What is financial freedom? It sounds like a heavy word. In reality, financial freedom is being able to afford and do what you want, when you want it. This could be having the ability to buy material things without thinking about the cost. This could be retiring early, way before you hit sixty. This could be having the power to quit your job and pursue passion projects, be it starting a business or giving back to the community. Financial freedom sounds like a dream, but if you look around, you may know of some people living the dream, living financial freedom. Do you want to reach financial freedom as well?

Here are 5 points to determine if you are on the right path to financial freedom:

1) You don’t worry about last-minute emergencies

Car broke down? Are you feeling aches and need a trip to the doctor? Other people may hold off having car repairs and medical trips because of the expenses they will incur; however, if you have an emergency fund and even health and car insurance policies, you won’t even think twice of taking your car to the shop or having a doctor’s appointment. If you find yourself panicking during emergencies because of finances, then that’s a sign that you have money problems. If you’re on the right path to financial freedom, you find yourself having the monetary means to pay for last-minute emergencies.

2) You have a positive money mindset

There are people who balk at the idea of having credit cards or loans. “Credit is evil and should be avoided at all cost” is an exaggeration but a very true statement you may hear. It’s time to change that mentality. Credit can be good for you if you use it to your advantage. This means paying your credit card balance in full or taking out loans to set up your future, such as taking out a house loan to buy an investment property. By having a positive money mindset, you’ll learn to make money work for you.

If you want to build a positive money mindset, you can start with reading online blogs, such as mine, and educate yourself on personal finance. At present, self-education is easier than ever what with the multitude of resources available. Even when it comes to applying for a credit card or a house loan, the information and resource you need can be found through comparison websites, such as MoneyMax.ph. The availability of finance-related resources makes talking about money more accessible. The more you read about personal finance, the more you realize that money isn’t as scary or evil as you may have originally thought.

3) You have a healthy savings account

Do you know someone who earns so much and yet always complains about being broke? At the same time, do you have a friend who may not earn so much and yet never complains of not having enough? Between the high and the low-earner, the latter is the one closer to financial freedom. Having a large salary becomes futile if you save 0%. What happens during retirement when you’re not earning a salary anymore? To be closer to financial freedom, start with having a healthy savings account. This means saving a portion of your salary every month. It’s even better if you have a large income; this means you’ll be able to save more. Remember, you cannot invest what you do not save.

4) You know how to say ‘no’

Whether it’s saying ‘no’ to that new pair of shoes or saying ‘no’ when your friends chide you to treat them to another round, having the ability to say ‘no’ can do wonders for your finances. If you track your expenses, you will notice that the little things add up. A cup of Php 100 coffee may not seem much, but drinking one every day of the working day adds up to Php 2,200 a month, or Php 26,400 a year. By learning to say ‘no’, you’ll be able to do your finances some good. Learning how to control your impulses and building the habit will have positive effects not only when it comes to your finances but yourself as a person.

5) You’re making money while you sleep

You may find yourself raising an eyebrow. ‘Making money while I sleep? Is that even possible?’ Yes, it is, and it can be done through investing. I mentioned earlier that employees lose their primary source of income when they reach retirement. This means they won’t be earning a salary anymore, and yet, they’ll continue to spend. If you reach retirement and you have insufficient savings, how will you cover your expenses? You can start investing.

However, don’t start investing when it’s already too late, start as soon as possible. To stay on the right path to financial freedom, make you money work for you while you sleep, and this can be done through investing. You can put your money in a time deposit or a bond wherein you’ll earn interest. You can also invest in stocks, real estate, or a business wherein the value of your investment grows; however, it’s best to note that investments are not guaranteed, and you can lose money as well. This is the importance of starting as soon as possible. The earlier you start investing, the more time you have to spread your risk through the years. The longer your investment, the less riskier they become.

The road to financial freedom

The road to financial freedom is not easy but nothing worth it ever comes without hardships and difficulties. What is important is you take the first step, be it opening a bank account or saving a small percent of your monthly salary. Once you take the first step, you’ll start building the discipline and the habit to continue making smart money choices, and before you know it, you’re already financially free.

As you experience financial freedom, always remember that money is only a tool, not the end goal. Be generous and always be a blessing to others. Wealth and the ability to create wealth comes from the Lord, and it is not for our own purpose, it is for His.

Join the biggest investment conference of the year – iCon2016! Visit www.iCon2016.info or contact 09266910126 for details.

Want a copy of my life-changing book No Nonsense Personal Finance: A Step by Step Guide? E-mail michael@randelltiongson.com on how you can order a copy.

