10 Steps for Achieving Financial Freedom

Credit & Debt

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! 

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How to Fix Your Finances in 30 Days

Saving

Managing your finances can be a difficult process and even overwhelming. Many people don’t do it at all, but rather just ‘wing it’ throughout the month. Sadly, that is what leads to many expensive complications that can hinder your financial health. In reality, if you take the next month and decide to focus your attention on fixing your finances, you will be good to go.

“If you outline a 12 month or 24-month plan, often times you will be discouraged,” says April Lewis-Parks, director of education at Consolidated Credit. “It’s not small enough to see progress right away. In a short amount of time, they can see progress and understand the different steps that need to happen to get to the next level financially.”

Here’s how to budget out your money through the month.

Day 1 – Day 5: Budget!

The first real step in fixing your finances is taking the time to budget. You really need to lay out what you’re working with. Look at your monthly income. Go through every dime that you spend each month. Use an Excel or Google spreadsheet to write down every bill and every expense, down to the subscription or coffee you get at Starbucks.

By doing this, you’ll get a clear picture of your financial health. Are you spending more than you’re making? Can you find a way to save money? Look for things to cut out of your budget to give yourself more room. If you’re not saving money, you’re setting yourself up for failure in the long run, especially if you lose your job or things go downhill.

Day 6 – Day 10: Saving!

The greatest goal you can have is to save at least 10% of your monthly income after paying for essentials. Put it into a savings account for a rainy day. If you want to truly be prepared for an emergency, the best word of wisdom is to have at least six months’ worth of expenses saved in case of an emergency.

Day 11 – Day 14: Determine Basic Changes

There are ways to cut down on your spending you may not even realize. There are a lot of small basic things you can do that add up to big savings. For example, switch out your light bulbs for something more efficient. Keep your heating and cooling during the extreme weather months set a better setting and turn off at night. Clean out your dryer vents. Cut the cable bill.

Day 15 – Day 17: Banking Needs

As you get through you month, you need to take notice at your banking habits. You might be paying extra fees you don’t realize every month. You can determine how your direct deposits every month are divided so a certain percentage goes towards bills, a savings account, and spending.

Day 18 – Day 20: Healthcare Needs

Your healthcare should be a priority. Sadly, many Americans skip this crucial step, mainly because they don’t think they can afford it. It can really hurt you in the long run. Also, there might be ways to lower your health care cost. Do the research. Look at your premiums. Consider what you’re paying out of pocket. It’s all part of the process.

Day 21 – Day 23: Manage Your Credit

A massive part of financial health is managing your credit. You should know what your credit score is. Having a bad credit score can make things a bit more expensive. Your monthly payments on things like a mortgage and auto loan can be less expensive if you have a good score. If you improve your credit, you can refinance your loans to make monthly payments cheaper.

Day 24 – Day 28: Manage Your Debt

If you have debt, the goal should be to pay it down as much as possible. Whatever you’re not stashing away for savings should be going towards your debt. If you want to gain financial freedom, you can’t do it sitting on a pile of owed debt.

Day 28 – Day 30: Prepare for Retirement

You might be thinking “Wow, this is more money I don’t get to spend,” but you really will get to spend it. It can take most of your working life to save enough to survive your golden years. Unless you want to work until you’re 80, start saving now.

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When Is the Best Time to Apply for FAFSA?

Student Loan Consolidation

Every year, many college-going students apply for FAFSA, the Free Application for Federal Student Aid, to help them pay for tuition. If you’re someone who qualifies and would like to receive this student aid, then your deadline each year is June 30th. You have until the end of this month to get yours in if you want to be accepted for financial aid.

Many students often complain about how long it takes to fill out the FAFSA application, but the application actually opens up on October 1st on the previous year. That means you could’ve had your application in for 2019 in October of 2018. You’d think students were prudent and did a great job on getting their application in early, but sadly, that’s not what happens.

Students often wait too long to submit their FAFSA. They hold onto it until the deadline or even later. They put it off until the last minute and it can mess with their eligibility. If you’re a high school senior this year (2019) and plan on going to college in 2020, you should apply for FAFSA this October during your high school senior year.

Benefits of the FAFSA

There are several available federal grants available to low-income students who could use the help paying for college. One is the Pell Grant. It can offer thousands of dollars in aid towards those who need it the most. Still, in order to qualify, the student must always remember the deadlines and fill in a timely manner. Not doing so can risk thousands in funding.

Beyond federal student aid, every state has their own grants and scholarships. Each state handles their programs differently and can have a different deadline than the federal one. That means you must juggle between both state and federal deadlines to apply for FAFSA benefits. Some states expect your FAFSA to be turned in by November, which means you only have a few months to get it in.

Still, even if you miss the deadline, there’s still hope for you. The goal should always be to stay proactive and on top of your deadlines. There’s no reason whatsoever to wait and potentially lose out.

