Do you want to learn the basics of personal finance and begin your journey towards healthy finances in this blog We’ll talk about the seven steps leading to financial freedom!
Step 1 pay yourself first Make the decision that some of your hard-earned income is going to you at the end of the day Not your local shopping store barber or massage therapist makes the decision that you are going to take control of your finance.
Step 2 creates a budget here. Do we document all your income that is coming through in all of your expenses that are going out.
Step 3 specifies whether your expenses are a necessity or one? Now you know which expenses are needed and which you can possibly cut down upon a lot of the time. I find that people are mindlessly spending money because they’re not documenting where the money is going This is the surprise stage where you get all those unwanted surprises of what you have been wasting your money on If you are aware of your exempt income coming through Your exact expenses going out you can create a longer-term plan to ensure you are saving week by week.
Step 4 create an emergency fund of three to four months of expenses Unfortunately being human anything can happen to any of us at any point in time We might injure our hand whilst playing sport and not be able to work for a couple of months We need money to fall back on in case of emergency so that we are not relying on others financially to get us through.
Step 5 save a certain percentage of your income and put it into investments Now investments are things that will generate income for you in the future our Investment account can be put on a range of assets including real estate the stock market or bottoms.
Step 6 build up your assets and use the power of compound interest to become financially free If week by week we are saving money and putting it into our best an account we can use the power of Compounding and time to grow a wealth they’re quite amazing rates. We build upon this pin account large enough so that it is generating enough interest back into our account that we can live off Then we are financially free. All it takes are some discipline Some time put into learning about investments personal finance and a little bit of patience in me you can get to a place of financial freedom
Step 7 Review your financial plan monthly to ensure your financial habits are healthy It would be nice if we could work out once and be fit for life Unfortunately Fitness is something we need to do regularly in order to remain healthy it is the same with our financial habits Financial habits are not just formed by one day of planning We must Wrigley review our financial plan and financial habits to ensure. We are still on the pathway. We want to go To ensure we are saving weekend week out and constantly growing our investment account until we reach financial freedom So that was personal finance 101 if you do want to learn more detail about different types of investments Developing healthy financial habits and personal finance being considered.