Do you long to quit your boring nine to five job? Do you wish you were not living from paycheck to paycheck? Is your dream to enjoy your life and not worry about money?
Well, you are not alone. In fact, you are one of the countless individuals yearning to live in financial freedom forever.
You will find listed below a few notes on the course of action to lead the way to your goal.
Research shows that only one out of twenty households has a couple who openly discuss finances. This means that for others, the parents do not talk about each other’s financial goals.
This is a very big mistake. Couples should work together on a common financial goal. If the children are old enough to understand, they may be informed as well.
Not only will this ensure that you will reach your goal faster, it will also improve family ties. The family as a unit will be able to strengthen each other’s resolve.
As a start, start opening up to your spouse. Talk about your financial aspirations and the kind of lifestyle that each one has. Take note of all this and create your goals together.
Make a list and identify what is the immediate concern and what can be put off later. Be realistic and open minded.
Find out What You Are Worth
Okay, so now you have a plan. You have a goal in mind and are starting to work on it. Before doing anything else though, I suggest you find out how much you earn.
List down all your money sources. If both you and your spouse have a job, honestly write down how much each earns. If you have other sources of income, write it all down.
Find out How Much You Owe
Like most people you must have gathered up debt here and there. If you have credit card bills, loans, or mortgages, take note of all of it.
If you are up to your neck in debt and are afraid to see it all in paper, don’t be. You are taking a hold of your finances and are on your way to freedom.
Do not be overwhelmed with these. You will be paying them off soon. Pick one with the highest interest and religiously pay more than the minimum.
If you have extra cash, come to terms with your creditor. Negotiate for better deals if you plan to pay a lump sum.
Reduce Your Expenses
Before you can reduce your expenses, you have to pinpoint which ones are unnecessary. Maybe you can forego travelling to another country.
If you frequently eat out at expensive restaurants, try minimizing or eliminating this habit. Maybe you can cancel that magazine subscription of yours.
Identify these things and take them out. Learn to spend less than you earn. This will give you a bit of breathing room and be on your way to financial freedom.
Build an Emergency Fund
An emergency fund is something you set aside to address unexpected needs. Around 3-6 months worth of your expenses should be sufficient.
If you have an emergency fund you will not be tempted to get more debt. Just remember not to use it for expected or routine expenses. It is not to be used to purchase your wants either. We will tackle that in the next step.
Either for retirement, your child’s education, travel, or even that flat screen TV. Start saving up for things that you want.
If possible, set up different savings account for each. If opening a bank account gives too little interest, save it in the money market or in mutual funds.
If you are living beneath your means and are no longer in debt, chances are you will have surplus cash at the end of the year.
Instead of spending it in trivial things, consider investing it in business ventures which can give you passive income. Lately the trend is to invest in stocks and bonds.
Shop around and inquire before committing to anything. Know where you stand, what you gain, and what the hidden costs are before investing.
Share Your Wealth
Lastly, when you have attained financial independence, be generous. Whether you are religious or not, bless others with your blessings.
Share a part of what you have to a worthy cause. As the saying goes, bless others so you may be blessed as well.