“Unless you missed the June 30th deadline for FAFSA, opportunities for limited aid (Pell Grants and Federal Loans) should still be there as long as the student remains enrolled at least half-time and meet all other requirements,” Marty Somero, director of financial aid at the University of Northern Colorado, wrote in an email. “A student should certainly check with their school on any exceptions to missed deadlines, especially if there were true extenuating circumstances such as a death of a parent.”

Other Circumstances

There may be legitimate reasons why a FAFSA isn’t filled out in time and you miss the deadline. In those cases, you will be allowed to file past the deadline. The problem in a lot of cases is ensuring you’re ready to go at the start of classes. Most institutions won’t let you begin until your complete tuition is covered in some capacity, either with grants or student loans.

“It takes a little time for the college to take that FAFSA and turn that into money for the student on the first day of class. You don’t want to delay. If you didn’t file your FAFSA before the start of class or not too soon before the start of class, you don’t want that to impact your ability to register for classes or actually attend,” Shank says.

“Earlier is always better,” he says. “The best time to start thinking about it is when the FAFSA opens the prior fall. Many individuals are first-generation college students, so it gives them more time to understand the types of questions that will be on the FAFSA. It gives you time to get your FSA ID created, and then if you do run into any troubles, there are a number of places you can reach out to that can help you, and there’s still time before your state filing deadline.” The FSA ID is a username and password that must be created to fill out and sign the FAFSA online.

There are other benefits to filing early.

“Something that I’ve seen with the families I work with is just the peace of mind that comes with meeting the deadlines,” Blontz wrote in an email. “Do you need to complete financial aid forms the week of Oct. 1? No, that’s not necessary. Is it nice to have all of your requirements in before Thanksgiving, even if you are not considering early action or early decision? Absolutely.”

Be sure to check with your college’s financial office to see when your state deadlines are for turning in your FAFSA. The best course of action is to get it done quickly so you don’t have to worry about it later.

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5 Ways to Pay Off Debts Without Depriving Yourself

Credit & Debt Settlement

One of the main reasons why people push off debts until a later time is they aren’t sure they can afford it AND keep up with their many rituals and lifestyle choices.

For example, if you go to Starbucks every morning, is that a luxury you’re willing to get rid of to save money? You can save $140/month by brewing your own coffee. If that’s a luxury you don’t want to abandon, that’s your right, but being in debt isn’t just a small problem you can push off until later.

Saving money should be your highest priority. You don’t have to give up all the things you love, though. There should be a happy medium where you get to enjoy life while handling your debt masterfully.

Here are 5 things to consider:

1) What does this indulgence mean to me?

Does it sincerely help you in some way? Maybe that morning coffee is a ritual you’ve been doing since college and it helps you get on your feet the right way. That’s great! But you’ll have to weigh the financial risk versus the reward.

The reality is, coffee in the morning can be done much cheaper and you can find a new way to wake up and be energized for the day that doesn’t involve coffee at all. If you’re unwilling to sacrifice this indulgence, then you’ll have to cut corners in other ways to make up for the pricy decision to stick with expensive Starbucks.

Take stock of the things you love and be willing to part with some of them, while keeping others. You’re going to have to figure out ways to save money for a little while until your debts are mostly paid off and you become financially free. You’ll have a lot more money to spend on the other side of debt mountain.

2) What are the benefits of this luxury?

When you sit down to write a list of all the things you buy throughout the month, whether it’s coffee, Netflix, expensive cable channels, unlimited phone plan, etc, you should be able to tackle each one and ask a simple question: what do I really get out of this? Do I need it? Is it THAT important to have?

3) Would I really miss it that much?

You might find that a lot of your spending is on frivolous things that you really can do without. There are alternatives, such as keeping Netflix and Hulu instead of cable, which will save you a massive bundle. If you think you’ll miss your local stations too much, get a TV antenna and those channels will come for free.

Again, it’s okay to keep a few indulgences, but really look to see where you can cut some of your monthly payments down as far as you can.

4) Look for bundled deals.

Right now, my phone plan offers Netflix and Hulu free. That’s a great bundle deal that saves me a bit of money each month. Let’s say you take a little more time to clip coupons for grocery shopping and go on days that offer 10 for $10.

Becoming financially free is all about making better decisions. You can do it, even if you have Champaign taste on a beer budget. Pick your battles. Eat out with coupons while cooking at home more often. Using a Kroger card at the store can save you $.10/gallon on gas, which adds up.

5) Add up your total potential savings.

After making your list and writing down the cost each of each of those things, you’ll start to see the big picture. Simply removing costly cable and eating at home will save you as much as $3,000 in a single year! I bet there’s a lot you could do with that extra money, which includes paying off debt and/or putting it away for a rainy day.

The secret to financial freedom is not getting caught up in thinking you need this or that and splurging at a time when you can barely afford it. Many Americans have debt up to their eyeballs, but don’t know how to say “NO!” to themselves when the next shiny toy comes out. This is why debt is at its highest levels in history.

Sacrificing some now will create a more successful you in the long run.

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