Steps to achieve Financial freedom
During our childhood years we all dream of what we want to achieve when we are all big and grown up. Sadly the majority of us all forget about our dreams and just fall into the trap of surviving the various challenges life throws at us.
Financial freedom has a different meaning to different people, but yet it is a dream that we all share in. Some of us are lucky and either achieved it already or are close to doing so; others still have a lot of hard work ahead of them. The good news, however, is that it is not a distant dream, it can be achieved.
If you take the following four steps you can achieve financial freedom:
- Where are you now?
Take a good look at your current financial situation. Take stock of your finances, be realistic and include everything you own and its value.
Not only obvious things like your car and house but include any valuable collectables, any other property, etc. Also, include your annual income and any additional revenue from investments or other work you do.
Make a list of your debt and include any loans, your mortgage and credit cards. Subtract these two figures to calculate your net worth.
- Talk to your spouse/partner
Most couples don’t discuss their financial goals with each other. This discussion should include your goals for the future as well as your current lifestyle and short-term goals. Before you can achieve any goal, you need to ensure your life partner has similar dreams and will be sharing in your motivation to achieve your goals.
- Set your financial life goals
Achieving a goal does not just happen, you need to make it happen with hard work, dedication and a clear plan. You need to set clear, well-defined goals for yourself and a plan on when and how you will be achieving it.
Goals are to be set into three distinct time frames. For example; (1) Short-term will include cutting your expenses by 5% within the next three months or settling your credit card within the next six months. (2) Medium-term will include planning for an overseas holiday or a nice deposit on your own house within the next two years. (3) Long-term will include a good or even early retirement.
- Get started
To achieve your goals you need to start taking action immediately. These steps will all depend on your current financial situation and can include the following:
- Track your daily spending and adjust where necessary. Cut down on your takeaway dinners, the daily cappuccinos, unnecessary travel and even your clothing shopping.
- Pay with cash and eliminate debt. It is much easier to keep track of your expenses when you use cash for your daily expenses. Ensure also to pay off debt as soon as possible to avoid any unnecessary interest payments. Try to settle your monthly credit card expenses.
- Save at least 10 – 15% of your monthly income. Ensure you save as soon as you receive your monthly paycheck. Don’t wait to save after you’ve covered your expenses – realistically that never happens.
If you feel that financial independence is impossible due to your current debt situation, please give Debt Rescue a call. Together you can take the first steps to achieving your financial freedom.