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The Basics of Financial Freedom

written by Carla Pastore October 29, 2020
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I’m a high school English teacher.  My husband is a landscape architect who estimates and wins bids for multimillion dollar projects in New York City.  I don’t consider myself a numbers person, yet I am the one in charge of finances at home.  We live comfortably and don’t stress too much about money.  In fact, I’m home on an extended unpaid maternity leave right now because I have prioritized financial freedom since I was a teenager.

I write to you about financial freedom not from the point of view of an accountant or a financial planner, but from that of an ordinary person who has achieved financial freedom and wants to share her experience with you so that you, too, can free yourself from income anxieties.

Behaviors of the Financially Free:

  1. Spend within your means.
  2. Think long-term when making choices.
  3. Set goals.
  4. Do “You” – not “The Joneses.”
  5. Seek advice.

Although each of these guidelines may seem like common knowledge, it is actually the combination of these five behaviors that leads to financial freedom.

Spending within one’s means is a solid first step to financial freedom.

High credit card limits and huge mortgages are readily available, but it is wise to avoid maxing yourself out.  Think about it:  How can we be comfortable in the case of an emergency or an expensive surprise if every penny we earn is already earmarked for paying bills?  Similarly, when purchasing a home, you might look for an overall price that fits your budget, but if you don’t consider the taxes (and the fact that they will most likely go up in the future), you may be getting in over your head.  According to Forbes, you should not spend more than 28% of your income on a mortgage, and if you can spend less that’s even better.  But how do you turn down that offer for so much money from a lender?  Easy, do your calculations in advance and then tell the bank how much you’d like the loan for.  Rather than letting a mortgage broker tempt you with an amount that might become a financial strain, set out to spend only a certain amount from the start.  The same goes for any large purchase, from a new car to your wedding gown.  If your big day budget affords you $1,000 for the white dress, then don’t look at anything above your price point.  There will be plenty of options for that or any budget – trust me!

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