If you take these seven steps to financial freedom, you will achieve financial freedom. The key is to do the steps and become committed to doing them. Also, if you are married both of you must become committed to doing the steps.
- The first step is to begin saving. You need to have savings in order to cover any emergency that occurs. Start small by aiming to get $1,000 as quickly as you can. Also, start to save for retirement. If your employer matches, save up to the match. Otherwise, open a ROTH IRA and begin saving for retirement.
- Payoff your consumer debt, credit cards, loans, etc.
- Increase your savings, so that eventually you’ll have eight to twelve months of living expenses in an emergency fund.
- Save for major purchases, such as autos, 20% down payment for a home, etc.
- Pay cash for an affordable home or begin prepaying your home and begin investing.
- Payoff your mortgage. Save for your children’s college education.
- Fully fund your retirement.
The only way to ensure that you achieve these steps is to learn to live below your means. Stop incurring debt, use a budget and use cash. Use a credit card only if you are able to pay it off in full each month. Otherwise, stay away from credit cards.
