There are few better goals in life than being financially free. For many, though, it feels like a dream that’s completely out of reach. With a little planning and a lot of effort, though, most people can take control of their finances. If you are willing to put in the work and follow all of the steps below, you can take charge of your family’s financial future and start to build a better life.
Have Everyone Buy In
You can only be financially free if your entire family works towards the same goal. As much as you’d like to eliminate debt, things won’t work if your spouse keeps spending. Likewise, you won’t be able to happily make changes in your life if your children are suffering. Before you make any changes to your lifestyle, make sure that you have a frank discussion with everyone about what the future will look like. You may have to alter your plans depending on the results of this meeting, but it’s worth it for your peace of mind. This is a plan on which you whole family must agree.
Create a Budget
If you really want to be financially free, you have to know how much money you have coming in and how much money is going out. Once you have your budget down on paper, you might be surprised to that there are certain areas of waste that you can eliminate. More than anything else, a good budget helps to make your spending real. If you can embrace a budget, you can start planning your financial independence immediately.
Getting rid of debt is a key part of becoming financially independent. While there are some kinds of debt that are hard to eliminate, making a plan to minimize your debt is a great idea. First and foremost, this frees up more money for you to invest and on which you can live. Perhaps even more important, though, it helps to improve your credit score. This will help you qualify for lower interest rates when you do have to take out loans and give you the ability to take part in more financial transactions. Start small, but start strong when it comes to debt elimination.
Embrace a Second Income Stream
One of the best ways to become truly financially independent is to have multiple income streams. It doesn’t matter if you are renting out houses or working as a lipsense distributor – you need an income that doesn’t come from your normal job. In time, you’ll want to make sure that your secondary income streams are largely self-sustaining and turnkey. The less work you have to do for these alternative streams, the better. Make sure that you can use this income to pay off debts and build up your portfolio – this is the money that will help you to secure your future.
Have a Long-Term Plan
Wealth for the sake of wealth is not much of a motivator. If you really want to be financially free, you need a long-term game plan. What is it that you really want to do? If you want to retire by a certain date, you’ll need to gear your plans around that time frame. If you’re just looking to eliminate a certain cost, though, you might have more wiggle room in your plans. Know exactly what you want to do and how you’ll get there – the rest of the process will be directed by those desires.
It’s entirely possible for you and your family to become financially independent. It won’t happen overnight and it won’t happen without sacrifice, but it will happen. Make sure you look at financial independence as a goal for your entire family and that you’ve all bought into the concept. Once you are all willing to work together, you should all be able to contribute to a better future.
Author: Damien Justus