Independence Day! FOLLOW UP Declare Your Financial Freedom and Independence
As you celebrated Independence Day, 2016, were you enjoying your financial independence, “Working because I want to work, as opposed to working because I have to work”?
I learned the hard way the most powerful tool in today’s society is money. Something I was never taught to use to my advantage. Money and personal finance, investing, saving, sharing and particularly spending always invoked feelings of pain and confusion within me to the point I often became overwhelmed with dealing with money.
When I reached this point I often sought to do the one thing that temporarily took away that feeling of pain and confusion. I went on spending sprees! What I got in return was temporary gratification and a feeling I deceived myself with for years thinking I was in control of my money. Yet! All the time my money was controlling me.
This way of thinking made me a slave to money. Had someone told me when I was younger how to take control and manage my personal finances I could have used the money I earned over my lifetime to earn my own financial freedom.
I am now on my way to financial freedom, using the following simple steps:
- I learned to Pay My Self First – for every dollar that comes into my life put a percentage away for my future investments.
- I learned to give money away – to become more charitable with both my time and money. Doing so has help to loosen the grip that money has had in my life.
- I had to set some financial goals – I needed these goals to guide me when I strayed off course. The goals became like a light house as I sailed through a storm.
- I had to learn my spending habits – The easiest way for me to do this was to track 30 days of spending to find out where my money was going, and when I found out it was an Eye opener. It gave me a great point of reference as to where I could begin to save. I continue to track my spending today and always find other ways to save.
- I had to develop a budget – and learn to live within the budget. In the beginning it was hard but with discipline I was able to follow the budget.
- I had to stop eating out so often – In developing the budget it amazed me on how much I spent on eating out especially when I know my wife and I prepare delicious meals at home.
- I began to pay closer attention to my bills – not just open and pay them. I began to read them and compare the amounts billed with the receipts I kept though the months. By doing this I was able to catch mistakes like over billing, incorrect charges and areas of waste where I could cut down on things.
- I started an emergency fund – The recommended amount is three to six months of total monthly income. To me this is a substantial amount of money. Now I’m well on my way to achieving this goal, I’m also thinking of ways to let that money begin to work for me instead of just setting in a savings account.
- I got rid of all my credit cards but one – This day and age you need at least on credit card to fly, rent cars, hotels etc. Most importantly, though, any charges that are made are paid in full at the payment date to avoid any interest charges. This also helps to improve the credit rating. I also have begun to pay my auto, homeowners and health insurances etc. yearly to avoid the monthly/quarterly fees. By doing so I saved hundreds during the year.
- I begun to spend less than what I earn – cutting out the none essentials If I don’t need it let it go. Learn to differentiate between wants and needs.
- I began to read a lot about personal finance – learning ways to delay my gratification to spend spontaneously, to research for the best prices.
- I’m currently exploring ways to earn some extra income – I’ve never been one to be afraid of hard work, but if I’m going to do it it’s going to benefit me over the long haul by becoming a passive income stream. This one I’ll get back to you on.
In a Capital One 360 survey, 44% of U.S. adults said financial freedom meant not having any debt, 26% said it meant having enough saved for emergencies and 10% defined it as being able to retire early.
In the real world I should have learned about financial literacy from my mother but she didn’t know anything about financial literacy because she never learned herself. In her day it was never taught in schools.
As it was never taught in schools in my day: and in today’s schools teachers are so busy teaching to “the test,” that financial literacy falls back on the responsibility of the parents. Again a great deal of them have not had money or financial money management training themselves thus perpetuating the cycle of poverty and poor money management skills among an entire class of people.
Financial literacy for me has become a life of learning experiences both good and bad. Writing this blog has become as much a part of my wealth as the money I’ve accumulated over a lifetime.
What has the value of being financially literate or not been for you and your family? Leave a comment below.