22 Easy Steps on How to Achieve Financial Freedom in 5 Years in Kenya

What is financial freedom?

Why does the media love talking about financial freedom?

What do you have to do to achieve financial freedom in your life as a single mum/parent, student or teenager?

Are you strapped in debt?

Do you struggle to pay your bills?

Are you tired of living a miserable life because of your finances?

Do you want to live a life not worrying about your finances?

You are not alone.

A lot of us want to achieve financial freedom.

We see how financially successful people take charge of their money and we want to be like them.

How do they do it?

How do I rule money instead of money ruling me?

There’s good news for you today.

Anyone can achieve financial freedom.

Even on the brink of a financial disaster, you can still pick yourself up and make the necessary steps to achieving financial freedom.

These steps are what most financially successful and independent people have adopted into their daily habits to achieve financial freedom.

You can too.

In this article, we will talk about what it really means to be financially free.

I will also go over all the steps you can take today to help you attain financial freedom.

What is Financial Freedom?

Financial freedom is all about being in charge of your own finances.

This means that with financial freedom, you are able to take full charge of your finances and dictate how and why you are going to spend it, on your own terms.

When we look at examples, financial freedom can mean a lot of things.

Financial freedom can be living the life you want with your money, being debt-free, being able to retire early, having enough savings or investments or having a fully-funded emergency account.

With financial freedom, you are able to feel more relaxed and flexible with your finances.

22 Power Steps to Financial Freedom

You ask: what steps can I take toward financial freedom? Here are 22 steps you can take today to financial freedom.

  1. Know your current financial situation 

The first step you can take towards financial freedom is knowing where you are in terms of finances.

Understanding your current financial situation is crucial to establishing the right way to attain financial freedom.

If you do not know where you lie in terms of finances, start by setting a date on a calendar where you will review your finances.

Look at how much you receive as income.

What about your savings?

Is it enough?

How much debt do you owe?

What other sources of income do you have?

Knowing your current financial situation is the first step in the right direction of achieving financial freedom. 

  1. Change your mindset about money 

If you want to start taking the steps to financial freedom, then you need to change your mindset.

It is evident that our money mindset is usually influenced by the circumstances that we had about money growing up.

Some of us have a mindset about money that could be holding us back.

Your mindset about money could be that it is hard to come by or it’s not for people like you.

You have to revisit all these instances that may have shaped how you think and feel about money.

Truth is, if you think that money is scarce, then it will be.

Pay attention to your emotions when you think about money if you want to know the mindset you have towards money.

You could have all the money in the world but if you have a negative mindset towards it, you will always have this feeling that you are financially entrapped.

  1. Have financial goals 

This is another step to financial freedom that you must make today.

If you do not have any goals with your money, you will be exhausting all your income before the next month’s salary because you do not have something tangible you can put your money into.

You have to establish your money goals if you want to have a clear financial path and the motivation to achieve financial freedom.

What goals do you want to achieve with your money?

Do you want to save?

Do you want to buy a bigger house or a new car?

Do you want to invest your money or pay off some debt you owe?

When you have money goals, you will have a clearer focus on making the steps to financial freedom.

  1. Track your spending 

Tracking your spending is yet another step to financial freedom you should be making now.

If you cannot give an account of where your money has gone at the end of the month, like putting your finger on something tangible that you have done with your money, then you will always feel financially trapped.

There are so many people in this situation, so don’t think you are alone.

You can break this habit by starting to track your expenses and know how much money you are spending in a week or month.

You will be shocked by the results, but it is going to be worth it because you will know how to take the right steps to financial freedom. 

  1. Pay yourself first

Another step to financial freedom is to reward yourself at any given moment.

You must have some money that you just spend on yourself.

Spending on yourself will help you to develop the mindset and capacity to track your money because you also want to spend it on yourself.

Have a percentage of money that goes to you and do something that you love with it.

If you start from a happy point with your finances, you are more likely to achieve more with your financial life than when you are always stressed and worried about money.

Thank yourself and be happy.

