The 7 Quickest & Easiest Steps To Start Breaking Free Financially
Goals around money should be an essential part of your yearly plans. Whether it is wanting to increase your income, save more, reduce debt, start investing or more, the key is to get on top of what you have now and plan your money strategy. Money is just a transfer of energy and allows us to transfer our energy for products and services we can utilise.
Here are 7 ways you can start to break free financially in 2016:
- Create goals
You can’t improve your financial situation without first knowing where you want to get to. Set yourself financial goals and make sure they are specific and can be measured. Eg By December 31st, 2016 I will have paid off my credit card. Put a date, $ figure or something you can use to track and recognise when you have achieved your goal. It will also keep you on track if you know exactly what your target is. Start with a yearly goal and then break it down into months to use as check in points along the way and keep you on track.
- Analyse your current situation
Once you know where you want to head, you then need to analyse where you are financially at the moment. What are you currently spending your money on? What is your current income? What are your current commitments? Analyse how much you are making versus what you are spending. If you have no idea what you are spending, start writing down what your frequent bills cost, eg utilities, phone, food grocery bill. For incidentals and to spot where that extra money is going, start tracking your daily spending over 2-4 weeks to get an idea where your money is going. For example you might discover you are spending $50 a week on buying your lunch. This will help you identify areas where you can cut back and save money.
- Create a Budget & track
Once you have your current spend and income in hand. Put it into a basic budget. If you have computer programs like Microsoft Excel, these often come with basic templates for budgets. Use one of these to follow or create your own. You want to look at this at least once per week so it is best to have a budget that is in a weekly format. By reviewing it weekly you can see what your budget is for the week then at the end of the week enter actual expenditure and income to see where you fair against your budget.
- Pay yourself first
This is often a hard thing for people get their head around. Paying yourself first is essential as you are the most important person in your life. Majority of people pay their bills first and pay themselves last. When your income comes in set aside a regular amount or % to pay yourself. Your pay is for things you want to do, this money is not for bills, it is for whatever you want, clothes, movies, holidays etc. Start out small, you don’t want to over extend yourself and be stressing about money. Even if it is 10%, $10 etc whatever is going to work for you.
- Set up a savings system
Saving can be hard at times, but it is a lot easier when you have a system and create a dedicated savings fund. Set up a separate bank account dedicated to savings. Your savings will act as buffer and a way to build your mental strength around money. You want to aim towards building up a year’s worth of expenses in your savings. Start small aim for a month, then 2, then 3 etc. Your savings are not to be spent. In the very worst situation, if all hell broke loose and you lost your jobs and all your income and other money this is there to cover you. It is not to be dipped into when you need some extra cash.
So I hear you saying, “Well what if I can’t afford to pay my bill?”. All bill providers are reasonable if you contact them. Get good at negotiating, ring them up and let them know you need a little extra time and most companies are happy to oblige. Don’t be afraid to speak to them, they have policies in place to deal with situations like this.
- Educate and lose the emotion
Money can be a major source of stress and frustration for many people. That is why it is important to learn to control your emotions especially around money. Start reading books, attending seminars or doing courses that focus on personal development and improving your mindset. Options that help your mindset and your ability to control your emotions as a whole will benefit you most as they will not only help you when it comes to money but also all areas of your life.
- Shop around
Get the best price you can. Shop around for the best deals, especially on things like utilities, insurance, phone plans etc. Check out options and you could find yourself saving hundreds to thousands of dollars. Money that is better off in your pocket!
Start implementing these tips to improve your money situation in 2016. Implementation is the key to getting results.
Pssss… Something extra for you – 10 wealth principles of the super rich – this has not been released before and guess what were not going to ask for your email this time 🙂 But please let me know what you have learn’t.