Due to many requests, I will be having a 1 day crazy sale for my 3 books:

• No Nonsense Personal Finance: A Step by Step Guide; P500.00
• Money Manifesto: Lessons in Personal Finance; P600.00
• Everyday Moneyfesto: 365 Days of Financial Wisdom; P600.00

Regular price of my 3 books is P1,700.00 but for just today, May 19, 2016 all 3 books will be at P1,000.00 (as a bundle). I am throwing in free shipping for Metro Manila deliveries; for provincial orders please add P100.00

Here’s how you can order:

1. Deposit to BDO #006440069496 or BPI 0249-1113-09 (John Randell Tiongson)
2. E-mail photo of deposit slip or transfer advise to michael@randelltiongson.com along with your full name, complete address and contact number.
3. Expect your books to arrive in a few days!

Hurry, the bundle sale is only for 1 day and there will not be extensions!

There’s a big debate with credit cards. Is it good or is it bad? Others prefer credit over cash. It’s safer to carry, and credit cards offer perks and discounts in which you can actually save rather than spend more. The other half think credit cards are evil. Your money is eaten up by interest rates, and before you know it, you’re buried in credit card debt. So which is it, really? Are credit cards good or bad? It depends really. It depends on how you view credit cards and how you handle money.

So are you ready for are credit card? If you are, you can use credit cards to your advantage; however, if you’re not ready for one yet, then you might really think plastic is evil. Below, I prepared a guideline you can follow to determine whether or not you’re ready to have a credit card.

You’re ready for a credit card if:

You spend less than you earn

If you always have savings by the end of every month, then that is proof that you know how to handle money. You’re not finishing your salary up to the very last centavo or racking up debt or ‘utang’. You already have the mindset that saving is a necessity, and there’s no need to finish your entire salary. Even better is if you save first before you spend, wherein you automatically transfer a percentage of your income from your payroll account to your savings, and you use the remainder for expenses. Take note though that if you get a credit card, you have to stick within your limit. This means you shouldn’t take away money from your savings to pay your credit card balance.

You can say ‘no’ to impulse shopping

The beauty about credit cards is it makes the shopping experience even better than it already is. Shopping becomes a breeze when you just hand the cashier your credit card, he or she swipes it, you sign, and voila, you can leave the shop with a new item (or more) in hand. This is bad, bad, bad for those who cannot control their spending. You’re not ready for a credit card if you’re susceptible to ‘shop til you drop’ or you can’t say ‘no’ when you see a big red ‘sale’ sign. On the other hand, if you can control your expenses and can walk past a ‘sale’, this is a sign that you have your spending in order and are ready for a credit card.

You’re NOT ready for a credit card if:

You view credit cards as free money

As mentioned above, the use of credit cards improves the shopping experience. It makes it easier, faster, and more convenient to shop. Because of this experience, others may view credit cards as free money. It’s not like debit cards in which the amount you spend is automatically deducted from your account. With a credit card, you don’t have to pay the balance right away, so technically, the Php 1,500 is still there in your account even if you already bought an item worth that much. If you think you’re going to have this mindset, wherein you see yourself paying the minimum required amount instead of the full balance, then you’re not ready for a credit card. You will just rack up interest charges by doing so and treating credit cards as free money or balances that do not need to be paid in full.

You need a card to pay back a debt or buy a ‘necessity’

Another sign which shows that you may not be ready for a credit card is when you plan to use it to pay back a debt or buy a ‘necessity’. Your sneakers broke and you’re thinking you can apply for a credit card to buy a new pair. Where’s the harm in that? You can always pay your credit card balance once you get your salary. If you do this, you’re already taking on debt by borrowing from your future salary. Even if you expect to receive your income by the end of the month, don’t treat money that is still coming as money you already have. Your credit card balance must be paid in full every month to avoid incurring interest fees. You’re not ready for a credit card if you don’t have the money to pay back the balance you will incur when you use it.

Looking for the right one

Owning a credit card is a big responsibility. If you lose sight of your spending patterns and money management habits, your credit card may own you instead of you owning a credit card. This means that you may incur credit card debt, go over your limit, or worse, keep on applying for more credit cards just to keep afloat. The guideline above is a good starting point to determine whether or not you’re ready for a credit card.

In the event that you decide you’re ready for one, keep being responsible and this means to do your research first. Don’t apply for the first credit card you see or the first agent who approaches you. Use the internet first to research which credit card has the lowest interest rate or which offers the features most suitable for you (e.g. miles, cashbacks, dining promos, etc.). To help you with your research, you can use comparison websites, such as MoneyMax.ph, wherein credit cards from different institutions can be filtered and sorted according to your preferences.