cent life skills the very first step is to create a list of life goals don't you scribble down a couple of things you want to achieve but take some time to really soul search and identify what you really want out of life once done with the list attached timelines to them and if possible a cost be very specific accurate and realistic when doing this it's okay to be overly ambitious but we both know it's not possible to buy $1000000 home within 6 months well unless you win the lottery and with the one out of a. 0 chance this is almost impossible stick to what's possible and achievable we recommend putting this list somewhere where you'll see it every day like on your fridge for instance.
create a budget it's important to know exactly what you consume every day and how much it costs this is the only way to truly understand where your money goes writing a household budget and sticking to it relentlessly will end up saving you a lot of money it's a great routine that reinforces your goals and bolsters the temptation to splurge on unnecessary things trust me.
emergency fund start by creating an emergency fund the ultimate rule of an emergency fund is saving up 6 months in recurring expenses and stashing it somewhere just in case anything out of the ordinary happens my out of the ordinary we don't mean vacations that fancy want you've always wanted or any miscellaneous purchase that money should only be used for actual needs which would otherwise the terror or slow down your life these include emergency such as your car breaking down water heater system failing or unexpected hospital bills only the most important needs why create an emergency fund everything that can go wrong will at some point go wrong Murphy's law so instead of borrowing money or using your credit card which will make you get further into debt use your same funds this is the first step anyone who wants to achieve financial freedom should tech
plan to pay off debt about 80 percent of Americans are in debt and this number is steadily increasing at an alarming rate debt isn't entirely bad in fact it has its benefits for one you can build up a good credit score by borrowing money and returning it in time what's wrong with that is the fact that people over use it 65 percent of Americans have maxed out their credit cards at 1.in their lives there are 2 rules which should be abided by when it comes to debt only borrow money for purchases that will appreciate for example a house a piece of land and any other asset that fits into that criteria the other rule is to only borrow money when you have a plan to pay it back as businesses do in short what we're trying to say is don't use your credit card to purchase that Birkin bag you've just seen a window. One dead maybe good in some cases it can get your account tremendously when you're paying off a couple of hundreds of dollars a month for car loans student loans any other loans this restricts your ability to save money or even invest therefore it's imperative to create a plan to clear off your debts and stick by it you'll end up saving thousands of dollars in interest if you manage to pay faster than the repayment time the savings can be added up to your account or used in some investment with great returns essentially creating more financial freedom so what's the best way to pay off loans faster there are a couple ways to do this you can start by categorizing each line based on the interest rate and pay off those with the highest first there's also the snowball method which takes into account human behavior this requires you to pay off the smaller ones first which will then give you the momentum and psyche to tackle the others.
retirement fund to attain financial freedom you have to make short term sacrifices for the long term gains 1 of the greatest sacrifice is having a retirement fund having a 401 K. is 1 of those things you know you really need but haven't paid that much attention to and if you already have 1 you are contributing the maximum you can having this fund is crucial for security in the future my saving a little each month you're guaranteeing yourself a dignified retirement and who wouldn't want that also if you manage to store up enough you can achieve early retirement comfortably stop wasting time and take the steps today.
start investing today this is the only way your money can multiply once you've created a structure of managing your income in the above steps go ahead and create an investing plan compound interest will grow your money exponentially over time however please note that you will need to be patient as results will only be seen over long periods of time so where do you start don't try to be a stock picker thank you the next morning buffet instead open an online brokerage account which allows one to learn how to invest and create a portfolio after doing your research you can create weekly or monthly deposits to this account.
create automated savings one of the wisest things you could ever do for your finances is to set up automated withdrawals once you have an outline budget loan payment structure savings model retirement fund monthly contributions then you can activate automated deductions monthly the money should be pulled out the same day your paycheck comes in so you can avoid temptation completely have you ever been in a situation where you just don't know what happened your money you receive your paycheck but right after a couple of days your account is empty and your clueless to where it went then maybe it's about time you created automated deductions talk to your bank and find out how you can connect these automated debt payments today.
watch your credit score the credit score is the determinant of so many things it determines the rate at which you will receive a loan for your car or when refinancing your home and so much more what most people don't take into account is that it determines other seemingly unrelated things such as life insurance premiums and car insurance most institutions reason that someone with a low credit score is likely to be reckless in other aspects in life such as drinking and driving you can potentially lose a lot of money in the long run for having a bad credit score therefore keep an eye on your credit report regularly to ensure there are no black marks that could tarnish your good name.
continuous learning knowledge is the key to becoming financially free regularly review all changes in the tax regulations to ensure all deductions and adjustments are maximized stay up to date with financial news to identify any developments within the stock markets and be quick in adjusting your portfolio accordingly other than being financially literate also take time to improve your knowledge within your career if taking that extra course will increase your chances of getting a better paying job go for it you'll also be in a better place to retain your job when the company is doing retrenchments today there are hundreds of certified online courses that will train you for a small fee while some are completely free.
maintenance take good care of everything you want this includes your car home lawn mowers and even close the longer they last the less you need to repair or replace them you will end up saving hundreds of dollars yearly on unnecessary maintenance costs if it's your car take it out for regular servicing and use your gadgets responsibly this also applies to your body take good care of your health eat well and exercise to avoid time and money wasted in hospitals also your general health also determines your insurance premiums being obese and having a record of multiple ailments can cause your insurance costs to skyrocket also avoid habits that would put your health in jeopardy this includes habits like alcoholism smoking and abuse of any illegal substance some companies have instilled restrictions on the allowed number of sick days anyone who exceeds the limit incurs a notable deduction in their paycheck you have no choice but to take better care of yourself and your things don't expose yourself to health dangers as the price will be have the drawback in your journey to financial freedom well this won't automatically guarantee you'll achieve your financial goals it will help you develop habits that will get you on the right path I know we said we give you steps but it doesn't hurt to learn one more right
hire a financial adviser once you followed all the above steps and practice them for a substantial amount of time you'll have amassed a decent amount of money the money might be there but you don't know what to do with it this can lead to impulse purchases and misuse of funds the could easily take you back to where you started the next step to take when you have chunks of money that you don't know what to do with it to get an expert to educate you and help you through the decision making process not just any expert choose one with experience in a reputable image you don't want to create new problems that didn't exist if you can't find someone you can always choose to educate yourself and handle your money accordingly the internet is your unlimited source of information you can also enroll for short courses in money management what you're. Reasonably priced and extremely informative that's it for today we hope you've learned something it's not hard to achieve financial freedom but with discipline and proper planning nothing is impossible
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