We’re more than halfway through 2019 and it’s time for a check in with yourself. It’s the perfect time to revisit the goals you set in the beginning of the year. In this blog post, we’re specifically talking about your financial goals. Have you been saving? Have you paid off that credit card? Are you investing? According to Experian’s latestPersonal Finance Survey, only 17% of people said they felt “very secure” about their finances. It’s time to increase that number!
I’ve teamed up with Hansome Kelly, Wealth Navigator and Forex Trader. Together we’ve come up with 7 tips that will help you acquire financial freedom. It may seem like a lot of work to follow through on these tips however you have to ask yourself how serious you are about financial freedom. If you’re persistent and you work hard to make a change, you’ll see a result. If not, you’ll keep digging yourself into a deeper financial hole.
1. Define What Financial Freedom Is For You
In order to acquire financial freedom you have to map out what it looks like for you. Thus, what needs to happen in order for you to be able to make life decisions without being overly stressed about the financial impact because you are prepared? Start by calculating all your monthly expenses including bills, subscriptions, groceries, and other things that you have to pay. Next list out your usual purchases and money you would need to comfortably spend each month. Lastly, determine the amount that you’ll need to make monthly in order to feel financial free. Subtract your financial freedom number from your current monthly income. The result is how much extra you’ll need monthly from your other streams of income in order to live financially free.
2. Create A Budget And Abide By It
I like to budget monthly because it’s easier to digest and manage. Whether you physically write it out or put it in an excel doc, make sure to set a budget. Budgeting is the only way to track your spending so that your expenses don’t exceed your income. You don’t work for 40+ hours a week just to blow it all every month! Also, categorize your expenditures, make a list of all of your monthly expenses with the dates due included, and review your social calendar for the month. Give yourself realistic spending limits for EVERYTHING. After you have your budget together its time to keep yourself on track. Keeping track of every penny you spend helps you control where your money is going.
Every day, write down every single thing you spend money on. Aim to not exceed your budget per category, if you do reallocate your budget to accommodate for the overage. I like to manually track my spending because I believe it is the most accurate. Although, if you’d like to use an app there are plenty out there such as MINT, Empower, Clarity Money etc.Also, include a budget for investments. Set aside some money to invest in whatever suits your interest whether it’s real estate, stocks, cryptocurrency, life insurance, or other investment plans. Utilize apps like Robinhood and set aside some cash for stock purchases. The Fundrise app makes it easy to invest in property deals. Let the money sit and watch it grow over time.
3. Place Your Savings In A High Interest Account
Pay yourself first! Your budget must include a savings amount whether that’s going into stocks, a retirement account, real estate or towards a personal fund, YOU NEED TO SAVE. Regardless of your current bills, student loan payments, or any other type of debt you have to pay off, paying yourself (no matter how small the amount) does wonders for your financial growth. We suggest opening up a high interest savings account. Most banks usually give 0.03% interest on your savings account. That’s virtual nothing. If you don’t know how much interest you’re making on your savings account, it’s time to find out. We recommend opening an online account like Ally online bank. Ally gives you 2% interest on your money.
4. Maintain A Good Credit Score
In school, the student with the best grades usually gets first priority. They’ll get a star with their name on it, they’ll showcase the teachers ability to teach and most importantly, makes the schools stats look good. Think of credit the same way. A high credit score makes you look good on paper, which gives you an advantage over people with bad credit. Building generational wealth requires leverage. The rich utilize their credit for leverage and if the rich people do this, we have a feeling it works. Your credit score shows how reliable you are.
We could write a whole post on credit. But for the purposes of general principles, make sure your credit utilization rate never exceeds 30%, pay off your credit cards before or by your due date, and never miss a payment. To learn more about credit, check out this video.
5. Acquire Multiple Streams of Income
Too many people are living paycheck to paycheck and are hanging by a thread. For some, one missed paycheck could result in homelessness. Luckily, due to apps like Uber, Lyft and Door dash to name a few, we live in a time where it is fairly easy to supplement our 9-5 income. There are so many ways to make extra money. Do a quick Google search and you’ll find many ways to make extra income. If you follow me on Instagram, you know I love to travel. In order to do so as I please and maintain my finances, I did diligent research and found multiple ways to make extra money.
I do so through my blog, Instagram promotions, selling old clothes online and products on Amazon. Hansome does so by being a Forex Trader, conducting Forex training/webinars, and offering credit repair services. Find something you’re passionate about, something you can teach others or a service you can provide and start charging for it in your free time. Use this additional money to pay off debt, save for a dream trip or venture, invest, the possibilities are endless.
6. Create An Emergency Fund
Emergencies happen and you want to be ready for them. Little by little, start to put money away that will cover you for 3-6 months worth of expenses. An emergency like losing a job, a loved one or health related problems can truly set you back. So make it a priority to save for emergencies.
7. Tackle Your Debt, Don’t Avoid It
I used to feel overwhelmed by debt. Balancing student loan debt, car notes, credit card debt etc. can take a toll on a person. This is why it is vital to set up automatic payments that you can afford to contribute towards your debt. Pay off what you owe as fast as you can so all your money can be used for yourself and your net income is positive.
Although, you should always pay yourself first. Don’t use all your income towards your debt, you need money to maintain your lifestyle. Determine a suitable payment plan for yourself, stay consistent and collect that money honey! Also, remember that these are our personal tips and are meant to be used as general advice.
What financial advice do you live by? Please share them below!
