Freedom. Liberation. Release.

As we celebrate Freedom Day tomorrow, what do you yearn to be free from?

While some could be wanting to be free to say and do whatever you want, whenever you want, others may want to be free from the chains of debt.

These could be loans and retail accounts, and the current economic times, with the increasing interest rates and cost of living, have made things difficult to continue servicing your debt.

National Debt Advisors CEO Charnel Collins says:“In an age of instant gratification and readily available credit, consumers have the freedom to make decisions that satisfy their needs and wants. However, if not closely managed, these decisions can leave you stuck in a debt trap.

“The current economic environment adds a layer of challenges as consumers grapple with the effects of loadshedding and a higher interest rate. There is no doubt that during these tough economic times, debt continues to be a heavy burden to bear for many households who are struggling to make ends meet,” Collins says.

She says to attain freedom, one needs discipline, perseverance and patience.

“It is an inherently long-term financial goal that demands delayed gratification.

“According to global economic indicators tracking site, Trading Economics, the household debt-to-income ratio in SA is expected to reach 69% by 2024, which is way above what is deemed a ‘good’ score – 36%.

“The constant battle to overcome debt often leaves little to no room for seeking financial freedom. Collins describes financial freedom as the ability to make life decisions without worrying about the financial consequences.

“You are able to afford the kind of life that you and your family desire because you have enough savings, investments, and cash on hand – you’re financially prepared for whatever life throws at you.

“Your money beliefs shape your money mindset, shifting that in favour of your future [goals] will assist you in achieving financial freedom,” she says.

Collins gives six tips to follow on the journey to financial freedom:

• Set financial goals: Identify your short–term and long–term financial goals. This will keep you on track and enthused in executing them.
• Stay on a budget: Set up a spending plan that accounts for your earnings, expenditure, and savings. Wherever possible, stick to the budget and avoid unnecessary expenses.
• Create an emergency fund: Set a fixed amount of your monthly income to create an emergency fund that can be used to cover unexpected costs.
• Pay off debt: Avoid incurring debt, and if you do, pay it off as soon as you can to save money on interest.
• Increase your income: Find ways to earn more money by exploring various secondary income options available or by finding a higher-paying job.
• Keep track of your progress: Review your finances on a regular basis and track your progress towards your financial goals. Stay on track by adjusting your plan as needed.

mashabas@sowetan.co.za