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6 steps to achieve your financial freedom

8 mins read
by Craig Rickman
Last updated Monday, December 11, 2023

If retiring on your own terms is what you aspire to, here’s everything you need to know to help achieve financial freedom.

When you hear the words ‘financial freedom’, what springs to mind? Swimming in a vault of cash like Scrooge McDuck, or simply having enough money to not need to work? 

For most of us, while we would love to have billions in the bank, it means the latter. All we want is to accrue sufficient savings and investments to be able to spend our lives as we please. 

Due to the amount you need to tuck away – which according to some calculations is at least 20 to 25 times your annual expenses – achieving financial freedom has never been easy. But the cost of living crisis is making it harder to reach than ever before. 

New research by Rest Less, an online community for the over 50s, found that there are significantly more over 70s in the workplace today than there were a decade ago. 

And according to Stuart Lewis, chief executive at the organisation, rising costs is the chief aggressor. 

“We see many older workers today who are struggling to make ends meet amidst the cost-of-living crisis, with inadequate retirement savings meaning they must work in order to survive financially.” 

With everyday life more expensive than two or three years ago, retirees’ savings pots are not going as far as they used to.

Many face the unenviable choice of either working longer or retiring with less money than they would like. 

For those of you yet to retire, the current economic headwinds do not necessarily mean financial freedom is no longer in reach, but you might need to adopt a different approach.  

Discover what financial freedom is and how to go about achieving it below.

What is financial freedom?

Financial freedom refers to a state of financial independence, where individuals have the resources and ability to live life on their own terms, without being constrained by financial obligations or limitations.

This means having a dependable cashflow without worries about how to pay your bills or unforseen expenses.

Step 1: Make a plan

Unless you’re really, really lucky, achieving financial freedom isn’t something you can wing.

Just as you should avoid running a marathon without months of training, you can’t expect to retire on your own terms without saving hard and making sacrifices during your working years. 

The great news is you get to decide what the plan looks like. And perhaps more importantly, you get to define what financial freedom means to you.

The key is to set clear and achievable goals and work towards them as soon as possible. 

So, what should these goals look like?

They include: 

  • Deciding how to spend your free time

  • Working out how much money you need to live the lifestyle you want (it’s wise to include a breakdown of essential and discretionary spend) and how much you need to save to get there

  • Where this income will come from

  • The age you plan to stop working

  • Where you would like to live

I recognise that this exercise may be easier for those of you closer to retirement as your plans will have likely firmed up at this point, but there’s real merit to start planning when you’re young.

And in any case, remember it’s your plan, so even if your first draft is a bit rough, you can shore it up along the way.  

That leads us nicely onto the next key point. 

Step 2: Review your plan, regularly

Every robust financial plan needs regular care and attention. As we’ve seen recently, economic factors such as inflation, interest rates and stock markets change as time moves on – often quickly, and sometimes sharply.

These can affect whether your plan stays on track. 

Your personal circumstance will also shift, giving you either more or less scope to save and invest. You might start earning more money, inherit a windfall, or have children

It’s important to frequently check where your plan is in relation to your financial goals.

This should happen at least annually but could be six-monthly especially as retirement draws closer.  

Taking stock of where you are will enable you to make the necessary adjustments to keep your plan on track.

This might mean switching savings into riskier funds to increase growth potential, rebalancing asset allocations that have drifted, upping the amount you save regularly, or paying in lump sums to make up for lost ground. 

What you should avoid is constantly switching funds to the newest and most exciting investment opportunities.

This is because constantly buying and selling investments to capitalise on market highs and lows can often do more harm than good. 

Step 3: Start saving and investing now

It goes without saying that you will want to reach financial freedom as quickly and easily as possible. 

And whether you've recently entered the workplace or are fast approaching the age you want to retire, the action you take right now will make the biggest difference. 

If you’re in your early 20s, retirement is probably the last thing on your mind – unless you're part of the FIRE (Financial Independence, Retire Early) movement who aim to save aggressively to retire before 40.

For the rest of you, socialising, travelling, and buying a house will take priority, and understandably so.  

But the earlier you start saving for your retirement, the better as the longer you for invest the more you will benefit from compound growth.  

There are other benefits, too. When you start a new job, your employer will not only enrol you in a pension, but also pay in at least 3 per cent of your salary - in some cases a lot more - as long as you pay in 5 per cent.

Making the most of this may enable you to either retire earlier or help you accrue a much bigger pot.

What’s more, you get tax relief on everything you pay in and any growth is free from tax too, giving your savings an additional boost. 

It’s equally important to make use of other tax-efficient wrappers such as ISAs (Individual Savings Accounts), which will give you more options down the line. 

Learn more: what are the best savings accounts for the over 60s?

Step 4: Prioritise becoming debt free

If you have outstanding debt such as mortgages, credit cards, and loans, achieving a life free from money worries can be a challenge. 

As we’ve seen recently, interest rates can change quickly, and debt that was once manageable can start taking a bigger chunk of your monthly income, which can not only affect your lifestyle but also your wellbeing. 

This doesn’t necessarily mean you should direct all your disposal income towards paying off your mortgage during your working life.

You must also consider maximising other areas of your finances, such as your pension. 

But making sure debt is paid off before you intend to stop working is both financially prudent and can bring the peace of mind that every penny of your income is yours. 

Step 5: Don’t rely on your elders

I appreciate that it’s hard to ignore an earmarked inheritance when planning your financial future.

Baby boomers are collectively sitting on trillions of pounds of wealth right now, largely thanks to soaring house prices.

And over the next two to three decades, this wealth is set to pass to their offspring. 

But relying on a future windfall to achieve financial freedom is risky. Not only do you have no idea how long your parents will live, but due to rising care costs and the growth of products such as equity release, there’s no guarantee there will be anything left for you to inherit once your parents pass. 

It’s therefore wise to consider any potential inheritance from your parents or grandparents as a bonus, enabling your financial future to remain in your hands. 

Step 6: Seek expert advice

We all need a bit of help from time to time, especially when it comes to managing our finances.

As the financial landscape can be complicated, making the right decisions isn’t always easy. 

Regulated financial advisers are experts when it comes to helping you achieve the future you want. 

They will take the time to learn about what financial freedom means to you, take stock of where you are currently, and put together a bespoke plan to help you and your loves ones achieve your life goals. 

The service qualified advisers provide includes adapting your plan as time moves on to ensure you continue to make the most of all the options available to you and that your plan stays on track. 

Final thoughts

Achieving financial freedom may seem like a lofty goal, but with careful planning, discipline, and wise financial decisions, it is within reach for many people.

The steps outlined in this article are designed to set you on the path towards taking control of your finances and securing your financial independance.

While the journey requires commitment and perseverance, the rewards of financial freedom make it well worth the effort.

If you are one of the 92 per cent of the population without a financial adviser and need to find one, you’re in the right place.

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Craig Rickman
Craig Rickman is senior content writer at He has been writing about personal finance and wealth management since 2016, including four years as a journalist at the Financial Times Group. Prior to this, Craig spent eight years working as a regulated financial adviser. He holds the CII level 4 Diploma in Financial Planning.