Nearly all of us have faced some type of financial struggles in our lives. Some of us may be students, struggling to get through school while on a budget. Or single parents who are trying to pay the bills and keep your kids in clothes. Even young professionals just out of college, trying to repay school loan debt face financial difficulties while trying to start their careers. It’s a fact that nearly all of us can improve some part of our finances.
Maybe your goal is to put more money in the bank each month. Possibly you have some high, outstanding debts you want to pay down. Or maybe you just want to earn a little bit more money each month. It’s not difficult to make significant changes to your financial well-being, but you do have to make a plan and stick with it.
4 Steps to Financial Freedom
Find the problem.
The first thing you need to do is realize there is a problem with how you’re managing and spending your money. If you are struggling to make payments on credit cards and other debt, it may be time to recognize that you cannot live your current lifestyle and get your debt paid off simultaneously. This will require making tough choices in what you spend your money on each month, which will allow you to make larger payments toward your debt and get your closer to financial freedom.
How did you get there.
Are you in debt because you spend more than you make on a monthly basis? Or do you spend compulsively? Quite possibly you have significant debt because you have loaned a friend or family member money, and it has not been repaid yet. Figure out where your weakness is and learn from these mistakes. Once you know how you got into your current financial situation you can then avoid repeating those mistakes in the future.
Put together a plan.
This is where the commitment happens. Now that you have recognized that you have a problem, and the steps that got you there, you can make a plan to get yourself back on track. Set a personal budget as well as a target date for your plan. Figure out how much money you can put aside each month and find places where you can cut your spending if necessary. Eliminate dinner out once a week, or skip that expensive drive thru morning coffee. You’ll be surprised how $5 here and $10 there add up. At the end of the month you have more money to help get your financial status back on track by eliminating the debt you’ve accrued.
Visit your plan often.
Take the time to write your plan down, and visit it regularly. This will help keep you motivated toward financial freedom and you’ll be less likely to stray back into your old habits. Make small goals and achieve them. These will be part of your larger goal of eliminating your debt and being on the road to financial freedom once again.