Financial Independence

July 5, 2012 § Leave a comment

All of us want to be free. But we’re not free if our money controls us. Want to really be financially free? Control your money with wisdom with these steps.

 Have a budget– Self-control goes a long way in being free, though that seems to some to be impossible. Often we think freedom means license, wildness, possible chaos. But you know, if you have raised a compliant child, that self-control allows you less external control.  Unpleasant consequences are avoided if you practise self-control. Applying this logic to finance, the virtue of self-control means having a budget.  When you have a budget you have a picture of where your money goes and you can plan where it’s supposed to go. You may not LIKE where all the money goes. But at least you will KNOW where it goes and that makes you the boss of it.  

 Stop spending – The second step to be financially free is to stop spending.  Are you spending as a hobby? Are you spending to feel good, or because you ‘deserve’ it, this thing you are buying? Stop spending out of a sense of entitlement or other emotions.  Emotions as a spending trigger, have no part in being financially free. If your emotions dictate actions that are not in keeping with your plan, you are only a slave to them. And last time I checked, no one thought a slave was free.

Know yourself– You are unique. When you create a budget find one that works for you. You will have more success when you recognize that YOUR way of budgeting, your priorities and those of your family, may differ from how others manage their budget. Make you budget, make your money method, reflect your money personality. When I started trying to figure this budgeting thing out, the only kinds of budget I could find was more accounting-like in nature. I could not figure it that budget out for my family’s spending. And it took a long time for me to feel confident enough and wise enough to get back on the hunt and find a method that really fit my needs.

 Track you money– By tracking your money I mean something different than planning where your money SHOULD go. A budget is your money’s PLAN for it’s future use, where it is intended to go. But you’ll also need to track your money to see if it indeed went where you hoped and planned it to go. Budget is one thing. Then there’s the ACTUAL place the money got to, if you see what I mean. Maybe there was an emergency or a time of weakness and things went awry. That leads us to the next two steps.

 Have an emergency fund– Either deposit a chunk of money to get this account started and make regular contributions, or make tiny deposits when you’re able. But aim towards the goal of having an emergency account, separate from your regular money, as soon as you can. Always remembering that you will not, at first- and perhaps for a while, have enough saved for every emergency, you will make progress. And eventually, perhaps many years from now, but eventually, you will be cozy.

 When you fail – dust yourself off and get back on track. Forgive yourself, little buckaroo. Don’t be lazy and not try. But you didn’t know yesterday what you know today. You weren’t this age last year since you were younger and less knowledgeable. You’re getting wiser by the day. So try hard, but give yourself a break when you mess up. Tomorrow’s a new day and you will do better. I know it.

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