Needs, Problems, and Financial Freedom You Should Know

Finance or finance is one thing that we often encounter in everyday life. Whether parents or young people know the basics of finance is a must, because finance is the basic capital for living. 

However, talking about finance is not only about money, there is such a thing as financial need, financial aspects, financial business, to financial freedom.

You must know all of these financial aspects in full. For that, let's find out all the financial stuff that you must know!

Financial Needs

Financial needs are all financial needs that are used for living expenses, there are many types of financial needs that are usually owned by everyone, depending on the type of need. Financial needs are also the same as other types of finance.

Usually financial needs are divided into:

1. Necessities of daily life

The need for daily living is one of the financial needs that must be owned by everyone, daily needs can be in the form of food money, transportation money, and also shopping costs for living necessities.

2. Educational needs

The financial needs of education are usually owned by parents who have children and are currently or want to pursue education, but it is not uncommon for those of you who do not have children and are pursuing further education to need this educational need.

Usually the educational needs will also be long term.

3. Emergency fund needs

It is undeniable in life that you will experience unexpected events such as illness, accident, or disaster. Well, for that emergency fund is the most important financial need you must have.

Retirement fund needs

The last financial need is a pension fund, to enjoy old age with financial stability, you must plan for your retirement fund needs while you are working.

Financial Problems

In addition to financial needs, surely you have also experienced financial problems. Financial problems are a problem that occurs when managing finances. So, what, the hell, financial problems that usually occur.

Can't save

One of the financial problems that is often encountered is not being able to save, usually this also happens when you just start a job and get a salary, then are confused about how to manage your salary.

However, don't worry, there are currently many applications that can manage finances as well. So you can learn to save to meet financial needs.

Become an impromptu investor

Investment is becoming quite a busy thing at this time because with technological advances, digital investment, one of them withtrading saham which is hunted by many people, including young people who are tempted by a fairly high profit. In fact, to become an investor, you must know the basics of investing and not be careless.

Investments also have various risks, usually investments that have high returns can also be accompanied by high risks. To make an investment you have to use cold money or money that is not used to meet the needs of life.

Salary increases, lifestyle also increases

Usually this financial problem puts people in debt if it is not managed properly, because feeling an increase in salary tends to make you buy assets at high prices. In fact, this becomes a disastrous financial problem if the finances you have cannot cover a high lifestyle.

Can't manage finances

In addition to not being able to save, not being able to manage finances is also a pretty crucial financial problem, usually the problem of not being able to save comes when you can't manage finances properly.

To manage finances, you need to set how much budget needed for daily, weekly, or monthly needs. An example is to determine how much food money should be spent each day. For that you need to record finances in the application financial planner to make it easier.

7 Ways to Achieve Financial Freedom

If you can avoid financial problems, then you will touch what is called financial freedom. What is financial freedom? Quoted from Orbello, financial freedom is taking ownership of the finances that we have. This means that you can have fairly stable and reliable finances to survive. Well, to achieve financial freedom there are also several stages that must be done.

1. Knowing your own financial situation

The first step towards financial freedom is that you must know your current financial situation. For example, you can make assignment about your own financial situation.

Such as knowing the amount of income and estimated income in the future, knowing if you have debt, and identifying what is lacking in your current financial situation, for example insurance funds and emergency funds if you don't have one.

2. Make a budget

After knowing your current financial situation, the next step is to make a budget for each period, it can be weekly, fortnightly, or monthly. By making this budget you can prevent unnecessary expenses.

3. Make financial reports

After determining the budget, you also have to make financial statements This is useful for seeing where your money is coming in or going out. So, it can be used as an evaluation for the next month.

There are many template family or personal financial reports that you can use for free in Microsoft Excel by downloading them HERE.

4. Avoid debt

One obstacle to financial freedom is debt. Therefore, try to get used to avoiding debt and immediately pay off debt so as not to add to the financial burden. However, if you have to face conditions to make a loan, you should choose a loan with a low interest rate.

5. Separate emergency funds and future funds

Future funds or retirement funds must be separated so that you can manage your finances well. You can start by creating different accounts for each need so they don't get mixed up.

6. Live frugally

One way to get to financial freedom is to live frugally according to the income you currently have, by living frugally you also meet the needs of life. However, living frugally doesn't mean you have to live in misery, you only need to spend money on something you really need.

7. Investment

The last step to achieve financial freedom is to invest, currently there are many investment options that you can do such as stock investment, property investment, gold investment, crypto investment, to mutual fund investment.

By investing, you can get profits in the future, but keep in mind to always choose investments that are minimal risk and in accordance with your current financial situation. You can also choose long-term investments that have minimal risk to get to financial freedom.