Becoming financially free is possible if you take control of your money and lifestyle and stick to your intention as the highest priority. Even if you are in debt right now, with some planning, you can find soon your bank account start to accrue some savings.
It only takes some time to do some financial planning now and then make some goals to make sure you achieve your objective sooner rather than later.
1. Begin by taking a personal inventory about the true state of your financial affairs as they look today. Prepare a personal balance sheet. Create two columns and in one column, list the money saved and assets you have that are available and your regular salary or other sources of income. The goal of financial planning is to be able to pay the bills in the second column from what is available in the first column and still save some amount.
2. The second step is to create your personal weekly budget. Base your budget estimate on your weekly income.
- Begin by estimating your weekly income before you pay all the bills or do anything else with your money.
- Put a minimum of 10- 20% of your weekly income before bills into a savings account. Remember to tithe because it spiritually acts as an insurance premium for Divine Providence. You'll understand well, how this works if you walk by faith and not by sight.
- Then start to work out how much you expect you'll need to pay in the bills this month. Include all debts as well as utility and other bills you may have or expect to receive. Ensure that you budget enough amount to pay more than the minimum amount required to settle your debts. If you only pay the minimum required you will not achieve your goal of being debt-free faster.
- Divide that amount by four and this will give you a weekly amount you will need to subtract from your income to cover your bills on a weekly basis.
- Allocate any remaining money for personal use, to increase bill repayments or to increase savings. Give priority to bill repayment, then necessary personal needs, and last savings.
3. The third step is to start looking for alternative income sources if your expenditures (not including personal use money) are greater than all your income. This may mean taking a second job, or looking for a higher paying job, or starting a new business. The price you pay for short-term pain will significantly gain more dividends in the long-term. M. J. DeMarco, the author of the book: The Millionaire Fastlane: Crack the Code to Wealth and Live Rich for a Lifetime, this is his quote from that book: “Instead of digging for gold, sell shovels. Instead of taking a class, offer a class. Instead of borrowing money, lend it. Instead of taking a job, hire for jobs. Instead of taking a mortgage, hold a mortgage. Break free from consumption, switch sides, and reorient to the world as a producer.”
4. Use credit cards with caution. It is advised that you always use them as you would use the hard cash. Only fall into debt when you truly have no other alternative to avoid getting into debt. You should clearly understand that what you're doing is - you're spending your future, unrealized earning in advance. So, once your financial situation improves, repay the balance in full as soon as possible to avoid high-interest charges on an extended period of repayments.
By focusing on these steps, it will be a matter of time before you achieve, what you truly deserve, a life with financial freedom. Now let's turn our discussion into understanding the meaning of becoming financially free.
“‘Should people cheat God? Yet you have cheated me!’
But you ask ‘What do you mean? When did we ever cheat you?’ ‘
You have cheated me of the tithes and offering due to me.
You are under a curse, for your whole nation has been cheating me.
Bring all the tithes into the storehouse so there will be enough food in my Temple. If you do,’ says the LORD of Heaven’s Armies,
‘I will open the windows of heaven for you.
I will pour out a blessing so great you won't have enough room to take it in! Try it! Put me to the test!
Your crops will be abundant, for I will guard them, from insects and disease. Your grapes will not fall from the vine before they are ripe’’
says the LORD of Heaven Armies. ‘
Then all nations will call you blessed, for your land will be such a delight’ says the LORD of Heaven’s Armies.”
Malachi 3:8-12, NLT.
The Meaning Of Becoming Financially Free
Let's start with financial planning, which in its simplest definition, is about taking control of your financial situation instead of allowing it to control you. It is about creating goals and then religiously committing to them. The reward for this action is what we call - the financial freedom, which you are craving to achieve.
This financial freedom will enable you, first of all, it will make you debt-free, and secondly, you will be saving more money regularly, and thirdly, you'll remain with some money to spend on the things you enjoy and matter most in your life. In short, you'll be free financially.
To achieve financial freedom and live a life that is debt-free, or at least, have the ability to pay everyday expenses and provide for your family without needing to go into debt is the noble goal and it should be so to all other people. If you can't provide for your family basic needs, then be very careful, because depending on others, whether for borrowing or begging or doing evil, it's a guarantee that you lose your honor at any time.
And to achieve financial freedom need not be that difficult. People with a poor credit rating can turn their lives around and achieve a better rating simply by making financial goals for their life. Financial planning is not just for the rich and famous. Anyone who wants to achieve financial freedom must and should engage and incorporate some sort of financial planning in their lives.
Achieving financial freedom involves three major action-steps that you should plan on and act on them faithfully in order to liberate yourself from the prison of living in debts.
Creating A Budget
Creating a budget means ensuring income does not exceed expenditure and the goal of the budget is to create a lifestyle plan that covers all expenses and provides extra cash for saving and personal spending. You must learn to live within your means.
Creating a budget involves not only listing the current income sources, but potential other sources to increase income if required. The interest paid on debts is a constant drain on finances. While it may seem logical to payout small debts and then focus on the large ones, in fact paying off the larger debts first will save more money in the long term.
Living By That Budget
A budget is only as successful if there is a commitment to live within the budget and resist any kind of impulse of buying anything that may cause voluntary over expenditure. The exception to this rule is the true emergency, which although not budgeted is covered by the savings plan you have put in place or plan to buy an insurance policy for a predictable emergency. If you have plans to buy household furniture or other expensive items, delay doing this until you are debt-free.
Increasing Savings
Allocate a weekly fixed amount of money as savings. Do not compromise on this amount for any reason. It is your key to future financial freedom. It's your safety-net when you fall into financial disasters. And along the way, you can start investing some of your money in order to leverage the growth of your nest egg by the compound effect available to you when you invest wisely.
Here's a video by Stefan James of Project Life Mastery. Here he advises us to seek financial freedom first then start to work on becoming rich when our income has exceeded our expenses.
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