The Woman's Guide To Understanding Financial Freedom And Financial Stability
Updated: Jul 2
Almost everyone shares a desire for financial stability and freedom. It can be challenging to set up a proper savings plan, save to buy a home, or even set up an emergency fund when you work full-time or part-time.
Many people want to reach financial independence but do not know where to begin.
As a woman, you might have many other tasks to complete, but the path to financial stability and independence must be prioritized, or achieving your financial goals may become harder.
In the little time you have left over after investing in your job, home, or family, you should start focusing on yourself, investing in yourself, and becoming financially literate to achieve your much-desired financial stability and freedom. The first step is focusing on yourself.
The good news is that there are ways to accomplish those things sooner rather than later and gain control of your finances. Understanding finances and educating yourself makes this an easy process.
Achieving financial freedom requires more than financial education; one must achieve financial independence by following and committing to strategies geared toward financial independence.
I will present The Woman's Guide to Understanding Financial Freedom and Financial Stability in this article.
Just as the purpose of our lives, the definition of Financial Freedom is subjective.
Some define financial freedom as having the freedom to spend and earn money the way they love, whereas others describe it as being stress-free about managing day-to-day expenses without the fear of running out of funds; some define it as having sufficient money saved even after their retirement, or even for the moment.
The definitions may differ, but the main goal remains almost the same. That is earning, spending, and saving without straining yourself much.
We believe that is true Financial Freedom, not just the freedom to buy everything you see. It is freeing yourself from all the unnecessary financial hassles and pressures that trouble you and being able to control your finances.
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There is no one-size-fits-all answer to this question, as each woman's financial freedom will depend on her unique set of circumstances, their own set of choices, and their cost of living. However, here are a few general tips to help any woman achieve financial freedom.
1. Do something you love for a living:
Sometimes, women were restricted from doing what they loved, and their choices were limited. But, today, the situation has changed more or less, and you can choose the job, partner, and life you want. So, go for that job despite the distance, risk, and efforts associated with it. You spend approximately 22k hours a year doing that job, so it shouldn’t be something that stresses you out but something you genuinely feel contended and happy to do. Only then will you shift and focus on feeling the satisfaction that you are financially free.
Living paycheck to paycheck is not the same as living a frugal and simple life. In one situation, you are striving to survive while n the other you are committed to reducing your expenses and maximizing your money.
2. Don’t let Your Expenditure be equal to Or more than Your Income:
Your expenses should always be on par with your earnings. When you spend more than you earn or spend everything you make, you will be left with nothing but regrets, and when an emergency arrives, you will be left with a chaotic mind and an empty bank balance.
So, budget according to your income, and always remember to spend only half of your earnings. The other half must surely be your savings.
3. Adopt a Simple Lifestyle:
When wants override our needs, the requirement for more money arises. Not everything we want is what we should be buying.
Spend only on the necessities that fulfill your needs and wants equally. This doesn’t mean completely cutting off the expenditure on fancy clothes, food outside, entertainment, or personal care products. But do not overspend on them, and learn to manage accordingly so you can put money aside for your savings.
Set some money aside for needs and wants equally, but don’t let wants override your needs. The problem comes when you purchase based on wanting everything you see.
Buy your favorite dress, visit your favorite movie with your family, and attend that party with friends, but don’t invest so much in them that you forget the count on your expenditure.
Keep it moderate, as having a simple lifestyle never goes out of trend! Remember, investing in yourself first will pay off later in life and for years.
4. Think of Retirement Beforehand:
Are you aware that women live approximately five years longer than men? That means you should have a retirement plan for nearly five years more than men have. So, be ready to care for yourself independently, even after retirement.
Earn more, Invest more, Spend less, and Save more to achieve financial freedom for your whole life! A long-term financial plan will help you achieve the ultimate goal of living the life you have always wanted.
Working toward financial freedom means more than speaking to a financial advisor! Not only will you have to establish financial goals and commit to them, but you also have to understand the basics of financial literacy.
Financial Stability:
When you can earn a fixed income that serves all your necessities and provides an allowance for your then-and-now luxuries while allowing you to save, you can say that you are financially stable.
As women, we are so consumed with all the demands of life, such as our careers or family, that we do not think of investing in ourselves first. Other women lack the financial knowledge to think of financial stability, whereas others struggle to implement it while managing other household and career demands.
