This is the foundation series for setting your finances right. Go through the series as a financial check list. Great for beginners and as a refresher course.
Once you have paid off your debt (with the exception of your mortgage), you are ready to start seriously investing.
The only exception for investing before you are debt free is retirement.
It’s never too early to start investing some amount into a retirement account, whether it be through your work’s plan or on your own plan.
Retirement should be an automatic amount that is deducted every month, no matter what.
This is the philosophy: Pay yourself first!
Even if you can only afford $10/month at first, you should be investing something into a retirement account…
This is a quick guide on dumping your debt.
Debt comes in many forms, such as mortgages, credit cards, loans and ways you’ve never imagined.
Nowadays, people find new, innovative ways to get themselves buried in it everyday.
It’s an art really. This brings me to my first point:
Debt is not our friend. In fact, it’s the enemy.
Racking up debt by taking out loans and making minimum payments on credit card bills can ruin your life. Fortunately there are solutions to this problem.
Here’s a little secret…
Unexpected events are some of the only events we can expect.
How do you expect the unexpected? You need a plan.
It’s important to be prepared. Financially, there is one major step to take that can leave you feeling secure.
An emergency fund.
An emergency fund is the most important foundation of your financial health. No matter where you are in your financial journey, having an emergency fund will get you closer to your goals and limit your setbacks.
Using a credit card for emergencies can turn an emergency into a catastrophe. Getting into credit card debt will just create more problems, that’s why we plan for emergencies without credit cards, right?
Let’s start with the basics…
No matter what your beliefs are, I think most of us are pretty familiar with this passage:
“give, and it will be given to you. Good measure, pressed down, shaken together, running over, will be put into your lap. For with the measure you use it will be measured back to you.” (Luke 6:38, ESV)
Giving isn’t only popular among Christians, some other influential figures had been known to have high regards for giving:
“The value of a man resides in what he gives and not in what he is capable of receiving.” – Albert Einstein
And remember, no matter your financial situation, you can always give something…
Once your monthly bills are organized, you can set back and relax.
It just takes a little time to accomplish this and it’s worth the peace of mind.
Don’t be late on your bills because are unorganized.
That is no excuse and the companies that you pay would agree. Get organized! Know what and when money will need to be paid.
There are 3 simple steps…
After you know your net worth, you need to figure out if you are headed in the right direction.
You need to figure out where your money is going. To do this you will need to track all of your expenses. Write down every bill, payment and expense that you pay in a typical month.
Most of the time people spend a lot more than they think they do.
This is why it’s important to…
Determining you net worth is an easy formula, but getting all of the information together may be time-consuming.
It’s worth it.
You need to know you net worth because you need to know where you are starting. If you already know your net worth then you can skip this step.
How do you determine your net worth?
It’s a simple formula…
The most important step to success in anything is the first step. If you don’t begin, you won’t get anywhere.
As we know from Lao-tzu: “A journey of a thousand miles begins with a single step”.
This is the first article in a series on beginning your path to financial success. Always remember that finances often seem more complex than they really are. It’s important to know that you control your financial future.
You can choose to be financially free.