When it comes to personal finance, most of us fall between the two extremes of either being blissfully ignorant and relying on hope to bring us financial freedom, or being detailed down to every penny spent with all of our models and plans organized alphabetically. Are you the epitome of ignorance is bliss? Or knowledge is power?
Depending on your life experience, one of the above scenarios probably describes you, and you more than likely know folks who’ve managed just fine in both camps. But at the end of the day, you can’t have both power over your finances and be ignorant towards them. Without order, attention, diligence and organization, you cannot expect your finances to work as hard as they could.
The first step towards financial freedom is organization. There are a plethora of resources for this to help get you started. While this step may seem unimportant, it is in fact the foundational piece of your pathway towards financial freedom. Without this basic insight into how you spend money, you cannot take accurate and definitive steps forward.
The next step is worthwhile analysis. Examine your budget and be honest with yourself – where do you spend too much? Where do you spend too little? What changes do you need to make? When making changes, none of us prefer to go from spending $800 eating out each month to $200. So, start small. Every step counts. Aim for $600 instead of $800, see how it feels, and adjust.
The third step is set goals and make a plan to get there. Work with professionals to keep you on track and guide you through the many options available to you. Let go of the notion that a financial planner’s only benefit is to grow your assets. It’s not! Instead, be open to their primary responsibility of helping you choose the appropriate and best action given your situation, goals, and means.
It takes time, energy, focus, and commitment to make one’s dreams of financial freedom come true. Begin with baby steps and move forward.