8 Levels of Financial Freedom You Should Aim For

So where are you on the journey to financial freedom?

Most of us associate financial freedom with not having to work anymore. But even if you're a few years away from complete retirement, there's always room to progress. If you keep taking steps in the right direction, you will reach and unlock your goals, even if it is having a house and lot Philippines.

As a matter of fact, most people have achieved financial independence by learning the eight (8) levels of financial freedom, which you should also aim for.

The Secret Formula to Reach Financial Freedom 

You can also achieve financial freedom and live the life you've always dreamed of. With hard work and dedication, these eight levels of progress can help you measure yourself.

Level 1: Clarity

This is the first step, and it's all about taking stock of your financial situation. This means knowing how much money you have in the bank, how much debt you owe, and what your monthly expenses are. Once you have a clear understanding of your current financial situation, start planning to improve it. Thus, you can decide how to spend your salary or income.

Level 2: Self-sufficiency

This is the next level, and it means being able to cover your expenses without any outside help. This means having a steady income that is enough to cover your rent, food, transportation, and other essential expenses. You can even quit a toxic job and take a break until you find a new one for at least three to four months.

Level 3: Breathing room

This is when you have money left over after your expenses that you can put towards goals, such as building emergency funds or investing for retirement. This is a great feeling, knowing that you have some financial security and that you're not living paycheck to paycheck. This is the level where you explore other careers or sources of income to suit your lifestyle.

Level 4: Stability

This is when you have a steady income and your expenses are relatively predictable. This means that you know what your monthly expenses will be, and you can budget accordingly. This gives you peace of mind and makes it easier to save money. 

Level 5: Flexibility

This is when you have the freedom to make changes to your lifestyle without worrying about how it will affect your finances. You can afford to take a vacation, switch from a possible lower-paying job, or start your own business without worrying about how you'll pay your bills.

Level 6: Financial independence

People at this level have enough money saved up to cover their expenses for the rest of their lives. If you reach this level, you don't have to work anymore if you don't want to. You can also travel the world, spend time with your family, or pursue your passions.

Level 7: Financial freedom

This is when you have so much money that you can do whatever you want with it, whenever you want. You can buy a big house, a fancy car, or anything else your heart desires. You have the financial freedom to live your life on your own terms.

Level 8: Abundant wealth

The last level is when you have more money than you could ever spend. This is the ultimate level of financial freedom. You can literally buy anything you want, do charitable work, create an inheritance, and you never have to worry about money again.

5 Recommended Tips to Achieve Financial Freedom

Financial freedom is a great goal to have, but it's also important to enjoy the journey. Make sure you're also taking some time to enjoy the fruits of your labor along the way. Here’s how.

Build an Emergency Fund

Get clear on your financial goals. What do you want to achieve with your money? Do you want to retire early, buy a house, or travel the world? 

Start by establishing an emergency fund that covers three to six months of living expenses. This will provide a safety net in case of unexpected circumstances like job loss or medical emergencies, ensuring you have financial security.

Eliminate Credit Card Debt

Debt is a major obstacle to financial freedom. So, prioritize paying off high-interest credit card debt. The faster you can pay off your debt, the sooner you'll be able to start saving and investing. By reducing or eliminating this debt, you'll free up cash flow and avoid accumulating unnecessary interest charges as well.

Save and Invest

Develop a habit of regularly saving and investing. It’s a great way to grow your money over time. Set up savings and investment accounts. Consider diversifying your investment portfolio to mitigate risk and increase potential returns. You can start by investing in an affordable house and lot property or stocks.

Strive for Financial Independence

Aim to achieve financial independence, where your passive income covers your living expenses. This can be attained by creating multiple income streams, such as rental properties, dividends from investments, or an online business.

Improve Work-Life Balance

Assess whether a lower-paying job that aligns with your passion and values can improve your work-life balance. Sometimes, shifting to a job you enjoy can enhance your overall well-being, even if it means earning less initially. Focus on acquiring new skills to increase your earning potential in the long run.

Achieving financial freedom takes time and effort. So, don't get discouraged if you don't see results immediately. Be patient yet persistent as well. Don’t compare yourself to others because we all have different paces and paths in our investment journeys.

But if you’re ready to take a leap, be a part of the growing community of Lumina Homes. We have a selection of affordable house and lot for sale properties that you can choose from. These units are available in over 50 locations nationwide, so you have plenty of options, too. Worry not about the cost because we also offer a wide range of flexible payment terms and options. Tap the nearest Lumina-accredited seller for complete house specifications and packages.