Always take care of yourself every single month.

You will have a sense of freedom with your finances when you do this. 

  1. Avoid overspending 

If you are spending more than you are earning, you are digging a financial trench for yourself that you are not going to get out of.

Overspending on things you do not need will leave you living paycheck to paycheck or surviving on borrowed money.

This is a bad situation to be in because when you are in debt, it is going to be difficult for you to achieve financial freedom.

In fact, getting into debt is one sure-fire way to make yourself feel financially trapped.

You need to stop overspending and create a budget for what you need.

This is the right step towards financial freedom.

  1. Familiarise yourself with your debts

I’m not saying you pay off your debts yet.

Before you can start paying off your debts, you need to be aware of what these debts are.

If you have numerous debts, start by listing them down.

You have to give the debt name, type and interest rates.

You have to just gather information first.

When you familiarise yourself with debts, it will jolt you into action because you will realise it is not as serious as you thought and that if you commit to it, you will be able to pay off your debt sooner.

Don’t just bury your debt in the sand.

Take this step to help you achieve financial freedom.

  1. Have a debt payment plan

Pick a debt payment strategy.

There are different debt payment strategies you can use to pay off your debt.

We have the snowball strategy where you pay off small debts and only make minimum payments on the rest of your debt.

We also have the debt avalanche strategy where you pay high-interest debts first or the debt consolidation strategy where you combine all your debts into a single account and pay them off.

You only have to pick a debt payment strategy and stick to it until your debt is paid off.

Picking the right debt payment plan is the right step toward financial freedom. 

  1. Pay off debts 

Paying off debts is a mandatory step to financial freedom.

Make sure that you are not neglecting your debts, making minimum payments or paying them off at a later time when you have been charged extra fees.

You need to get yourself out of debt in order to achieve financial freedom.

A lot of people talk about having debts hanging in their necks and it has made them live very miserable lives.

Do not do it like them.

Once you know the debts that you have and have picked a payment strategy, you can now start paying off your debts.

Just make sure you remain consistent if you want to make a difference.

  1. Have other additional sources of income 

Another step to financial freedom is to always look for other additional income streams.

If you want to achieve financial freedom, you have to get into the habit of looking for different income streams.

You cannot just rely on your 9 to 5 job to get you to your financial goals.

If that’s what you are doing, then you are as short-sighted.

You need to widen your scope.

You can start a side hustle like having an eCommerce store that you’ll be running aside from your normal job.

Make sure you can earn money both actively and passively to get you out of debts and enable you to save and invest more.

  1. Invest in your future 

This is a good step towards achieving financial freedom.

When you invest in your future, you will be more financially secure in the long term.

For example, if you are planning to buy a house in the coming years, you need to start saving and investing as early as now.

If you are using credit cards, then you need to build your credit score and have a good payment history if you want to qualify for any future loans you are going to take.

Investing in your future is a step in the right direction to financial freedom.

I always tell myself to think in the long term when it comes to my financial future. You should too.

  1. Start saving for retirement 

If you value your future self more than your current self, take this step to help you achieve financial freedom in the future.

Get into the habit of planning and saving for retirement.

You will not be working for the rest of your life.

You have to make sure that your future is financially secure once you stop working.

One way to do this is by starting to save for your retirement as early as now.

Have a retirement saving plan and goal and do not forget to execute this habit.

If you do not plan for your retirement now, then the chances of you achieving being financially free in your coming years are very slim.

  1. Live within your means 

A lot of people want to live above their means without realising the amount of damage this lifestyle brings.

You do not have to own the most expensive items or go to luxury places to prove that you are worth more than your Net Worth.

One step to financial freedom is to always live below or within your means.

This will allow you to better spend your money, only on the things that you need. 

You will also be more comfortable this way.

Avoid lifestyle creep or keeping up with the Joneses if you want to achieve financial freedom and success.

  1. Monitor your credit card report 

Before you start making your credit card payments, you need to check your monthly billing statement.

Look at the transactions listed to make sure that they are accurate and that there are no errors or fraudulent activities going on.

