How much of your income is going straight to credit cards, loans, and other wasteful spending? Have you ever taken the time to create for yourself a personal or family "operating" budget? Do you know how much money you and your family need just to get by? What percentage of your take-home pay goes to savings and what percentage goes to needless waste? How long do you have before you will retire and when would you actually like to retire? How much money do you have and how much will you need to live on after retirement? If you lost your job today (which is a sad reality for record numbers of Americans today) how many months would you be able to remain unemployed before you have to make very tough decisions about your home, cars, and other necessities? Will you be able to send your kids to college or will they need to get huge loans that they will have to pay back for the rest of their working, adult lives?
These are the tough questions that many of us face, but that so many of us don't have answers to or even know where to begin to look for those answers. In this blog, I am going to give you some very easy instructions on ways you can begin to answer these questions and achieve financial freedom. Notice that I didn't say to "get out of debt" or any other negative statements. Instead, I focused on the positive outcome of new strategies, "To Achieve Financial Freedom". Doesn't just saying that feel good? Imagine everything that this statement means to you. What is financial freedom to you? For me (as I've eluded to in previous posts), it's vacations to Vegas, relaxing on a beach, sending my kids to Notre Dame, having the house of my wife's dreams, and more. For all of us, it is something that makes us smile or something that makes us sad if we don't know how to get there. So, by all means, let's all get there. So, consider my advice below on getting yourself to your state of financial freedom.
1. Create a personal / family operating budget. All you need to know is how much money you bring home and how much money you spend. Break you spending down into the separate categories: Mortgage, utilities, car loan, insurance, gas, credit cards, groceries, etc. I recommend doing this in Microsoft Excel so you can save it on your computer and never lose it.
2. If you're like most people and you have a lot of credit card debt (or even just a little), get a poster board and create a "Payoff Schedule for Financial Freedom". Set a goal for the date that you want to be completely debt free. Divide your poster board into the number of months that it will take and list all of your credit cards, their current balances, and the minimum payments due monthly on each card. Each time that you make a payment, write it on the board. Each time you pay off a credit card completely, reward yourself reasonably. Set goals, achieve goals, and reward this achievement. Hang this poster board in a place where you will see it every day. Where many people fail, is thinking about the problem, setting a goal, and forgetting it soon after because it is out-of-sight and out-of-mind.
3. Cut up the credit cards and close the accounts as soon as the card is paid off. Cutting up the cards will prevent you from using them again. Closing the accounts will improve your credit score. Most people think that it's enough to just pay them off. A banker told me that closing the accounts is even better because it shows banks and other lenders that you don't have other revolving lines of credit that could get you into trouble later.
4. Where are your areas of wasteful spending? Everyone has some. For me, it was premium movie channels such as HBO. The time I spent watching this wasn't worth the money. I've also gotten more productive since cancelling these subscriptions. The book, "The Automatic Millionaire," calls this, "The Latte Factor". (Check out this book in my 5-Star Book Store.) Every dollar of wasteful spending that you can save, should be paid directly to debt.
5. Don't kick yourself too much for past mistakes. Getting down and depressed will only make the situation worse. Stop all of that negative self-talk. Thanks to your new plan, you are no longer that wasteful spender or that person who is deep in debt. Now, you are that intelligent, hard-working person who has a great plan for achieving financial freedom. In that way, you have already achieved a degree of freedom. Doesn't it feel good?
Finally, I want you to never lose focus of your goals and I want you to continuously work on your plan. I want it to be as natural to you as breathing. You need to be thinking about it all the time. Most likely, you didn't get in this situation over night, and it's going to take serious determination for you get out of it, but YOU WILL GET OUT OF IT.
DO YOURSELF A HUGE FAVOR: I want you to get the following books that I have placed in my 5-Star Book Store. I read these books and everyone who wants to get into a better financial position needs to read them to. These particular books, in my book store, are audio books and I did this because the #1 excuse I hear for people not reading and learning is that they don't have time. Well, guess what? You have time every day that you get into your car. Also, instead of watching all of your favorite TV shows, DVR them for later and pop in the Audio CD and take notes. When you have questions about the books, email me and I'll help you out. So, here are the books:
1. The Automatic Millionaire
2. You're Broke Because You Want to Be
3. Live With Passion: Strategies for Creating a Compelling Future
You have to hear these books. I want you to be able to do the things that others will not be able to do. So, do the things that others are unwilling to do. You can do it!
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