Everyone desires to be financially independent and able to meet their financial obligations from own resources. Everyone can have financial freedom. No one wants to be partially or wholly dependent on another person for basic needs and wants. However, many people remain in this unpleasant situation because of certain reasons, mainly ignorance. One of the definitions of ‘Independence’ given by Cambridge dictionary says  it is ‘the ability to live your life without being helped or influenced by other people’ while  ‘Freedom’ is defined as ‘the condition or right of being able or allowed to do, say, think, etc. whatever you want to, without being controlled or limited’. From these definitions, we can define financial freedom and independence as the ability to live and meet your financial obligations, without being helped or influenced by other people. We can also define Financial Freedom as ‘the condition or right of being able or allowed to do say, think, etc. whatever you want to (financially), without being controlled or limited’..There are many good habits we can adopt to help us live with financial discipline which in turn will allow us have financial freedom. These habits are applicable to those struggling financially as well as to those desiring a higher level of financial independence. The following 7 keys are some of the ways we can all have true financial freedom.


1.    Understand and value money:A person who desires to have financial freedom must understand money and its’ numerous attributes. Money serves three main purposes; it is a medium of exchange, a store of value and a unit of account. In practical terms, everyone needs to understand and know how much they need to meet their immediate needs, how much financing they need for the future and how much they are currently worth. Understanding money means ‘understanding how much money you have and where it goes. It means being in a position to make the most of what you have. I love listening to the advert we hear in recent times  on the popular CNN program ‘Quest Means Business’  hosted by Richard Quest which says ‘Just a penny? The person who desires financial independence must know ‘it isn’t just a penny’ but that every penny counts. Knowing this guides your monetary choices and decisions. Most wealthy people do not waste funds. They get good value for every penny committed. They understand that money if properly managed has the tendency to grow. They also learn to pay themselves first by putting away a percentage of their earnings as savings. Another attribute of money is that it is not defined by the work done to earn it, so do not look down on any job. Be humble enough to do anything legal to earn some money. Lastly, treasure what you earn, no matter the sum.


2.    Create multiple streams of income: Multiple streams of income means that you have income from several different sources. If one source stops or is eliminated you can rely on another source. Most people do not maximise and generate income from the opportunities they have. Everybody has 24 hours in each day. The difference between the financially independent vs dependent man is the utilisation and application of these hours. Whether you work for yourself or for someone else, you can allocate more time to earning income in addition to your main source of income. What is important is that you do not breach the terms of your paid employment. Those with funds should diversify their investment portfolio by investing in a variety of income generating assets. Others with limited funds can learn a skill and equip themselves to offer a service in addition to their main jobs. Look around you and identify a need in your immediate community and find what you can sell, or the service you can render to generate additional income.


3.    Identify your money mistakes and weaknesses: A person who desires to have financial freedom must understand his weaknesses and be honest about past money mistakes, and be determined to overcome these weaknesses. Money mistakes range from living above one’s means, living extravagant lifestyles, not having savings, spending on impulse, borrowing to finance excesses, poor financial planning, poor knowledge of financial matters and others. Living for the moment and improper planning for future needs, complacency with current state of achievement are more examples of these weaknesses. Identify which bad habit you are struggling with and make deliberate efforts to stop this.


4.    Maximize your strong days (Make hay while the sun shines):“Make hay while the sun shines” is a popular old saying that is essential for being in control of your own financials. To make hay while the sun shines means that you take advantage of the chance to do something while conditions are good. It also means you make good use of your time or make the most of an opportunity while you have the chance. To have financial independence irrespective of the stage of your life, requires that you sow the right seed at the right time. The financial seed sown today will grow and yield fruit down the road. Your financial decisions and choices during the years when you earn high income should tend towards saving maximally such that your savings and investments can finance your lifestyle when you have retired or left such high paying jobs.  It is important to be aware that whilst certain expenses during your active years (eg buying first home, children education) may not continue into retirement season, you pick up new expenses (medical bills from age related ailments, higher insurance premium etc) If we live below our means while the going is good, we will be able to live as if we never retired even after we have retired.Shun the word ‘procrastination’ and take action ‘today’. Make every second count. Learn a trade/skill when you still have the physical strength and when fewer things are competing for your time. Sacrifice the leisure of today to study for a professional qualification, obtain additional certification that can boost your resume (worth). If you are an entrepreneur, build up your capital by increasing what you plow back (retained profits) into your business and see your business grow. 


5.    Look ahead: Financial freedom isn’t only for your days in active employment but includes  the season of life when you can no longer actively work. Everyone must take financial decisions consciously aware that Retirement is compulsory and will happen to every one. Retirement has been defined as ‘the action or fact of leaving one’s job and ceasing to work’.Even if you love work so much, your physical form will restrict you from working so hard in your later years. Some people have lived a life time of work with nothing to show for it, irrespective of what earned.When you retire, savings from your active years should fund your living expenses. It is therefore important that from the date you start working, you set some funds aside for your retirement years. No matter your current level of income, it is essential to begin saving for retirement. If you have not started, begin now as it is NEVER too late.  There are many resources to support you in this area so seek professional advise where unsure.
6.    Your money, your relationship.  Whether you are already married or planning to get married, it means you are in a serious relationship. Financial freedom requires that you and your partner are fully aligned on money matters. Transparency is essential and there should be no assumptions regarding what your financial goals are. There should be open discussions about your finances where both parties will agree on what strategy to pursue. Your financial freedom is incomplete if you have financial discipline while your partner is reckless. Your financial success is assured where you both have the same financial priorities and goals regarding spending and saving.


7.    Understand that everyone can have financial freedom.No matter your current circumstances, understand that no man was born to remain poor. There is a popular saying, ‘If you are born poor it’s not your mistake, but if you die poor it’s your mistake’. Attain financial freedom by refusing to be condemned into living a life of poverty. With the understanding that your financial circumstances can change positively, begin to take little steps towards growing financially. Improve your knowledge of financial matters and apply the knowledge gained. Where possible seek expert support and guidance from professionals to enable you maximize the opportunities currently available to you.
***7 simple keys to your financial freedom – FinanceCoach Quarterly (Q3-2018)

***Bimbo Komolafe FCA, FCIB writes from Lagos and is a Fellow of the Institute of Chartered Accountants of Nigeria and a Fellow of the Chartered Institute of Bankers.

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