You might have already asked yourself this question at least once or twice. Looking at your current financial situation with several debts and no savings, you might think that financial freedom is not for you.
But no matter what your current financial situation is, financial freedom is possible. However, you need to put in work and discipline with your finances. You also need to be patient since this is a long-term process.
So, when and where do you start your journey towards financial freedom? Today is a great time to start. To help you with that, you should be taking the following steps.
1 – Assess your current financial situation
This gives you a closer-to-reality value of your financial standing. To make this assessment, take note of your assets, income, liabilities, and expenses. Know how much you have and compare it to how much you owe. This will help you figure out what adjustments to make.
2 – Create a financial plan.
In creating a financial plan, goal setting is an important phase. Financial freedom is your absolute goal, but this is a vague concept. You should clearly define your goal, such as retiring at 40 with a million dollars in the bank, for instance.
Specifying your financial goals will make it easier for you to identify the methods that you can use in order to fully realize your goal. For instance, you may have to save a few hundred dollars every year to be a millionaire at age 40.
The more specific your goals are, the more specific your methods will be. As a result, you have a clear vision of what you want to happen.
3 – Build your wealth.
Due to interest rates, your savings will grow at a certain percentage, depending on the interest rate set by the financial institution you are going with. Whether such rate is high or low, you can expect earnings from your savings. So, start saving early.
Try investing as well. The higher the risk, the higher your returns will be. However, you should make sure that you will only invest an amount that you can happily go without.
4 – Pay your debts.
Little by little, pay your debts. They also have interest rates, and you will find yourself being buried deeper if you do not pay them off as soon as possible. If you have extra money, use it to pay off loans.
5 – Practice discipline.
You should religiously follow your plan, and it takes discipline. Do not spend money on things that you do not really need. If you have discipline in managing your finances, financial freedom is definitely within your reach.
Jeffrey Fleurinor CPA can help you manage your financial situation. We can assist you in making a financial plan and following it. If you need accounting and tax services in Georgia, please call 404-884-9220.