5 Steps to a More Secure Financial Future
From the very beginning, the FreedomGround team has been serious about helping Americans to achieve a more secure financial future. Sure, winning a big sweepstakes or contest is great, but actually taking control of your life and your money is the true secret to freedom. Here are our five steps to a more financial future:
I Am Saving For…
The renown book, The 7 Habits of Highly Effective People reminds us to, “begin with the end in mind.” For you, your savings goal may be to reach early retirement but for someone else it may be to further the education of you or your child. Set a specific goal and then add in some short-term goals as well as an incentive. Some ideas for short term goals are becoming debt free or buying a new car or home. Writing down your goals makes them more likely to happen.
Be Specific About Your Goals
Once you get through the daydreaming phase and decide on your goals, it is time to be more concrete. Be specific about your goal and structure it in a way that it can be measurable, achievable and realistic. Consistently tracking and measuring your goals will keep them real and keep you focused. For each goal, estimate what the cost will be and use this savings goal calculator to see how much you need to save each month to reach your goal in a stated time period.
Reduce Your Expenses
Unless you have side hustles in place to earn additional income, you will have to reduce your expenses to fund your goals. Look closely at your bank and credit card statements to really understand where you are spending your money. Programs like Mint can help you track your spending for free. Reduce spending on anything unnecessary or wasteful. Some examples would be subscription boxes or software subscriptions, a gym membership you don’t use a subscription to a newspaper or magazine you don’t read or can access online. Finally, reduce your hard bills by using coupons or shopping around or online.
Build a Budget
Instead of looking at a budget as a way to deprive you of what you want, change your mindset to ensure your spending reflects your financial goals. Budgeting allows us to control our money and stop giving into marketing campaigns that bombard us from everywhere. Weigh each of your expenses against your savings goals and make conscious decisions to set priorities.
Increase Your Savings Over Time
If the amount that you are able to save now will not get you to your goals, start with what you can afford now and increase your savings rate over time. This is a powerful way to grow your wealth over time. If you doubt this method, I urge you to read The Automatic Millionaire, that details several stories of ordinary people who became millionaires with this strategy.
Now that you have reduced your expenses, increased your income and put a savings plan into place, stick to your spending targets. Track all income and expenses and commit to monitor your spending. The key is that when the money is gone, it’s gone until your next income cycle.
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