How to Achieve Financial Freedom Series

Do you dream of having the money to live comfortably, take a dream vacation, buy a home, pay for your children’s education, and travel, or maintain your lifestyle during retirement?   You don’t need to win the lottery to get there.  You just need to be disciplined with the money you earn, the money you spend, and the money you save.    You need a plan!  As Benjamin Franklin once said “Failing to plan is planning to fail”.  I have name February to be Financial Freedom month!

Don’t be like the masses who sit in debt, and complain about the bills that they can’t pay or that they don’t make enough money.  Set your plan in motion so that you can look forward to the future and create the financial freedom to live the life that you want.

For many, financial freedom may seem like a dream, but by sticking to a budget or spending plan, it is possible to get there!  You can eliminate debt, save for a rainy day, and alleviate the stress that you may feel every month when the time comes around to pay your bills.    Follow a few simple rules, and anyone can achieve financial freedom! Over the next few weeks, I’ll be reviewing some simple ways to get started on your path to financial freedom.

But the first step in your plan needs to be spending money on purpose.  If you don’t know where you’re spending your money, then you are not spending money on purpose.   To achieve financial freedom, you MUST spend money on purpose.

Create a budget

Create an intentional spending plan and stick with it.   A budget or spending plan is necessary in order to meet your short and long term financial goals, no matter what those are.

If you find the thought of this overwhelming, you’re not alone.  But it is imperative you go through the exercise and once it’s done just stick to it!

1.  List all your fixed expenses.  These are things like debt payments, groceries, utilities, mortgage / rent.
2. List all of your irregular expenses.  These are expenses due throughout the year, including taxes, car maintenance, vacations, but that can vary.
3. List all your discretionary spending.  This is all your other expenses and includes shopping, morning coffee, etc.
4. Categorize or rate your expenses.  Use A,B,C or 1,2,3 whatever method works for you.  A’s being needs, B’s being needs you could be more efficient with (utilities, groceries, etc.), C’s are your wants / desires but not necessary.
5. Total all your expenses for the year and compare them to your net income for the year.  Remember NET income is the amount you take home or put in your pocket.  If your expenses total more than your income, then it’s time to reassess your spending habits and make cuts from your B’s & C’s.

Understanding where your money is going is the first step in getting a handle on your financial situation.  Work on getting this information together for yourself, and we’ll see you next week to discuss Part 2 in your journey.