Continuing this series, we go over step 3 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 3 on how to achieve financial freedom is set achievable goals. Now, achievable goals is going to vary, depending on you. We do want to reach high. We want to set goals that make us push ourselves a bit and we want to set goals that get us to where we want to be.
But when we get to step 4, which is make our budget, we’ll realize if we need to scale back some of those goals in step 3, so that we can make them achievable.
So, let’s say you have a goal of, you want to make $1 million by next year. Then we go in to make the budget stage, and you realize there’s no way you can cut your expenses that much and the likelihood of you starting a side hustle that allows you to get to there is just not happening at this point. So, at that point we would want to scale it back.
We want to be realistic. So these goals that we set, we want them to be achievable in the short term, in the long term, whatever the case may be.
Now, we’re moving from step 1, where you’re getting your mind straight and you’re getting your why, why you’re doing this. To step 2, which is tracking your expenses. Now we’re on step 3. We’re setting our goals.
Those are going to be mostly budgetary goals, but they can be beyond that as well. You can make life goals in there. You don’t want to set budgetary goals that hinder the whole rest of the way that you live your life. That’s not what we’re trying to do here. But we are trying to create some guidelines, so that we have some discipline when it comes to making your budget and then sticking to your budget.
So, your goals might be, I want to be able to start saving 10% of my income. I want to be able to set aside 20% of my income. One thing that everybody’s goal needs to be is right off the bat, if you don’t have an emergency fund, I want you to try and get an emergency fund set aside as soon as you can.$1,000 is a good amount to shoot for, everybody should be able to do that as quickly as you can. Get $1,000 set aside in an emergency fund, so that you don’t have that burden of being right on the edge constantly. And, when you start tracking your expenses, and you start figuring out, what can you do without for the next couple of months so that you can build up this emergency fund, that’s going to help you out a lot.
So, make sure that you have that $1,000 emergency fund in your budget. If you’ve already got that emergency fund then let’s work on bigger goals from there.
Now, I’m not here to tell you what your goals are going to be, but ultimately, to get to financial freedom, we’re going to want to have enough money set aside so that we’re not reliant on whatever our employer tells us to do. We have what’s called F.U. money. So we can tell our employer F.U. if we need to.
You may want to have enough money to offset all of your living expenses each month. You may want to have just a nice nest egg that you know is sitting there in retirement. Whatever the case may be, I’m going to leave that up to you, on where to set your goals. Because really, financial freedom is going to be different, what the actual numbers look like, are going to be different for each person.
A lot of it is going to depend on where you are at in life as well. So, if you’re nearing retirement, part of that financial freedom might be having your mortgage paid off. If you’re in your 20’s, part of your financial freedom might be owning a home, but the interest rate is so low you don’t want to have that mortgage paid off. You want to actually be investing that money.
Really, it depends on you, where you’re at in life, but the key here is set some achievable goals. That’s step #3. We’ll be back next time with step #4, which is make a budget.
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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