Achieve Financial Freedom
In Your Personal Life and Business Life
Over the years, many books have been written, dedicated to the subject of debt, saving money and how to achieve financial freedom. The idea seems simple enough: donâ€™t spend more money than you make. However, as many of you may know, this is not a reality for many people these days. Sometimes itâ€™s a personal choice â€“ such as a decision to purchase something that is well over the budget. Other times, it is merely bad luck â€“ such as an unexpected life event.
The following tips are important pieces of advice to follow to achieve financial freedom and ensure that you donâ€™t get trapped by your own finances.
1. Save a percentage of your monthly income
While 10% is typically the ideal amount to save, understandably, some people do not make enough to follow this tip. Rather, the goal of this tip is to start a routine of saving money each month. Over time, this amount will grow, allow you to achieve financial freedom and will provide you with financial security in case of an unexpected emergency.
2. If you have to go into debt to purchase it, you can’t afford it
This tip is not referring to major investments, such as purchasing a home or vehicle. In fact, very few people can afford to buy a home in cash. Rather, this tip is referring to the small things that arenâ€™t essential for survival. If you want to purchase that luxury item but the only way you can afford it is for it to go on your credit card, then you cannot afford it. The annual percentage rate of credit card interest frequently exceeds the double digits. As a result, the interest you pay on debt ends up costing you more in the long run.
That being said, paying by credit card by itself isnâ€™t a bad thing. In order to establish and build a credit history, you must use a credit card. By building a credit history, this increases your credit rating and consequently allows you to qualify for better loans and interest rates in the future. As a rule of thumb, if you are going to charge something to your credit card, make sure that you can afford to pay for it in cash if you needed to.
3. Make a budget and track everything you spend
For many, the phrase â€˜out of sight, out of mindâ€™ applies to spending money. It is easier to spend when you are purchasing on your credit card. Why? Because you are not actually seeing the physical money leave your hand when you buy. Frivolous expenses add up a lot faster than people realize. The best way to take control of your spending is to keep track of your cash flow. Take account of every cent you earn and every cent you spend. This will allow you to measure what you are spending each month, as a percentage of your income.
Similar rules apply to the financialÂ stability of your business. To learn more about techniques that will help you to stay profitable in business, click here to receive a FREE Business Evaluation.
If you would like to achieve financial freedom in your business, contact your local Business Coach Rob Carol.Â Business coachingÂ helps owners of small and medium sized businesses with their sales, marketing, management, team building and so much more.Â Call 604-942-2866 or visit www.robcarol.com/