We all want financial freedom, but many times the question is, what exactly are we willing to do to gain such independence. Like most things in life, financial freedom can not be obtained without hard work and determination. Most of us must work hard for our money. And though it feels rather nice when the paychecks come rolling in, financial freedom begins to define itself in those of us who actually get to see the money from those paychecks for more than just a few passing hours or days. Families across America have little to no savings. And for too many of those families it is simply due to a lack of better money management.
As Americans, we love to treat ourselves, and others too. We love to dine out, and shop, and entertain ourselves on Friday nights and on our weekends off. But to obtain financial freedom, you may have to restructure self-indulgent activities and begin to manage the future of your money as much as your current financial portfolio. So, the very first step to take towards financial freedom should be an overview of your finances.
Assessing Your Finances
Take a serious look at your financial situation. Acquire all of your financial documents, and get everything organized. It’s easy for people to assume that they are well conscious of their complete earnings, spending habits, and payments due, but the picture is always clearer when the figures are all laid out right before them. And being organized can also help to expose information such as, any negative spending patterns, or perhaps hidden fees that may have gone unnoticed.
Set Some Goals
Now that you’ve assessed exactly where you stand financially, it’s time to set some goals. It’s all up to you, what you want to be doing in 10 years, what you want for your family etc. Whatever your goals, think of the clear short-term steps to meet them. It’s a process, of course. But be determined to set your course and stay the course.
Stop Overspending
You realize now that you’ve got to take financial matters more seriously. Frivolous spending can’t continue, and if it means a change in your lifestyle, well you can adjust. The pay off will come later, and the pay off will be great. The key is in keeping your eyes on the prize, and sure it can be challenging, but do without the extravagances, knowing that every time you do, is another day of financial freedom in the future ahead. You will have peace of mind with your future of financial freedom unlike anything extravagances for a day can bring you now. So, simply stop overspending, and stick strictly to necessities.
Bargain Shop
When you’re used to overspending, and frivolous shopping, bargain buys and outlet stores can seem completely foreign and a bit frightening. But you should have no shame in joining the masses of others who are taking advantage of buying much of what they need for cheaper prices, and therefore saving money in their pockets. If you’ve never been to stores like Aldi, Sam’s Club, Costco, salvage grocery stores, and even thrift shops, look them up on line for locations, and see what their all about. But the one thing you can be sure of, they’ll save you money. And the more money you save, the closer you will be to financial freedom.
Lower Monthly Housing Costs
Do whatever you can to lower your monthly housing costs. With some inquiries, there are usually a few things that can be done to reduce your monthly housing expenses. The most likely place to start would be with your phone and cable/internet connections. Consider basic cable or no cable at all, or maybe a satellite dish plan would be more affordable. Sometimes simply calling your provider and inquiring of lower rates will help to come up with a more affordable solution.
You can also try reducing your water heating costs. Basically, you’ll want to use less hot water, and turn down the thermostat on your water heater. It can also help a great deal to insulate your water heater.
Be more aware of conserving electricity. Use energy efficient lighting, and unplug electronics when not in use.
Approach Your Debt
Hopefully, you don’t have much debt, or none at all. But even if you have a mountain of debt, it’s important that you determine to pay it off. If you determine to pay off the debt, then even a mountain of debt is not as bad as it may seem. But as long as you are in debt, you can never have that true life of financial freedom you desire. So, don’t let yourself get deterred from your course here. Other Americans have been through this, and have gotten through this, and you can too. The best approach is to pay off the small debts first. And once the smaller ones are paid off, move ahead to the larger ones. You’ll be proud of yourself every step of the way.
Pay Your Bills on Time
Now is not the time to get behind in your bills, and from this point on, you need to always pay your bills on time. If for any reason something should come up, and you don’t think you can pay you bill on time, be sure to get in touch with a live person applicable to the relevant company, and well in advance to the actual due date of your bill if possible, explain your situation, and carefully go over your options. Follow up the phone conversation with a letter to the company stating the name of representatives you spoke with, what was discussed, and what your plan of action will be. This does not ensure your good standing with the company, and you should accomplish whatever you can to get partial payment or full payment to the company as soon as possible, regardless of what was discussed during your phone conversation with company representatives.
Working and Job Security
Your job is your main source of income. With the economy the way it has been, hopefully you have a secure position at your company. But don’t be so quick to take your current employment for granted. At least consider what you would do if the worst happened and you couldn’t keep your current job. What kind of skills do you have? How easily will they carry you over into another working position?
Take full advantage of every opportunity you have where you are working at now. Learn all you can, and gain as much experience as you can. Make yourself an asset to your working team. And if you’re holding down a job that you don’t feel is very secure, do what you can now to prepare for another job. But don’t let yourself fall into the predicament of having no income coming in, and therefore shifting yourself into survival mode. It will only put a dent in your plans, and set you back to step one of your goal to financial freedom.
Build and Diversify Your Income
Your income has carried you this far, and the money you’ve been able to save has given you great hope for a prosperous future, but that simply should not be enough for you to be satisfied with your current income. By now, your mind should have matured, and your financial prospects should have taken on a passion all their own. Those Friday nights and weekends off of work should be geared more toward a time of doing something more productive.
At this point, it would be a good idea to look for an additional source of income. Again, think of the skills you possess, but this time, less job-related, and more hobby-related. Many people turn fun-loving hobbies into very lucrative careers, and it often starts with situations such as this, when the job security exists, but one is looking to get ahead, and find financial freedom by doing what they love. Maybe you love to be outdoors and you’re good at lawn care, or you love cars and you’re good at working on them. Or maybe you love to write, do internet blogging, bake or design. The point is, find a way to be productive during your spare time. With the internet these days, opportunities are endless, and there’s all kinds of ways to be creative at making money.
Make Your Money Work For You
As you become successful in your endeavor, your cash and savings will accumulate. This is the time to start pulling some funds together and begin investing. Proper investing can provide passive income from secure sources, making regular work no longer necessary. This is exiting, I know, and this is truly, financial freedom.
Like many people, you may have no experience in investing, and trading stocks on your own. You need to begin the process of learning about investing. It will be a skill important to your goal of financial freedom. And it doesn’t hurt to begin the process of learning long before you have the money to invest. Study materials on investing, follow some financial experts, and practice the stock market as though you had invested live money.
Most inexperienced investors, or those looking to invest for the first time, immediately look to high priced mutual funds or advisers who will usually take a high percentage of your money for not so great returns. But if you’ve spent some time learning about investing beforehand, you should have an advantage, and more options and choices desirable, and befitting to you as a new investor. So, don’t drag your feet about gaining new knowledge in the field of investing. You will soon have the cash flow to yield toward applicable investment practices.