10-Step Plan to Achieving Personal Financial Freedom

As the U.S. economy continues to consolidate and improve, now is the best time to get a handle on your personal finances and work toward achieving financial freedom.

Many people fail to meet the goal of financial freedom because of poor budgeting, uncontrolled spending and crushing debt. Here are 10 strategies to get your financial life on the right track.

Health first

The wisest investment you can make is to maintain a good health. Follow a healthy lifestyle, get annual medical and dental check-ups done on time, and fight-off overweight or obesity. Poor health often results in higher medical expenses and increased health insurance costs and may even force you to retire early with inadequate retirement savings.

Live within your means

Focus on your needs instead of wants. It is possible to lead an enriching life within limited means. Frugality is the fastest and safest path toward eventual affluence. Develop a mindset of saving, investing, and multiplying your wealth rather than letting your money evaporate from spending.

Improve yourself

When the economic environment is uncertain people who have worked on upgrading skills and knowledge usually keep their jobs. Continuous education will put your career on the fast track. Even if you are an entrepreneur or a self-employed professional, updating skills is will keep you ahead in competitive marketplace.

Negotiate everything

Bargaining is not a dirty word. Rather, it’s basic personal finance. Unfortunately, many Americans are reluctant to bargain for the best price because they think it is embarrassing or “cheap.”

In reality, sellers often are happy to negotiate, give discounts and rebates and offer more favorable terms of purchase. They know it builds customer loyalty, encourages bulk buying, and brings repeat business. Try negotiating. You will find sellers happy to oblige you more often than you think.

Maintain what you have

A stitch in time saves nine, as the saying goes. The cost of maintaining your home, car, appliances, furniture and fixtures — even well-made clothes and shoes — is far cheaper than the replacement cost. Do not shy away from spending on periodic maintenance of all your valuable assets and property. You could save thousands of dollars a year. 

Keep good credit

Maintaining excellent credit will not only open doors of financial opportunity for you but will also keep you away from the dreaded debt trap. Lenders use your credit score to decide what interest rate they may want to offer you when you plan to take out a new mortgage, refinance an existing loan, or purchase a new vehicle.

Your credit score influences your life insurance premiums and auto insurance rates, which will add up to a serious amount over time. Remember, insurance companies assume that a person who is less creditworthy also is likely to be less dependable in other areas of life, such as safe driving and healthy habits.

Avoid credit card debt   

Pay off your credit card balance in full at every month. Prioritize this payment over other expenses because the high interest charges on credit cards will corrode your financial stability over time. Moreover, if you pay off your credit card bills on time, that alone will improve your credit rating.

If there is no way you can curb your habit to spend more than you earn it may make sense to switch from credit cards to debit cards. You cannot run up a debt on this card; it will only let you spend until you have emptied your account. Remember to also opt out of overdraft coverage if you are trying to limit overspending.

Automate your money

One of the tried and tested personal finance best practices is to automate your recurring monthly payments. If you have the habit of easy spending, this practice will ensure that your essential monthly bills are paid out first before you can spend on any non-essential items.

Another good practice is to set up automatic fixed financial transfers from your checking account to a savings account. This will force you to save a certain minimum amount every month to build an emergency fund as well as retain some amount for investing. Automating your finances minimizes distraction while helping you to build savings and investments without too much thinking or procrastinating. 

Buy stocks

Historically, no other asset class has enabled people to grow and multiply their wealth as much as equity investments. Stock markets fluctuate in the short run but, over longer periods, investing in high quality stocks can help you attain financial freedom. Do not ignore the power of compounding. Invest small but invest regularly, and be patient. That is the safest way to make big money over time.

Avoid speculative investing, day trading and complex financial products that you do not understand. Stay within your circle of competence and do not attempt to get rich overnight through risky stock market moves. If you can invest in equities with discipline, over time you will find that gains are inevitable.

Hire a financial advisor

Once you reach a certain level of wealth it may be time to hire a professional financial advisor. A trusted advisor may turn out to the smartest move in your journey towards financial freedom. Your advisor will educate you about your best savings and investment options and give you right advice regarding taxation and the implications of financial decisions you must make.

Remember that a financial advisor has no personal stake in your money. They remove emotion from the equation and can bring objectivity into your financial moves. All you need is just a few right decisions in life to take your personal wealth to the next level.  

Recommended Articles

3 Ways to Save Money and Make Sure You Get the Absolutely Best Deal

Marketing is meant to get the word out about the "latest and greatest" products, but new doesn't always mean better. From electronics, to clothes and dining room sets, always remember,

Options: Why Buy Puts? To Make Money When You Think a Stock Will Fall in Price

Beginning options investors often struggle with the concept of put options. They have no trouble with call options. With calls, beginners usually grasp that you will buy a predetermined number

Bitcoin Zooming Higher Again. Speculation or the Future of Money?

As Bitcoin threatens to break through its record highs set a few years ago, at least some people are likely to get involved in speculating in them again. Many seem

5 Proven Ways to Earn Powerful Side Income

If you want to earn extra money with relative ease, whether it is to save up for retirement or prepare for a well-deserved vacation, one of the best things you

zto

Day Trading Now: Stock Too Expensive? Buy a Slice

The cost to build a diversified stock portfolio is often the highest barrier for new investors. The outlay required to buy a basket stocks is more than the dollars available.

Looking for Better Returns? 5 Ways to Invest in Brazil

Brazil is known for tourist attractions, its natural beauty and soccer. The former Portuguese colony is also a thriving multicultural country — a melting pot not unlike the United States.

Add Some Spice to Your Portfolio with This Consumer Staple Stock

When the vaccine results from Pfizer (PFE) were announced on November 9, it sent the stock market on a wild ride. Sectors that had been underperforming the overall market screamed

Iaccino: Market Volatility Here to Stay

Bob Iaccino, editor of the Stock Think Tank, talks about Amazon's move into prescription drugs and market volatility on Bloomberg News.

Beat the system by understanding both sides of the trade, reward and risk. Get Bob Iaccino's Stock Think Tank newsletter through this special offer.

Are Cannabis Stocks a Good Investment for 2021?

Cannabis and CBD oils are booming industries.  Economies see a massive boost of billions of dollars when these two hit the scene. From recreational to medicinal, these plants offer a

The Benefits and Pitfalls of Trading Options on ETFs

An exchange-traded fund (ETF) is a collection of assets that track specific investment categories. For instance, SPY tracks the S&P 500. ETFs can also track sectors and industries, such as

Options Strategy: Sell Covered Calls on Technology Stocks

Stock prices of publicly traded technology companies have been resilient this year. Many remained unaffected or benefited from the onset of the current crisis. Other sectors seem more exposed to

Looking for Foreign Stocks with Powerful Dividends? Look No More! (VYMI)

Declining yields on investment income products has let investors to hunt for high dividend yielding stocks to boost their income. One product that I have actively used and would like