Achieving financial freedom before 30 is a common goal among young people in their 20s. But unfortunately, due to the current high unemployment rates around the world, lack of opportunities for growth, high cost of living, and bad money habits, many people live paycheck to paycheck with no hope of achieving financial freedom any time soon.
Nonetheless, even though it can be challenging, it is possible to attain financial freedom before 30. You only need to have the right mindset, develop self-discipline, and be ready to invest the time, money, and effort required to accomplish this goal.
If you are in your 20s, keep reading this post for some tips to help you learn how to achieve financial freedom before age 30. But first, how do you define financial freedom? And why is financial freedom important? Let’s see…
Jump to a Section:
- What does financial freedom mean?
- Why is financial freedom important?
- How to achieve financial freedom before 30
What Is Financial Freedom?
Since we are all different, our goals in life also differ, and thus, each of us has our own way of defining financial freedom. You have to determine what being financially free means to you.
So, how do you know when you have achieved financial freedom? For many people, financial freedom is when you have enough money in savings (at least 25 times the amount you spend annually), passive income from investments, and living the lifestyle you want. It means that you no longer have to worry about where to get the money to pay your bills or the cash to spend on the things you want.
Financial freedom means the end of living paycheck to paycheck or in debt. Other signs you have achieved financial freedom include; having an emergency fund in place, not needing to work full-time, having enough money left over to save each month, and owning a home instead of renting.
READ ALSO: 4 Types of Wealth: Can You Achieve Them All?
Why Is Financial Freedom Important?
With the right mindset, discipline, and effort, anyone can achieve financial freedom before they turn 30. But unfortunately, many people never accomplish this goal in their lifetime, let alone in their 20s. However, achieving financial freedom when you are still young is important, and it is one of the things you should prioritize in life because it has numerous benefits.
Even though they say money does not buy happiness, having it and becoming financially free does help you live a happier, more comfortable life. Financial freedom is important because achieving it enables you to afford the things you want, frees up a lot of your time, gives you peace of mind, makes you cope better with unforeseen money problems in the future, and, most importantly, it helps you feel more fulfilled in life.
After achieving financial freedom before 30, you can spend the extra time you now have however you want. For example, you can choose to spend this time with your loved ones, on your hobbies, chasing new goals, helping others, or doing anything else you want without worrying about money.
When you achieve financial freedom, you can comfortably live a slow life if you choose to because it enables you to focus on doing what you want, when you want, instead of what you have to do to survive. Financial freedom is important because it enables you to take control of your life instead of allowing money to control it.
Now that you know its importance, you might be wondering what you need to do to achieve financial freedom before 30. Keep reading to find out.
How to Achieve Financial Freedom Before 30
- Set life goals
Goals guide your actions and keep you motivated. Hence, when learning how to achieve financial freedom before 30, your first step should be to set SMART goals. Assess your current financial situation, design your dream life, and then determine how much money you need to have in the bank in order to consider yourself financially free. You could even make a vision board to visualize the kind of lifestyle you want in the future to help you stay focused on your goals.
To achieve financial freedom before 30, break down your big goals into smaller ones. Set the various milestones you want to reach on this journey and how and when to accomplish them.
Remember to celebrate all your wins along the way, whether big or small. With your life goals set and the plans to achieve them ready, you can use the tips below to learn how to achieve financial freedom before 30.
- Get out of debt
Since you are in your 20s setting the financial goals to achieve before 30, you are likely fresh out of college with a load of student loans that need to be repaid. You probably also have some credit card debt, or perhaps, you have taken out loans for various projects.
Unfortunately, debts could hold you back from achieving financial freedom because you may get trapped in a cycle of debt and never have any extra money to save or invest. Thus, when learning how to achieve financial freedom before 30, paying off all your debts should be one of your first steps. To stay out of debt afterward, try as much as possible to avoid borrowing money.
- Take risks
One of the best things about your 20s is that it is the best time to shape your future. You are finally on your own, you don’t have too many responsibilities yet, and hence you can afford to take risks and make mistakes because you have a better chance of bouncing back.
If you want to discover how to achieve financial freedom before 30, use your 20s as the period to experiment and try out different strategies to make more money. It could involve quitting an underpaying job and looking for a new one, changing careers, trying out different side hustles, and investing in things, among many other opportunities to increase your income.
- Make better financial decisions
One of the financial mistakes young people in their 20s make is living as if there is no tomorrow. As a result, they make poor financial decisions, such as spending all their money on unnecessary things and never saving. Although it is true that tomorrow is not guaranteed, it is important to plan for your future when you are young.
If you want to learn how to achieve financial freedom before 30, you should make better decisions regarding your money. Develop good financial habits such as creating a monthly budget and sticking to it, delaying gratification, spending wisely, tracking your cash flow, living frugally, and saving a percentage of your income.
You should also invest your money in meaningful things such as real estate, stocks, mutual funds, an asset of your choice, etc. Investments will help you earn a passive income right now and in the future.
READ ALSO: 10 Lessons Learned from Growing Up Poor
- Stop limiting yourself
Sometimes the reason you haven’t achieved financial freedom yet could be that you are holding yourself back by not knowing your worth and lacking self-confidence. Perhaps you have settled for a low-paying job because you don’t believe you deserve better or trust your abilities.
However, by lacking self-confidence and not knowing your value, you could be limiting yourself. To get to where you want to be in life, i.e. achieve financial freedom before 30, you have to find ways to boost your self-confidence and apply for your dream job or accept any of the great opportunities being offered. If you trust your abilities and do your job well, you deserve every penny you are being paid, and it is time you knew your worth.
- Don’t be too picky
Earning a stable income is one of the first steps to attaining financial security, and thereby putting you on track to achieve financial freedom before 30. The unfortunate thing is that many people in their 20s are picky about the jobs they are willing to do. Some think a traditional 9-5 corporate job is the only way to earn a stable income. Others focus only on looking for jobs in the field they studied in school. But by being too picky you could be limiting the opportunities available to you.
When learning how to achieve financial freedom before 30, you should identify opportunities and use your skills, talents, and available resources to earn an income or increase your current one. You can then put aside a percentage of that income for your future.
Since you are still young with limited experience, don’t be too picky with jobs. Take the available one and use it to gain experience, learn new skills, network, build your resume, and discover your purpose.
- Diversify your income streams
Achieving financial freedom on one income is usually not easy. Furthermore, relying on a single job for your livelihood is risky. After all, people lose their jobs all the time, businesses go under, you could get sick and be unable to work, and many other unforeseen circumstances can happen that could lead to the loss of your main source of income.
Diversifying your income streams is one of the best things to do when learning how to achieve financial freedom before age 30. It will increase the amount of money you make and at the same time help you create a safety net to protect your future. It is also crucial to protect that income stream, and one way to do this is by getting an income protection cover. This way you will have a backup plan in case you are unable to work due to sickness or injury.
To diversify your income, you can start a side hustle and offer consulting or freelancing services. Some examples of side hustles to begin that will help you achieve financial freedom before 30 include; becoming an Uber driver after office hours, investing, creating a product to sell, reselling things, selling your skills, blogging, and becoming a social media influencer, among many others.
Are you in your 20s and wondering how to achieve financial freedom before 30? Now you have some tips to help you accomplish this goal. It will not be easy, but the success stories of the many 20-something-year-olds who have achieved financial freedom before 30 are proof that it is possible. So, if you want to learn how to achieve financial freedom before age 30 as well, use the above tips. When you get some financial education, put in the work required, manage your money wisely, and have the right mindset, financial freedom is an attainable goal, even at the young age of 30.
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