Despite the role you might have been doing, the work pressure you have, the income you earn, and the responsibilities you have, you should also be thinking of Financial Stability and start working on it from now on as it has to offer a lot in the long run.
Every woman can become financially stable despite the responsibilities, stressors of life, and demands imposed by society on them. With education, effort, discipline, and mindset, women can manage and take upon many financial decisions today equally or better than men.
How to be Financially Stable?
Financial Stability for women can be challenging, primarily if they have yet to be taught how to manage money or make wise financial choices.
However, women can achieve financial stability if they sacrifice and work hard.
We have a few tips curated here that you may consider to become financially more stable.
1. Understand your money:
The first step to financial Stability is keeping an eye on your money.
You need to know where your money is going, what bills you must pay, and your savings. So that you will have a complete picture of how to manage your finances, determine your regular expenses, and track where your money is going each month. This will give you a complete view of where your money is going, and you can make adjustments as necessary.
2. Allocate a budget:
Set aside money for your expenses, bills, loans, and savings.
Dividing everything into small chunks helps you identify your complex expenditure. You can write them down or use a budget app that you love to achieve this.
This will help you live within your means and will help you make a savings plan. So, start by evaluating your current financial situation, creating a budget, and getting a savings goal started.
3. Set some savings goals and stand by them:
Create realistic goals for yourself and develop a plan to achieve them.
Concerning finances, it is essential to set both short-term and long-term goals. For example, you may want to save up for a down payment on a home within the next five years.
To reach this goal, you must stick to your created budget. Similarly, you may want to buy a car, spend on your child's education, or even go on a vacation; an emergency fund put aside, be it anything, make it a priority, and save for it.
Ensure your goals are achievable and realistic, so you do not get discouraged.
Learn how to invest and save money wisely, as it is one of the smartest things women can do for their financial future.
Likewise, learning to avoid debt, save money, and invest wisely would be best. It is also important to understand interest rates and how they work.
This knowledge will help you make informed decisions about credit cards, loans, and investments.
5. Be Insured:
Another critical element of Financial Stability is insurance. Many types of insurance allow you to be prepared for any financial crisis.
Whether health insurance, Travel Insurance, Property Insurance, or Life Insurance, their main goal is to keep you covered during an emergency.
6. Never, ever depend on a single income:
Women should also consider making extra monthly money through a part-time job or starting a business.
It saves you from any financial crisis you may not see and helps you remain financially stable at times.
Variance: A thin line separates Financial Stability from Financial Freedom. Financial stability is being able to manage your monetary expenses successfully. At the same time, you have a fixed income, whereas Financial Freedom stresses less about your costs, and you stop worrying entirely about your finances.
To be precise, Financial freedom is subjective, and it is when you feel secure and have backed up the finances you need for tomorrow so that it doesn’t bother you anymore and you reach a state of financial freedom.
Only you can tell if you have Financial Freedom or not. It is something only you and your inner self can tell. If you feel peaceful, secure, and free from any financial thoughts, you can consider yourself having Financial Freedom.
Financial stability is when you have a fixed income and can successfully manage all your necessities, luxuries, and savings. It is where even people can tell you if you have financial stability or not.
You can consider yourself financially stable with a good fixed income, investments, and savings.
Sweet Spot: As you know, Financial Stability and Financial Freedom are interlinked. When you have Financial Stability, you have a higher chance of Financial Freedom.
If you have Financial Freedom, you may be considered financially stable, excluding some exceptional cases. As the correlation between them is high, you can accomplish the other if you achieve one.
Bottom Line: By understanding Financial Freedom And Financial Stability, you are already halfway near achieving financial stability and freedom. Achieving financial freedom begins with long-term financial planning.
The best way to manage credit card debt, establish an emergency fund, and have a retirement plan in place is to commit to achieving financial freedom.
So, wake up every day to see the sunlight, exercise and work hard, dress up as you like, level up and never give up, and most importantly, never settle for less than what you deserve!
Reaching financial independence through passive income, an investment portfolio, reducing living expenses, or building passive income streams is attainable through education, knowledge, and discipline.
Start by making simple changes to how you track and spend money. Visit our Mujer Investor Workbooks page and get our Savings Planner, Credit Guide, Mujer Investor Budget, and Self Love Investing Guide.
By Edith Lagunas, Mujer Investor
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Disclosure: I may receive affiliate compensation for some of the links below at no cost if you decide to purchase a paid plan. This is for entertainment only and is not intending to provide financial advice.
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