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True freedom comes from being empowered to do the things that you value and pursue the lifestyle you desire. This often requires detailed planning and involves various aspects of your personal lives.
What Is Freedom Planning?
At its heart, freedom planning gives you more control over your everyday lives. Such plans tend to be long-term, and aligned with your lives – career, lifestyle aspirations, and personal and financial obligations.
Those on the final stretch to retirement may wish for more meaningful work. Others may view freedom as walking into the supermarket and not worrying about the price of anything they wish to pick up. Young parents may wish to take time away from the corporate world to spend time with their children.
While it may sound like a paradox, the more you work on your plans, the greater the freedoms you can enjoy.
Freedom Planning Goes Hand-In-Hand With Short-Term Planning
Freedom planning and short-term planning have different emphases, and together, both will help you get to your objectives.
Your short-term plans focus on your immediate financial concerns. For example, squirrelling away an emergency savings fund or saving up for your BTO renovation are straightforward plans that help you become more financially secure. Typically, you can follow simple rules of thumb, such as setting aside 6 to 12 months’ worth of emergency savings or about 10% of your home value for renovations
As you gain motivation with the small wins, you can incrementally reach for your longer-term freedom plans, e.g. building an investment pot, setting time aside for a workout each week, providing for your ageing parents, and other things you value.
How To Start Freedom Planning?
Freedom planning must be customised based on your unique financial situation, as well as your needs and desires. That’s why it is worth taking this seriously and mapping it out thoughtfully.
To begin, you need to have a good overview of your finances. This includes being vigilant over financial opportunities (i.e. having more to invest, identifying expenses you can cut down, insuring yourself for the right amount) and threats (i.e. seeing your net worth stagnate, constantly spending more than your budget, not planning for major upcoming expenses), and keeping a good tab over your cashflow each month. What’s useful is to create a monthly budget and an expense tracker to see if you are staying on course.
You should aim to minimise debt and aggressively pay down those you already have, starting off with the highest-interest debt. Apart from having less mental stress from having to remember these payments each month, you can now redirect funds to your investments.
Saving and investing are what will eventually replace your salaries and give you financial independence to choose what you want to achieve in your life.
As with any long-term financial plan, you have to review and track your progress. Your financial situation or your desired lifestyle may change along the way. The beauty of plans is that there is flexibility in adjusting and further customising them. Plans also require you to be disciplined and committed over time to achieve your short and long-term goals.
Being Free Is A Mindset, Not A Number
Chasing after more and more money is unlikely to make you proportionally happier. On the other hand, thinking about what gives you fulfilment will.
So, think about what suits you best. You can dream big or small, there is no right or wrong approach. Remove limiting beliefs that hold you back in making plans that you value. It’s not necessary to follow the norm if it’s not what you desire. Freedom planning enables exploration, aspiration and curiosity.
Once you have found that sweet spot in freedom planning and fulfilment, you will realise that you have gained more control over your finances. You will have a clearer view of how things will go; maintain balance in your life is much easier and your aspirations look more real and become more achievable.
Getting started on freedom planning can be easy if you have the right mindset and guidance. Speak to a Prudential Financial Consultant and visualise a better future today.
The information in this article does not necessarily reflect the views of Prudential. Prudential does not represent that such information is accurate or complete and should not be relied upon as such.
This article is for your information only and does not consider your specific investment objectives, financial situation or needs. We recommend that you seek advice from a Prudential Financial Consultant before making a commitment to purchase a policy.
Information is correct as of 21 July 2023.