Review the charges on your account every few times to make sure that things are correct.

If they are not, then you need to call the credit card company’s customer service and have them correct these mistakes sooner.

You cannot be too careful here. If you want to achieve financial freedom, you cannot skip this step.

You may end up being strapped in debt that you don’t really know about.

  1. Have a budget 

Budgeting gives you a spending plan for your income.

When you budget, you will create a list of all the important bills you need to pay and you will also avoid working outside the budget on things that you do not need.

Write down the things you use.

Look at the major things you need.

The ones that you spend on.

Budgeting is supposed to be a simple process.

You cannot get out of the financial dip without making a budget.

A lot of people have said that budgeting has really helped them get up from the financial trenches.

They understood themselves and they eliminated unnecessary expenses and debts.

This is a good step to make to financial freedom. 

  1. Get a financial coach 

This is another practical step to financial freedom that you should think about today.

You need to understand the importance of teamwork.

You cannot do everything alone.

There is so much to learn in the world of finance and if you can find a reliable and credible person who can take you through this journey and help you achieve financial freedom, then you are in luck.

Get into the habit of seeking financial advice from a financial advisor or have an accountant who is going to help you with your books of account.

You have to find trustworthy people who are going to propel you towards achieving financial freedom.

  1. Gain financial literacy 

Financial literacy is a very important life lesson that is sadly not taught in the traditional schooling system.

Becoming financially literate is another step towards financial freedom.

If you want to understand how money works, then you have to invest your time into gaining some financial literacy skills.

Start with the basics and gain the necessary knowledge and understanding of various topics in personal finance such as saving and investments.

Once you have familiarised yourself with these financial matters, it becomes easier to know how you can achieve financial freedom. 

  1. Cut back on expenses 

Once you have realised that you are spending a huge part of your income on expenses, you need to do a reevaluation and consider what is and what is not important for you.

Cutting back on your expenses will help you save a lot of money that you can later use to invest or build an emergency fund.

Create a list of what is important to you and then list those expenses which you can do without.

When you take this step, you will realise how flexible your money is if your money was tight at the end of every month.

This step will propel you towards achieving financial freedom. 

  1. Automate your finances 

This is a very important and common step to take if you want financial freedom.

Oftentimes when financial decisions like investing are left up to you, you will end up diverting the funds to serve other purposes.

If you can make your money disappear automatically, then you can achieve financial freedom.

You can inform your bank to automatically cut a certain amount of money from your account to be invested in your investment area of choice.

These steps should happen on their own without your intervention.

When you automate your investment, you will save yourself a lot of effort and it is going to be easier to build accountability.

  1. Negotiate 

This step is very important for financial freedom.

When you feel you are dissatisfied with your salary or the interest rates on a debt you owe, you can always ask for negotiation.

You can talk to your boss about a pay increase or call your creditors and ask them to reduce the interest fees.

However, you have to have a good work ethic and an outstanding debt payment history if that is to happen.

If the negotiation lies in your favour, then you are one step closer to achieving financial freedom. 

21. Enjoy your money – money is a resource/ tool – USE IT

22. Give back

What are the Reasons for Saving Money?

The reasons for saving money include:

Purchase wealth

Build wealth

Saving money sounds cool – at least I have money somewhere

You become obedient – you understand how to keep promises to yourself and others

Have the freedom to buy the experiences you want

The idea of achieving financial freedom should be your biggest motivator when you are taking these steps towards this financial goal.

Financial freedom may seem elusive, but there are people who have reached that level.

You can too.

Being able to live a financially stress-free life is everybody’s dream.

Being debt-free is one sure-fire way to know that you have taken the right steps to financial freedom.

Look at your financial situation now and plan how you are going to manage your finances better.

Diversify your income.

You want to make sure that you are not caught up in the financial rat race and most of all, attain financial freedom.

It is also important to know that these steps will not give you instant results, so you need to be patient and consistent.

Do you want to achieve financial freedom in 5 years or less?

What are you doing to achieve financial freedom?

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