10 Steps To Financial Freedom - How To Be Good With Money

if you could design your life and plan everything in it what would it look like some people would love to travel all over the world some people would love to own and live in their dream houses and others may want to be able to pursue their dreams or maybe even have that dream wedding they've always wanted and so much more the list is endless while they do say money won't bring you happiness it sure does play a big role almost everything you choose to do requires you to part with some box I'm not trying to say money is everything but it really is important and like Kanye West puts it money isn't everything but not having it is but we're not here to give you a second hand advice from rappers today we share with you 10 steps you can take to achieve complete financial freedom imagine a life where you don't have to worry about money the decisions you make won't be based on what you have in the bank account you won't take that job you don't like because it pays off better you won't have to check the price tags on organic foods just to confirm you can afford them you can opt to take uber black whenever you wish - sounds like a wonderful life right well it's quite possible to get there but you have to understand you won't reach there overnight just like everything else in order to see results you will need to put in the effort be really disciplined and follow the steps we're about to share take some notes this just might change your life before we start hit that subscribe button in the Bell notification now let's begin number one set life goals the very first step is to create a list of life goals don't just 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 attach 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 a million dollar home within six months well unless you win the lottery and with the one out of a hundred thousand 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 number two create a budget it's important to know exactly what you consume everyday 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 number three emergency fund start by creating an emergency fund the ultimate rule of an emergency fund is saving up six months in recurrent expenses and stashing it somewhere just in case anything out of the ordinary happens by out of the ordinary we don't mean vacations that fancy watch you've always wanted or any miscellaneous purchase that money should only be used for actual needs which would otherwise deter or slow down your life these include emergencies 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 save funds this is the first step anyone who wants to achieve financial freedom should take number four plan to pay off debt about 80% 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 debt is the fact that people overuse it 65 percent of Americans have maxed out their credit cards at one point in their lives there are two rules that 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 on a window while debt may be good in some cases it can dent your account tremendously when you're paying off a couple of hundreds of dollars a month for car loans student loans and 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 debt and stick by it you'll end up saving thousands of dollars in interest if you manage to pay it faster than the repayment time these 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 loan 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 loans first which will then give you the momentum and Psyche to tackle the others number five retirement fund to attain financial freedom you have to make short-term sacrifices for the long-term game one of the greatest sacrifices is having a retirement fund having a 401k is one of those things you know you really need but haven't paid that much attention to and if you already have one you aren't contributing the maximum you can having this fund is crucial for security in the future by 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 number 6 start investing today this is the only way your money can multiply once you've created a structure of managing your income and 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 or think you're the next Warren Buffett 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 number seven 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 outlined 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 to your money you received your paycheck but right after a couple of days your account is empty and you're 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 number eight 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 number 9 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 number 10 maintenance take good care of everything you want this includes your car home lawn mowers and even clothes 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 red - multiple ailments can cause your insurance cost to skyrocket also avoid habits that would put your health at 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 thanks don't expose yourself to health dangers as the price will be a hefty drawback in your journey to financial freedom while 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'd give you ten steps but it doesn't hurt to learn one more right number eleven hire a financial advisor once you've 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 that 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 is to get an expert to educate you and help you through the decision making process not just any expert choose one with experience and 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 which are 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 we wish you all the best as you take on this journey leave a like if you enjoyed this video and save this video for future reference so in summary one set life goals to create a budget 3 set up an emergency fund or plan to pay off debt 5 set up a retirement fund 6 start investing 7 create automated saving 8 watch your credit score 9 never stop learning 10 take good care of everything you own and finally 11 hire a financial advisor thank you so much for watching like share and subscribe for more transformative content