5 Simple Steps to Achieve Financial Freedom

We don’t learn financial literacy in schools or homes. Most of the time, it’s just self-thought. So if you know someone, maybe a friend who is knowledgeable about it, this might be the perfect time to reconnect with him. Reality strikes; not everyone has that kind of friend. Luckily, the internet is already accessible for most of us to learn this quickly. While you would like to achieve this quickly, you might also want to consider your current financial status, knowledge, and of course, be realistic.

What is Financial Freedom?

In layman’s words, financial freedom is just being able to do the more essential things without worrying about money coming in. Some would like to have a nice dinner with their family in a restaurant without having to look at the prices on the menu. Some would like to shop in their favorite retail store without looking at the price tag or taking a blissful vacation, probably outside the country, whenever they feel the need to have some. Others would like to show their presence in every milestone of their family member without being tied to your corporate responsibilities.

I know someone who describes financial freedom as going to Thailand to buy the sweetest lanzones when she craves them. I guess lanzones is her happiness. She’s indeed a perfect example of someone who enjoys being financially free.

Why do you need Financial Freedom?

Being financially free is, of course, more than buying material things. It’s about enjoying life and not worrying about anything related to money. If you already have a family of your own, then being financially free is giving your child a quality education. Another example is when you, or any member of your family, become sick, and then you can still be confident that you can get the treatment you need and eventually bounce back to where you left. While money is not the most essential in life, it’s good to know that most of the things we want and need require it.

5 Simple Steps to Achieve Financial Freedom

These are the recommended steps by Randel Tiongson to achieve financial freedom in his book “No Nonsense Personal Finance.” If you are looking for a guide, this can help you be in the right direction.

1. Improving Cash Flow

The first step toward financial freedom is to improve your cash flow. Earning more is not enough, so you must also spend less. That’s a problem if you earn more and spend more. Now, you might be asking how you can make more money. You can look for jobs that pay more, try selling online, offer your services, sell homemade goodies, or get a part-time job. Always try to find something you can earn and enjoy.

2. Getting out of Debt

The next step is to get out of debt. Having debts loaded with a hefty interest rate is terrible for your financial health, primarily those debts from consumer products that don’t add value to you. The best way to get out of it is to list them from largest to smallest. Try to pay the smallest first, as they are easier to settle. You’ll be motivated as your debts become fewer.

3. Setting Up Your Emergency Fund

An emergency fund is a liquid fund you can easily access in times of great need, like a sudden job loss, when you need immediate medical care, or when you face any financial disaster. Having this fund means you are ready to face them head high when it happens; also, you don’t want to be on the act of mercy of your family and friends because you don’t have something to lean on, right?

READ MORE: Sun Life Remains the Top Insurance Company in the Philippines

4. Getting Protected from Life’s Risk

It would be best if you got yourself insured. This step is the most neglected part, followed by setting up an emergency fund. It may be hard to swallow the benefits of life insurance, but remember that you don’t get it because you’re going to die; instead, it’s for the future of your loved ones should anything happen to you. It will not make them rich. But it will prevent them from going poor. Lastly, it will not allow your dreams for them to die with you. After all, you’re not working hard only for yourself, so don’t forget to seal your dreams with life insurance.

READ MORE: Sun Maxilink Prime | The Best-Selling VUL Plan from Sun Life

5. Investing for Your Future

Many mistook this as the first step toward financial freedom, but guess what? It’s not. First, you must build a robust financial foundation by following the first four steps before investing. Why? Because what if you encountered financial disaster along the way? Would you be able to take it if you only have your investment, especially in your early years of investing? That’s a firm no. That’s why you need to have a contingency plan.

Investment can be stock market, foreign exchange, commodities, bonds, securities, etc., i.e., if you are a risk-taker and would like to maximize the potential of your money. If you are relatively new to this, you may consider getting a UITF offered by banks and a mutual fund from insurance companies which are diversified and easier to maintain.

How to Get Started?

Some can do all the steps at once, but it can be overwhelming to do for others. Try doing the first step, which is improving your cash flow. After that, gradually do the remaining steps until you reach the investing part. If you’ve already done the first few steps, you may jump to the most appropriate level for you. Honestly, these steps are just recommendations. Feel free to shuffle them if you find them more effective. However, I recommend having the steps in order. They support each other that way.

Final Thoughts

Financial freedom is not just about having money and making it grow. It’s about removing money from the equation, as often it becomes a hindrance to your personal growth and enjoyment. Remember that when money is not a problem, then that’s the time you can truly enjoy your life and pursue your passion.


10 thoughts on “5 Simple Steps to Achieve Financial Freedom

  1. Hi Federico! As far as I can remember I signed up for a mutual fund or savings with Sunlife with my previous employer however I have withdrawn all my funds. I’d like to know how can I check if my account is still active coz I’m planning to continue and get an insurance or investment plan. Thank you and God bless.

  2. I’m actually planning to get an insurance. Is it advisable to get 2 same insurances (insurance+investment) with different insurance company? The first company is more promising when it comes to insurance while the other one possess the latter one. Let’s just say instead of putting 3k premium per month in one insurance company, you’ll split it into half. Your insight will be highly appreciated.

    1. Hi Cherry. So it’s like getting two Php1,500 per month plan? Don’t you want to consider getting a term life insurance from “Company A” and invest the difference to a mutual fund of “Company B.” I think this is more applicable to you because if you’ll get two VUL plans, then it means you will have insurance coverage in both companies, the same with investments. Thus, it will somehow negate your purpose of getting the “best,” or should I say “promising” to you.

      It is like you have a good and not so good life insurance coverage, and then a promising and not so promising investment. Well, the choice is really up to you. It’s just my two cents. Thanks 🙂

  3. Hi Sir Suan. Is there any financial literacy program or seminar that Sun Life offers free of charge? Kinda interested to learn more about the financial freedom especial in insurance and investment. Btw I’m a fresh ECE grad and just recently got my first job. Just want to expand my knowledge in finance and investment to make something great in life haha. Thank you sir.

    Ps. PUP ECE grad here sir.

    1. Hi JR. Yes, we do have events like that from time to time but we can also do one-on-one as well. This is better because you can ask your questions easily and we can do financial planning on how to achieve your financial goals in the future. Btw, I added you on fb. Hoping we can talk more about it soon.

      Nice to know. I bet you have your fave profs we can talk about it too haha. Cheers!

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