Ah, the golden egg. Financial security.
Some of us have it. Many of us strive for it.
However, with a bit of forward-planning, is achievable for all of us.
First of all, what is your definition of financial security?
- Is it owning your own home?
- Is it never having to work ever again?
- Or is it simply having the option to choose to work because you enjoy it? Not because you have to?
Financial security can be different for everyone.
To us, if you can sleep at night without worrying about your finances, how you are going to pay for your child’s education or your next electricity bill, then you are on your way.
5 tips to reach your financial goals
So let’s look at how to reach this pinnacle.
Warning!
There are steps to follow.
They may not be fun at all times, but they have proven, year after year, that they work.
We see countless clients go from financial stress to financial freedom by following these steps.
Let’s start.
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Set a long-term goal
As we discussed earlier, what is your financial goal? If you have nothing to aim for, how are you ever going to reach your goal?
Your long-term goal need not be huge. Start small. For instance, pay off a credit card debt. Eliminate all AfterPay style payment options from your life. Cut up your credit cards.
Once you reach that goal – set another.
Pay extra off your mortgage and save years of interest payments. Set a retirement age and cross those years off! Setting short and long-term goals will help you stay on track to the big-ticket financial freedom goal.
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Avoid big debt
We are a society of ‘wants’.
From fast cars to nice clothes to the sprawling house. But do you need it all? Some debt is inevitable – such as your home loan. But do you really need to spend thousands on your credit card to pay for a new wardrobe every season or fancy new furniture?
We highly recommend saving for these items and paying in cash to avoid needless credit card fees and charges. You don’t need them in your life!
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Spend less and give more!
Yes, that’s right. Once you start to give more – such as donations to a chosen charity, you actually start to realise how much less you actually need.
As the saying goes ‘no one has ever become poor by giving’. Additionally, by spending less, you will start saving more. To resist the temptation to spend, look for savings accounts that can only be accessed online. Gone is the urge to whip out your debit card. It’s amazing how making it harder to spend your funds actually works.
If you have the ability to lock money away in a term deposit, even better. This is a good option once you have built up your buffer which we chat about in step 4.
It’s amazing how quickly your savings account can accumulate and then be at your disposal for further investment or big-ticket purchases.
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Have a buffer
Life can throw a curveball at any time. COVID was proof of that.
Start by saving up 3 months of your salary into a separate bank account that you do not touch. 6 months is even better.
It is amazing what the knowledge of having a money buffer can do to your state of mind. It provides the comfort of knowing you will be ok should anything untoward happen and you cannot work.
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Stay on track
Finally, stay on track. Being financially savvy need not be a bore.
We are not saying to not treat yourself every once in a while. Yet, maybe not as excessively as you may have done before. Instead of eating out weekly, stretch it to fortnightly, then monthly. Shop only in sales. Look for second-hand furniture and school uniforms.
Set goals and/or limits for your ‘fun’ spending. Whether it be a holiday, clothing or a new car – having a goal helps you work towards something, as opposed to withering your money away on what may end up to be…nothingness.
Even for big picture items like a new car – break it down into smaller sized portions and tick off every time you reach $2K or so. Celebrate the wins!
Keep reminding yourself of the big picture to keep yourself on track.
So there you have it. Our 5 steps to finding your financial freedom.
Start small – end big!
If you’d like to chat to us about your financial goals, book a time in with one of the team – we can help you reach your goals quicker and keep you on track.
