12 Steps To Control Your Expenses For Your Financial Freedom
One element of Financial Freedom that gets talked about less is expenses.
While cutting expenses to the bone won't get you to freedom, not controlling them can prevent you.
Optimising your expenses is smarter than minimising.
Let's discuss....
While cutting expenses to the bone won't get you to freedom, not controlling them can prevent you.
Optimising your expenses is smarter than minimising.
Let's discuss....
1. Identify your aims
Write down how much money you need to get to.
Identify what your lifestyle will look like and how much money you'll need each year to fund it.
The more specific your goals, the higher the likelihood of achieving them.
Write down how much money you need to get to.
Identify what your lifestyle will look like and how much money you'll need each year to fund it.
The more specific your goals, the higher the likelihood of achieving them.
Write it all down and put the target sheet at the very beginning of your financial planner.
Beginning with the end in mind is key so you know what markers you need to hit along the journey
Beginning with the end in mind is key so you know what markers you need to hit along the journey
2. Plan a Budget
Making a monthly household budget is the best way to guarantee that all bills are paid and savings are on schedule.
It’s trains you to follow a regular routine that keeps you away from impulse buys that catch pull many away from the financial freedom trail.
Making a monthly household budget is the best way to guarantee that all bills are paid and savings are on schedule.
It’s trains you to follow a regular routine that keeps you away from impulse buys that catch pull many away from the financial freedom trail.
3. Do not have credit card debt
Credit cards and other high-interest consumer loans are brutal to wealth building.
Make sure you pay off the balance each month.
Credit cards and other high-interest consumer loans are brutal to wealth building.
Make sure you pay off the balance each month.
Credit cards are useful for paying for things but disastrous for borrowing.
Student loans, mortgages, and similar loans typically have much lower interest rates so paying them off is not as urgent.
Student loans, mortgages, and similar loans typically have much lower interest rates so paying them off is not as urgent.
4. Set up automated savings and investments
Pay yourself first.
Have an automatic process for sending your income towards savings and investment accounts.
Enroll in your employer’s retirement plan and make full use of any matching contribution benefit.
Pay yourself first.
Have an automatic process for sending your income towards savings and investment accounts.
Enroll in your employer’s retirement plan and make full use of any matching contribution benefit.
Have an emergency fund but do not have more than 12 months expenses in it.
Ideally, the money should sent same day you receive your paycheck.
It never touches your hands, avoiding temptation entirely.
You only have so much willpower that you can use each day so don't waste it.
Ideally, the money should sent same day you receive your paycheck.
It never touches your hands, avoiding temptation entirely.
You only have so much willpower that you can use each day so don't waste it.
5. Don't try keep up with the Jones's
People tend to try to compete with their neighbours, family, peers.
It's not a good idea.
You will have no idea what someone you are trying to keep up with is actually worth.
People tend to try to compete with their neighbours, family, peers.
It's not a good idea.
You will have no idea what someone you are trying to keep up with is actually worth.
They could be in a huge amount of debt struggling to sleep each night.
Focus on your own journey.
Forget about the rest.
Focus on your own journey.
Forget about the rest.
6. Keep a good credit score
My grandaunt used to say "a borrower nor lender be"
But for some items that are necessities you do have to borrow.
Your credit score determines what interest rate you are offered when
financing your family home.
My grandaunt used to say "a borrower nor lender be"
But for some items that are necessities you do have to borrow.
Your credit score determines what interest rate you are offered when
financing your family home.
It also impacts seemingly unrelated things, such as car insurance and life insurance premiums.
This is why it’s important to get a credit report at regular intervals.
Make sure that there are no erroneous black marks ruining your good name.
This is why it’s important to get a credit report at regular intervals.
Make sure that there are no erroneous black marks ruining your good name.
7. Negotiate
This is an underrated art.
Many are slow to negotiate for goods and services, worrying that it makes them seem pushy or cheap.
Overcome this barrier and you could save thousands each year.
This is an underrated art.
Many are slow to negotiate for goods and services, worrying that it makes them seem pushy or cheap.
Overcome this barrier and you could save thousands each year.
Buying things ahead of when you actually need them and in bulk is a good approach.
Small businesses, in particular, tend to be open to negotiation, where buying in bulk or repeat business can open the door to good discounts.
Small businesses, in particular, tend to be open to negotiation, where buying in bulk or repeat business can open the door to good discounts.
8. Constant Learning
Read some of the great invest bookings that are out there.
There's so much free content on the internet and YouTube to get you started
Knowledge is the best defence against getting scared by bad investment news that can scare investors out of the market.
Read some of the great invest bookings that are out there.
There's so much free content on the internet and YouTube to get you started
Knowledge is the best defence against getting scared by bad investment news that can scare investors out of the market.
9. Live below your means
Master a frugal lifestyle by having a mindset of living life to the fullest with less.
Many wealthy individuals developed a habit of living below their means before rising to affluence.
Master a frugal lifestyle by having a mindset of living life to the fullest with less.
Many wealthy individuals developed a habit of living below their means before rising to affluence.
You don't need to sell everything and go live in a cabin up in the woods just quite yet though.
Making small adjustments by distinguishing between the things you need and the things you want is a financially helpful habit to put into practice.
Making small adjustments by distinguishing between the things you need and the things you want is a financially helpful habit to put into practice.
10. Get a Financial Advisor
Once you’ve built a decent amount of wealth.
Be it stocks(liquid) or real estate that aren’t as readily available to convert to cash(illiquid).
Hire a financial advisor to educate you and help make decisions.
Once you’ve built a decent amount of wealth.
Be it stocks(liquid) or real estate that aren’t as readily available to convert to cash(illiquid).
Hire a financial advisor to educate you and help make decisions.
Get comfortable with the idea of paying someone.
Adopt a business mindset when doing this, think of it as paying someone to allow you focus your mind on thigs you are better at.
Adopt a business mindset when doing this, think of it as paying someone to allow you focus your mind on thigs you are better at.
12. Keep healthy
Maintaining your body in good health will save you time and money in the long run.
Alongside a happier life in general.
Maintaining your body in good health will save you time and money in the long run.
Alongside a happier life in general.
Invest in good health with regular visits to doctors and dentists, and follow health advice about any problems you encounter.
Most issues can be helped—or even prevented—with lifestyle changes such as more exercise and a healthier diet.
Most issues can be helped—or even prevented—with lifestyle changes such as more exercise and a healthier diet.
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