Your Guide to Financial Freedom in 5 mins

Money makes the world go ‘round! That’s the old adage at least. So if money does move our world, it makes sense that it’s so important to organize and manage.

Your own personal finance management journey is unique to you and you alone. The idea of having your money and assets organized and manageable is incredibly comforting to people, but can often seem daunting or even unreachable. 

But don’t worry! We will make these steps easy and manageable for you and your personal goals. By the end of this quick guide, you should be able to plug your own goals and ambitions into the format to have a good overview of where to start. Keep in mind that this is just to get us started, true financial management and success may take a lot of time in certain cases.

  1. Understand your personal financial situation
  2. Set your own financial goals
  3. Set a weekly/monthly budget
  4. Invest in yourself
  5. Remove debt
  6. Accountability

Understand your personal financial situation

Get your personal finances in one place. Combine your debts, your bills, your income, and your investments in one place. One way to do this is to go through your bank statements and use a spreadsheet to record your spending habits. Another method is by using a financial app like Albert. Albert puts all of your spending habits together automatically in one place. It uses Ai to guess what category each purchase falls into and compiles it into an easily digestible format.

It’s important to put everything in one place to get an overall view of what’s going on. This is also a good way to identify issues right off the bat. For example, once you put all of your receipts in place, you may notice that you have spent a lot more money on miscellaneous Target trips last month than any other month.

When doing your own spreadsheet, be prepared to do a lot of math! No matter which method you chose, record your overall totals in a separate place. Put all your expenses at the top and your income at the bottom. If you have many transactions, you may want to go one week at a time!

Weekly/Monthly Bills Total      (-)__________________________________________________

Total debt                                (-)__________________________________________________

+

Weekly/Monthly Income Total ____________________________________________________

Weekly/Monthly Total _______________________

Total Investments                   _____________________________________________________

    Total _______________________

Now that you know where you are with your expenses (hopefully you are making more than you are spending), we can move to step two.

Set your own financial goals

What do you like about your current financial status? What do you dislike about it?

Set your own personal goals about where you want to in the next couple months, in the next year, 5 years, and maybe even 20 years.

Do you want to retire? 

What are your priorities in life?

For example, you may have a goal to retire young, but you prioritize traveling as well. To many people, these two goals don’t seem compatible for the average person. In reality, once you identify your priorities and how you’re going to reach them, anything is achievable!

Identify what you want to do, and set forth to make it happen. Set short-term and long-term goals to keep yourself on track.

Setting a budget

This is the part that most people already know. If you ever took a high school finance class, you know what to do here. Luckily, we already did the first step! Using the data you already compiled from your expenses, create an outline identifying only your essential expenses. Figure out what you need to have at the bare minimum to live your preferred standard of living while keeping your goals in mind.

If your goal is to spend less money on clothes, then make sure your budget reflects that. This part is very tuned to your personal spending habits. Make sure your budget is realistic and reachable. If your goal is to cut your overall spending in half, you may have to set short-term budgets first. A goal like that could be overwhelming and easily demotivate. Keep yourself on track by first reducing each spending category little by little every month until you hit your goal.

Invest in yourself

This is the only rule that does not need to be personalized by each individual. Investing in yourself is the only thing that every single person should do. Now when I say invest in yourself, I mean invest in your future.

If anywhere on your goal list you plan on retiring, making or saving money, or have long-term spending ambitions, investing in stocks is crucial to make that happen.

To make it easy, just start by investing 10% of your weekly income. Start by setting up recurring investments into long-term holdings. Depending on your budget, you can change this amount as much as you want but 10% should be your standard minimum. 

Investing in long-term investments that incur dividend payout will create compound interest which leads to exponential growth. If you are new to investing, start by finding a topic or market that you are personally interested in like gaming, retail, or cryptocurrencies. For example if bitcoin is something you are interested in, start watching the market for when it is low and buy-in. A great tool for investing in bitcoin is using Fold. The Fold debit card gives you bitcoin with every purchase to easily start your portfolio!

Remove debt

Debt is far too common in our society today. It’s never been so easy to compile and just as easy to ignore as it doubles with interest. Just because it is so common does not mean you should participate. Even the smallest amount of debt can add stress to one’s financial freedom.

Take a deeper look at your debts. Are you still financing your car? Do you have credit card debt on multiple cards? If you can’t remove your debt today, make a plan to remove it by a certain date. 

Once you can remove debt from your life, the freedom may surprise you!

Accountability

Of course, none of this makes a difference if you only do it one time and never think of it again. Keep yourself accountable for each of your goals and remember your priorities. If you have big goals that may require dramatic changes, create a schedule to follow up consistently on your progress. This will help you to visualize your progress to keep you on the right path!

The outcome

After each of these steps, you should feel a lot more comfortable with where you are with your finances. Each step brings a new perspective to how you spend and save your money. Before you know it, you’ll have reached your goals and made a lifestyle out of the process! The next step? Start over the process and create your next goals to go along with your new, financially free life!

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