07 Nov Beyond Debt Review: a Guide to Financial Freedom

Everyone dreams of being financially free: not worrying about money, being debt-free, or not having to work anymore. The problem is that the economy is in one of the worst states ever, especially in South Africa. Interest rates are high, the minimum wage isn’t a living wage, and the job market is saturated. Statistics say that of every 27 jobs someone applies to, they get an interview from one. How can we become financially free when it seems like all the odds are against us? Is it possible?

There is always hope, especially when it comes to money–take it from Cape Town Legal Consultants. People have said this so much that the phrase has lost its power, but hard work pays off. If you save enough, eventually the hundreds will turn into thousands. When you focus on being responsible with credit, your score is sure to rise. If you upskill to get a better job, eventually you’ll make a better salary.

This post discusses ways to be financially better off, and even reach financial freedom. We’ll discuss how to spend wisely, save, make more income, leverage credit responsibly, and start thinking about money differently.

What Is Financial Freedom?

By financial freedom, we mean not worrying about whether you’ll be able to afford petrol and buying food from where you want to without looking at prices.

Spend Wisely

Spending money wisely is one of the best ways to reach financial freedom. What constitutes wise spending is subjective. At Cape Town Legal Consultants, we define wise spending as not buying things that will take from you in the future. For example, don’t buy a TV with your discretionary income. You’ll have to pay for a TV license, which will degrade in value as time passes.

If you’re short on money, try to figure out where you could save. For instance, don’t eat out every night when you could take half an hour to cook at home. You might try buying food in bulk and storing it in the freezer. Try to save money with the little things; eventually, it will add up.

Save

The 50-30-20 method advises that you put 50% of your income towards savings. This way, if something unexpected happens, like your car breaks down or there’s a family emergency, you’ll be prepared.

Saving can be hard if you feel like you’ll have nothing material to show for it. We advise you set up 2 savings accounts: 1 for things you want, like a holiday, and one for emergencies or long-term goals.

Increase Your Income

This is easier said than done, but increasing your income is possible. Apply for a 5 to 9 job in the same field you’re in, or get a side hustle like tutoring, babysitting, or retail/hospitality work. Alternatively, you might leverage your achievements at work to ask for a promotion or raise.

If you have a house, consider renting it out and then renting a property that costs less than your monthly mortgage. Put the difference towards your savings.

Good vs. Bad Debt

Lastly, remember the difference between good and bad debt. Good debt is debt you create to get an asset that appreciates in value over time, like a house. Bad debt is debt you create to purchase consumer goods, like a store card.

If you were previously over-indebted and need to remove debt review, take the first steps to financial freedom and clear your credit record. You’ll be able to create good debt after debt review and leverage your purchases to create passive income, such as rental income, to increase your earnings. To find out more, contact Cape Town Legal Consultants.