Continuing this series, we go over step 2 of how to achieve financial freedom. What is your motivation for seeking financial freedom and learning how to control your finances?
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Hey folks, step 2 on reaching financial freedom is to track your expenses. In step 1, we talked about getting your mind straight for this journey toward financial freedom. You need to want this, identify your why – your motivation, because you’re going to need it again and again.
Now, step 2 is track your expenses. Step three is set achievable goals. And step 4 is make a budget.
Now, we’re only going to go over step 2 here, but all three of those steps are so connected I wanted to touch on them here briefly.
First, we track our expenses so that we realize where we’re at right now.
Then, we set achievable goals based on where we want to be and the path to get there.
Then we make a forward looking budget to meet these goals.
Now, let’s get back to step 2. Tracking your expenses. It’s so easy these days for them to get out of hand. The only way for us to regain control is to know them and track them, so you can figure out how to eliminate them efficiently. Not all of them, of course. Just the ones dragging on your way to financial freedom.
Now, there’s a few ways you can start tracking them. You can write them down old school. You can use an app or create a spreadsheet to track them manually, or you can use a program or app to automate them, automatically pulling them from your banks, credit cards, and lenders.
Now, my preference is to automate everything that I can, but really any of those methods will work.
Just to briefly touch on a few of the automated options. Three of them I’m a little bit familiar with are Mint, Personal Capital, and YNAB (YouNeedaBudget.com)
Now, the problem with some of the automated ones is that often times there’s problems syncing with certain banks or credit cards or lenders. I’ve tried Mint and Personal Capital, those are the free ones, and I’ve had a little bit better luck with Mint, actually I’ve had quite a bit better luck with Mint, because with Personal Capital I’ve had a number of things that don’t sync up with that, that I was at least able to get on there with Mint, even though there is still some syncing problems. But it’s worked out well enough that I think I’m going to be able to make it work.
I do plan to try YNAB. I’ve heard really good things about it, but it’s not free. So trying that one out has been a little bit delayed so far.
Now it’s your turn, figure out what you want to try. You got Mint.com, Personal Capital, and YNAB and a whole host of other options out there that I didn’t even touch on because I haven’t tried them out. But, go check them out, figure out what’s going to work for you and start to track your expenses.
Then look for our next video, step 3 on how to reach financial freedom.
I really want to thank you for joining us today. It’s our hope to help you take control of your finances, maximize your cash flow, and reach financial freedom.
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If you have any questions or comments, join us in the conversation below, and be sure to let us know what financial freedom means to you.
Now, go maximize your cash flow!
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