credit score can play a significant role in your life. Your credit score facilitates the "borrowing well" because it determines how much access to credit you are granted and the terms and conditions of that access.

6. Diversify Your Income Streams

Diversifying your income is a great way to reach financial freedom. It allows you not to become too reliant on one income. We can all do with more than one income. Start within and see how you can monetize some of your passions.

7. Financial Emotional Intelligence

Financial and Emotional Intelligence

Our money habits are highly influenced by our emotions and beliefs. Having an awareness of how money makes you feel; does it give you a sense of grandeur? Does it contribute to your sense of self-worth? Or do you see it as just a tool for a better life? These feelings are the backbone of how we form financial habits and make financial decisions. Remember, financial, emotional intelligence has to do with the need to live within your means. And to live within your means, you must spend less than you make.

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