1. Set Attainable Financial Goals

If you’re not currently disciplined when it comes to your finances, setting goals that are unrealistic is an express train failure. But if you set realistic goals they will help guide you even when things appear to be tough. When critical financial decisions need to be made, your goals can help you focus on what’s important.

For your goals to be effective, they need to be personal. Right now, one of my goals is to travel more often. I’m able to do this by ensuring that I have an attainable financial goal. I set up a “Travel Savings Account”. Every Friday I have $50 automatically drafted from my checking account to my savings account. By the end of the year I’ll have $2,600.

One of your financial goals could be to pay down student loans or credit card debts. You could use the method mentioned above and by the end of the year you’ll have $2,600 to put towards credit card, student loan, or any debt/expense of your choice.

If you don’t have any debt, the $2,600 can be used to start your emergency fund. An emergency fund is a readily available source of assets(cash) to help individuals navigate financial dilemmas such as the loss of a job, unexpected illness, or a major repair to your home or car.

2. Track Your Spending

When I first started my journey to Financial Freedom I tracked every penny I spent. This allowed me to save money to buy my first home. Shortly after the purchase of my home I stopped tracking every penny because I felt I was disciplined enough to keep track of my finances without reviewing my expenses every month. I was advising people to track their expenses, yet I wasn’t following my own advice.

I regretted that decision to stop tracking my finances so I vowed to start tracking them again. I’m glad I did. I was able to see some trouble spots. Shopping and self-care expenses were triple the amount I budgeted for! I quickly made the corrections. It doesn’t matter how you track your expenses, the most important thing is that you do it. You can use free apps from app stores or a notebook. Whichever method you choose, just be sure to stick with it!

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3. Budget! Budget! Budget!

Once you’ve been tracking your expenses for a few months, use the data you’ve collected to develop a monthly budget. Personal budgets are used for managing an individual’s or a family’s finances over a short or long period of time.  The internet and app stores are filled with budgeting sheets and apps to help you budget your finances for free.

Personally, I use the budget templates found in excel because I can arrange the template to fit my specific needs. Below is a beginners budget worksheet. Please find the budget sheet that works best for you.

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Spend less than you earn! Even if you do nothing else on this list, spending less than you earn will put you ahead of your peers.

4. Lower your monthly bills

At least once a year, you should review contracts and agreements with your service providers. Please read the contracts/service agreements to make sure everything matches your current needs.

• Ask for lower rates - If you currently have cards with high interest rates that you’ve had for quite some time call to ask about lowering the rate. Companies value loyal customers and often times they will reduce their rates. All you have to do is ask!
• Inquire about bundle deals - Most companies currently offer bundle deals that aide consumers in saving. But, be careful. Most companies that offer bundles deals want to keep you under contract.
• Read the fine print - Early terminations of contracts tend to come at hefty cost.

5. Start an emergency fund

For years I lived paycheck to paycheck. When an emergency would arise, such as a car repair, I would be forced to choose between paying my rent on time or repairing my car. Of course I would choose to repair the car because I had to get to work to make money. But since I chose repairing my car this meant my rent would be late. When you pay your rent late you’ll be charged a late payment fee. The late payment fee is an additional expense you didn’t have money for in the first place so now you need to take money from elsewhere and then something else will be late. Now you’re staring at another bill with yet another late fee in this never ending cycle because an unexpected car repair happened.

I thought there was no way out until I was able to build an emergency fund to account for unexpected expenses. Unexpected expenses can be car repairs, medical expenses, or even evacuation expenses if you live in a city below sea level. LOL

Start out with an attainable goal. In step one I mentioned how I put $50 a week into a savings account for my traveling expenses. There are 52 weeks in a year. If you were to put $50 in a savings account a week, in one year you would have $2600!

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Now that $500 car repair isn’t so bad because you have already prepared for the expense. No more falling behind on bills and incurring late fees!

6. Get out of Debt

Are you struggling under a heavy debt load of student loans or credit cards? You should make it a priority to lower some of these burdens before you make big ticket purchases, such as a home.

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There are two ways I suggest you pay off debt. The first method is to pay off the debt with the highest interest rate first. For instance, if you have credit cards/debts that have interest rates of 24.49%, 17.99%, and 28.99% you should start paying off the credit card/debt with the 28.99% rate first. The idea here is that the 28.99% rate is costing you the most money so you would need to get rid of it first because it’s costing you the most money.

The second method is called the debt snowball method. Pay your debts starting with the smallest method first. 

1. Order your debts from lowest balance to highest balance.
2. Designate a certain amount of money to pay toward debts each month.
3. Pay the minimum payment on all debts except the one with the lowest balance.
4. Throw every other penny at the debt with the lowest balance.
5. When that debt is gone, do not alter the monthly amount used to pay debts, but throw all you can at the debt with the next lowest balance.

The debt snowball can give you awesome psychological payoffs, keeping you motivated to stay in the game. It's not mathematically ideal, but it will definitely help boost your confidence!

7. Earn Extra Money

You can meet a lot of your financial goals by reducing your spending and using the right savings tools. But nothing speeds up your progress like a boost in income. There are several ways to earn extra money. Asking for a raise, a second job, switching jobs, selling things, and side hustles.

Personally, the way I prefer to earn extra money is by having passive income. I realized that my job and my side hustle were very time consuming but it's what I love to do so at the moment I’m keeping them both.

Since I don’t have much free time I’ve invested money into acquiring rental property. My thought process is that people will always need somewhere to stay. Although having tenants creates wear and tear on the property, the work to fix the property can be outsourced to a contractors, electricians, plumbers, and etc. Thus, the only thing I need to do is collect the rent, set up appointments for the repairs/maintenance, and pay for the repairs/maintenance.

I’m able to do all those things with minimal time being taken away from my regular job and side hustle.