How would it feel to finally achieve financial freedom? Imagine never having a pit in your stomach about how you’re going to pay an unexpected bill again. The next time a pandemic or recession hits, you won’t have to deplete your savings just trying to make ends meet. That’s what financial freedom feels like!
So how do you get there? Here is a concrete plan to financial freedom to follow.
You won’t be able to get ahead if you don’t have a plan for how your money is going to work for you. If you’re wondering each month where your income went, then the first thing you need to do is to make a budget.
Make sure to keep track of every dollar that you spend throughout the month. If you have trouble with overspending or underspending in certain categories, make some adjustments.
You may have made some mistakes in the past. However, if you still have credit card, student loan or auto loan debt, get rid of it. Work on paying off your mortgage and any other debts that are holding you back. Those payments only make it harder for you to save and invest your money.
Once you’re debt-free make sure that you stay there!
Your career is one of the biggest tools at your disposal to build wealth so when it comes to your career choose one that offers income-potential, work that you love, and the potential for growth. The benefits of the career should also support your goals of financial freedom.
If you’re always relying on advances and loans when unexpected bills pop up that means that you need short-term savings. Plan to have money in the event of car repairs, home repairs, and for medical deductibles if you get injured or sick. Establish an emergency fund that can cover you for three to six months of expenses after you’ve gotten out of debt.
Investing now rather than later allows you to benefit from the power of compound interest. Some things that you should save for include retirement savings and college savings if you have children.
Once you’ve started contributing to those funds, you can look into taxable investments while you max out all of the tax-favored accounts you have access to such as your employee 401(k) and IRAs.