When you’re not born into money or never seem to have enough of it, the concept of financial freedom may seem lightyears away from your reality. Chin Up and take heart – with a bit of planning and discipline, financial freedom is possible.
Financial freedom can be achieved by anyone – even you, who is doubting herself. Here are 5 tips to get you on track for a brighter financial future.
Know your situation
Put some time in your diary to look at your finances – honestly and truthfully. Start by drawing up a budget here, listing your income and your expenses. Try to prioritize your expenses, so you can then see where you might be able to cut some spending and/or how much you may be able to save each month.
Get your credit report
Your credit report is important. It contains details about your personal and credit history, current payments, and account balances. Your report also includes your general credit score and personal information. This is an important part of knowing your current situation and it shows you the information that potential lenders will see when they enquire about your personal credit history from the bureau. You are entitled to your free credit report which you can get here – unlimited and free of charge.
Spend less than you earn
Once you know your current situation, the next step is to get into a position where you spend less than you earn. It often helps to identify less important expenses (e.g. entertainment) and deprioritising those. We all have unavoidable expenses such as loan repayments – make sure that you pay those. When it comes to the avoidable expenses such as your clothes and shoes, these are often not a matter of urgency or need.
Set some realistic financial goals
These could include saving, cutting back on your debt, budgeting better or improving your credit score by paying off loans or other debt on time. You can get a free credit report and track your progress here. By setting realistic goals, you’re more likely to stick to them and stay motivated as you achieve each of your milestones. If you’re struggling to make ends meet each month, start off by seeing if you can save cut out some non-essential expenses.
Once you started, keep it Up
Getting into good habits such as reviewing your budget monthly, consistently paying your bills and trying to save or invest some money each month, will improve your financial well-being. It’ll also be much less daunting than if you let the bills stack up before you do anything.
Setting yourself Up for a financially fit future, isn’t always easy, but taking that first step, no matter how hard, is always better than not doing anything at all.