09 Jul How to Gain Financial Freedom
Gaining financial freedom may seem impossible but it may not be as difficult as it seems. The hardest part of gaining financial independence is sticking to your goal and focusing on your plan. Once you are able to gain that focus you can start on the road to gaining your financial freedom. Follow these five tips to create your personal financial strategy.
Create a Financial Plan (Budget)
First things first, make a plan. Budgets are the perfect way to start making good money habits. Create a plan adjusted to your lifestyle or where you want your lifestyle to look like. Take time to determine your cost of life. Sit down and take a look at what your bills cots, how much you want to put towards savings, and how much you want to have towards spending. Make sure to not overspend and not put any money towards savings or restrict your spending so much that you create stress for yourself. Your budget should be a guideline and a happy medium between spending and saving.
Track Where your Money is Going
Tracking your money is one of the most important steps in gaining financial freedom. This is called tracking your cash flow and it can give you an idea of what you are spending your money on. Start by making note of what you spend your money on daily, per week or per month. Divide spending into different categories that are specific to your life such as bills, loans, groceries, entertainment, etc. This first step will give you a sense of control over your expenses and make it easier to make financial changes.
After you track your spending you need to adjust it accordingly. If you notice expenses are higher than your income, find areas in your spending to cut back on. Remember having slip-ups on spending is normal, it is all part of the process.
Pay Yourself (Invest)
Investing may seem scary but it is not as complicated as it may seem. Do not think of it as investing money, but paying your future self. Start small and put 10% of each paycheck into your savings account. As you continue increase the percentage and diversify where your money goes. Instead of 10% maybe put 25% of each paycheck to a retirement fund.
Set Life Goals
Last but certainly not least set life goals for your financial future. Think about where you want to be financially in 10 to 20 years. Ask yourself questions such as, do you want to own a home, where do you want to retire, when do you want to stop working. Make a list of your top three financial goals you wish to complete in the next 10 to 20 years and stick to those goals. Structure your finances accordingly to achieve your vision.
To make sure you are on track make sure to review your plan at least once a year and update if necessary.