The First Steps to Financial Freedom

Financial freedom has become a catch-all term for anything from becoming a millionaire to being able to balance your budget with ease every month. Being financially free means that you can make the decisions about your finances without a great deal of stress. Freedom also means that the stress around your finances is removed.

 

Is it a buzz term? Absolutely, but that doesn’t make it any less desirable or achievable. Here are some of the first steps that you can take to find your own financial freedom.

 

What does financial freedom mean to you?

Financial freedom means something different to everyone, so what does it mean to you? Is it having savings instead of debt? Or maybe you just want to have some left over money at the end of the month. A lot of people think that financial freedom has to be about being filthy rich, but it doesn’t have to be. Work out what your goals are as the starting point for your journey.

 

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Learn about your own finances

What do you know about your own finances? A lot of people don ‘t like to look at them and have no idea what they have or what is available to them. Take the plunge and discover all that you can about your money, educate yourself about the world of banking.

 

We aren’t saying you should go and get a Masters in Finance (although you can if you want to). It just helps to know the difference between Multifamily Loans and what an annuity plan is. One of the best things you can do is look at your current budget and see if it is working. And if you don’t have a budget, it’s time to make one.

 

Managing savings and debt

Having savings and debt can be a tricky thing to balance in your mind. Yes, you might have savings, but how much is your credit card costing you in interest? If possible, start paying off your debt with your savings.

 

Let’s face, nobody wants to pay their credit card company more than they have to. Of course, you can keep some savings for a rainy day, and keep your credit card open with a zero balance (also for rainy days). Some debt can’t be paid off quickly, such as a mortgage, but long term debt like this is seen as a good debt to have.

 

Learn to negotiate

It doesn’t matter if it is your savings, your loans, your mortgage; if it has to do with your money, negotiate.

 

Many people decide to accept the current rates that they have, even if they are terrible! Don’t be afraid to shop around and come back to your financial institution with offers from other companies. Most of the time, they will not want to lose your business and may match the rate, or get as close as they can to it.

 

In those cases when they won’t meet you in the middle, it might be time to pack up and walk away for a better deal.

 

Consult with a financial advisor on these issues- good luck!

 

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Ken Boyd

Author: Cost Accounting for Dummies, Accounting All-In-One for Dummies, The CPA Exam for Dummies and 1,001 Accounting Questions for Dummies

(email) ken@stltest.net

(website and blog) https://www.accountingaccidentally.com/