If you were to poll everyone in any given room on whether they want to rich or not, it would most likely poll at 100%. We want to have wealth, but mostly it’s the things that wealth gives us: financial freedom. You see, having financial freedom means we don’t have to worry as much. We can relax a bit.
Right now, there are so many people working themselves to near death just to live paycheck-to-paycheck. It’s an uncomfortable feeling, not sure how any disruption in the system tomorrow could set you back financially. Could another recession force you out into the streets? What about all your debt?
You don’t have to be rich to have financial freedom. Here are ten things you can do today to help you reach that point sooner!
1) Determine where you’re at right now.
The simple fact is, you can’t figure out how to get to where you want to be if you don’t know where you’re currently at. Sit down at the table (with your spouse, if applicable) and go over everything. What are you worth? Are you in debt? Are you paying off your mortgage? How long until the car is paid off?
Go through your assets, subtract liabilities, and find out your overall net worth. It can be difficult to see any issues with your budget when you’re not proactive about seeing it all listed together. If you see you’re spending more than you’re bringing in and relying on credit to get by, then you have some important decisions to make.
But you won’t get there until you figure out this step first.
2) Exchange credit for debit
Unless you’re working on building better credit, your credit cards are only holding you back. We get into the cycle of buying everything on credit and paying MORE for it later with interest and fees. Is the convenience really worth spending more in the long run? Try to spend only what you can afford right now, rather than borrowing.
3) Give yourself an allowance.
Even though step #2 says to use your debit card rather than your credit card, you can take things a step forward by using cash more often than cards. Determine what you need ahead of time for regular expenses, pull out the cash, and put the rest into savings. It’s easier to spend, spend, spend when you have a card, but can’t track what you have left like you do with cash.
4) Cut spending!
I’m sure you knew this was coming, but it’s true! Right now, in this modern technological age, we spend a lot of money on gadgets and plans. They are all convenient, but do you really need them? Can you survive on Netflix and Hulu while cutting the cord? That’s potentially $100 per month savings right there.
Look at your phone bill. Do you need unlimited everything, or can you survive perfectly fine with a cheaper plan? Can you plan to eat in more often and save more throughout the year? These are all conscience decisions you can make to drastically improve your bottom line. The only way to lose weight is to eat less. The same lesson applies here.
5) Plan your goals.
You probably have the same big goals I do. It’s one thing to have a dream in the back of your mind, and another to actually sit down and do the math. You can’t hope your goals into existence. No, you must plan for it and scrape together everything you can. It will be a journey getting from Point A to Point B, but it should be an enjoyable one.
Where do you see yourself next year? In 5 years? In 10? Think of all your short-term AND long-term goals and write them down.
6) Strategize your plan of attack.
The great thing about writing down your expenses and figuring out what to cut is you can actually see your plan coming into fruition. If you know you can cut “X” amount of dollars from your budget and stick that into a savings account, you’ll have an approximate idea on where those savings will take you.
You may not save a ton, and that’s perfectly fine! It’s always good to have a bit of extra saved in the bank, which brings us to the next point:
7) Have an emergency fund.
It was said recently that most people don’t even have access to $400 if they needed it for an emergency. That’s a sad statistic! We’re so busy living above our means and charging everything to credit (and paying more for it later) that we don’t actually think about our safety. It’s a good idea to have at least $1,000 in savings for an emergency.
8) Check your taxes.
I know in the previous points, where I say you should look at cutting your spending habits, you didn’t think I was going to suggest hiring a tax accountant, but it might very well be worth it in the long run! Let’s face it, most of us are clueless and do our best to file as accurately as possible. Because we’re not experts, so we could be missing out on huge deductions we had no idea were possible!
9) Start paying off small debts.
Think of debt as the amount of weight you need to lose. You might step on the scale and see a large number, causing you to panic. How can you possibly lose all this weight?! The answer is simple, one pound at a time. The problem is, we think about ALL the weight we need to lose rather than the short-term progress and results we’ll experience.
Start cutting into your smaller debts and get those out of the way first. It will build your confidence and allow you to see yourself slowly gaining control of your finances. It’s a cool feeling to free yourself out from under its worrisome burden!
10) Keep your plan with you at all times.
Once you get all your numbers organized, write up your goals, and make a plan of action, turn your notes into canon. Officially recognize your plan as a way to move forward and stick with it. It will be difficult. There will be unforeseen events that pop up. Do not fret! The plan is solid and it will get you through!
