7 Paths to determine your financial fate on this Independence Day

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By: Good Nelly
on 29th Jan,2016

Like a real soldier, take an oath and make a true commitment to your financial life on this day. He understood the value of money in his life.
7 Paths to determine your financial fate on this Independence Day

The United States of America celebrates its 238th birthday in this week! So, get set to light firecrackers and celebrate the big Day with aplomb. Like a real soldier, take an oath and make a true commitment to your financial life on this day.

Having control and no more worries related to money matters (bills and credit card debts) is actually called financial freedom. So, if you're really interested to make a commitment and achieve financial freedom, then adopt right ideals to make it happen.

My learning experience

I learned how to deal with money from my dear pop. He understood the value of money in his life. Thus, he always wanted me to know how to get money, how money works in our life and how to make money. Today, I still remember that evening of a rainy day, when I was only 13 years old. My father called me in his room. I saw, he was sitting on the couch with a notebook .Then he introduced me how to go for a personal financial plan. He told me about saving money, how to avoid debt, compound interest briefly with different examples. He told me, “if you have a right financial plan, you have many choices to set a goal for a successful financial life”. I shared my story to tell you that my dad's financial plan was my road map. It will help me to achieve a successful financial career.

Many of us don't have financial plan. We often plan for other things (marriages and having kids, career) but avoid our financial goals. But believe me, it is very important to set a financial plan to make your personal life better. A good financial plan will help you to navigate to your dreams.

Read more: Plan your financial independence being a millennial

Following are some simple paths to achieve financial freedom:

Path 1# Turn your personal finance on the right track.

Understand the right way to deal with money on a daily basis. Be sure your income is greater or equal to your expenses.

  • Make a monthly budget: Sit with your spouse and make a budget based on your income. Thus, you can improve your spending habits. Don't over spend money that you have.
  • Be organized: Try to organize your finances. Try to keep a tab on every single penny you spend. Try to live within your means. Start saving money for big expenses (travel, new vehicle).

Path 2# Improve your financial knowledge

Don't think that your education is over when you left college. Try to improve your money management skills. Try to keep yourself updated financially. There are many websites related to finance. It will help you to know more about finance.

  • Invest money wisely: Your knowledge will help you make proper money investment. Try to know about passive investing through index funds in detail.
  • Know the benefit of reward credit cards: Avoid unnecessary trouble related to credit cards. Say no to credit cards that carry annual fees. Go for a credit card that pays you. Credit card have several reward programs. Pick one which is suitable to your lifestyle. Try to use multiple accounts at each bank. It will help you a lot to save money (account for an emergency saving, for vehicles, for vacation).
  • Path 3# Start developing a spending plan

    Try to create and use a spending plan developed by yourself. It will help you avoid financial troubles. Try to save for future . Do not spend whatever you get.

    • Spend money consciously: Try to use your money when you need. Do not spend money on reflex. Generally people pine to have what others have. Do not subscribe for magazines if you don't have time to read them. Avail membership for gym when you really want to go there. Think once before every purchase.
    • Save for emergencies: Sometimes, people don't want to think about emergencies in life. Do not forget that emergencies are undeniable. So, start saving a fixed amount of money for a crisis time. Thus, you will avoid an additional debt too. Make a plan for medical expenses, broken appliances and vehicle repairing.

    Path 4# Check your bills

    Check your all bills, contracts with service provider and bank after the end of every year. Review your financial account and make sure all are really useful for your needs.

    • Review insurance: Try to have all your policies under one company. Review your insurance coverage. Any consultant can help you to review your insurance. You can get idea from a consultant if you need extra coverage.
    • Check your agreements: If you do not understand any policy regarding credit cards, make a call to the customer services to understand the policy. Verify all the services you opt (electric, phone, washing machine, refrigerator).
    • Path 5# Work on your account optimization

      Are you sure that you're getting enough benefit from your bank accounts? Make sure that the interest amount you're getting is justified. Many people are not even aware of the facts, that they're getting low interest rate than others. If you are one of them, then it is right time to work on account optimization.

    • Go for proper saving account: You can increase the interest rates in every month or years from high yield savings account. You will find the service online.
    • Say no to credit cards: Make a habit of using cash and debit card for every purchase. If you have several credit cards in your pocket, you can never prevent yourself from buying things. So, throw away the credit cards to avoid credit card debts.
    • Build an emergency fund: Save money for rainy days. Build up a well funded emergency fund and avoid worries related to medical issues, loss of job etc.
    • Path 6# Set a plan for retirement

      Start thinking about your retirement account. No matter what is your age now, you'll get benefit from compound interest if you're young. Start making investment wisely for retirement. Manage your stocks and mutual funds. It is very important to contribute money for 401(k).

    • Say goodbye to debt: Try to release yourself from debt burden. Plan how to save money by paying off debt. Start paying for debts with smallest interest rate. Set an amount of money to pay for debts monthly.
    • Increase retirement savings: Try to work for some more years to make money for retirement. Save a good amount of your salary for your retirement. Redefine your financial goals for a peaceful retirement.
    • Path 7# Try to boost your income

      Try to boost your income to get financial freedom for future. There are several ways to make extra money.

    • Start a business: Plan for small business to make money. Utilize your extra curricular knowledge to increase income. If you have a strong ability to teach students, then why don't you start giving tuition?
    • Part time job: If you are really worried about your huge debt, then try to do a part time job for a certain time. Negotiate your salary before getting hired. Remember your hard work (more than 40 hrs a week) will give you freedom from debt.
    • Final words

      The word “Financial Independence” appears in your mind when you've decided not to work for money anymore as you've earned huge money for your future. But in my opinion, financial freedom is beyond a good bank account. It is actually about our satisfaction and freedom from meanness. Get your financial freedom as well as cover all your responsibility (child education, retirement savings for spouse, a trip to Italy, etc.) in your life. And the best part is you can do it. Saving for retirement, getting out of debt is not unbeatable. My best wishes are there for you on this Independence Day!

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