Steps to Financial Freedom

Richard Pullman Steps to Financial Freedom

Financial freedom is the power to do what you will with your life without being
forever bound by lack of money and over burdened by debt. This worthwhile goal
can be achieved by anyone through careful planning and persistence. Just follow
these steps:

• Pay yourself first


• Control your spending


• Get free of debt


• Build a contingency fund


• Become an informed investor


• Give

Achieving financial freedom is a gradual process that will happen as you implement
all these simple steps in your life.

Pay yourself first

Every paycheck, keep some of your money for yourself and keep it. It takes money
to make money, so goes the old saying. To achieve financial freedom, you'll need
some seed money that can grow into a substantial nest egg.

Take a percentage or a fixed amount from each paycheck and add it to your seed
money, at least 10%, if possible. This is your investment money. Do not use
it for anything else. Every paycheck be sure to pay yourself first. With time
and persistence you'll soon have the funds to start making profitable investments.
You'll be a lender and not a borrower. Reinvest all profits and dividends to
maximize the growth of your nest egg.

Control your spending

Make sure that your spending is less than your earnings. When you find yourself
in a hole, the first thing to do is STOP DIGGING. You may have to create and follow
a budget.

Creating a budget is easy; following it may be hard. Start our by tracking
your current spending habits. Visit
www.financesoftware.net for software that
can help you. Summarize your spending into general categories such as Food,
Clothing, Entertainment, etc. Then you can decide which categories you can cut
and by how much. Continue to track your spending and do your best to stay within
the limits you set for yourself.

Get free of debt

Debt is bad, "the borrower is the slave of the lender", and none of us
wants to be a slave. There are some debts that may be helpful, such as business
debts to increase profits, home mortgages, and car loans. Avoid any other
borrowing, even pay cash for your car if possible.

Increase the size of the payments you're making. Pick the creditor who
charges the highest interest and increase that payment by as much as you can.
When that creditor is paid off, take the payment amount and apply it to the
next creditor. Continue this process until all are paid off. Destroy and
close all or most of your credit card accounts.

Build a contingency fund

Life is full of unexpected surprises; the car breaks down, the furnace
fails, we lose our job, etc.. To prevent these occasional events from derailing
your financial plans, you need funds just for emergencies. This will help
you avoid borrowing or dipping into your seed money.

Every paycheck, take a percentage or a fixed amount of money and put it
into your contingency fund. As the money in this fund grows, you will have
the peace of mind that comes from being better prepared for life's little surprises.
For life's big surprises, buy insurance.

Become an informed investor

In this day and age, there are endless opportunities for investments that
can make or lose you money. In order to make money and not lose money, you'll
need to start educating yourself.

As a start, here are some concepts it will be good for you to know. RETURN
is how much profit you're likely to make on a given investment, usually
expressed as a percentage or a range of percentages. RISK is the possibility
of something bad happening, like losing money. A SCAM is a false investment
opportunity presented by lying thieves trying to steal your money. DIVERSIFICATION
is the strategy of not having all your eggs in one basket to spread
and minimize risk. An INVESTMENT STRATEGY is a long term approach to making
money. Visit www.financesoftware.net
for more investment ideas and related software.

Give

Begin to give away some of your money. "For whatsoever a man sows, that
shall he also reap." If you are religious, give to your religion. If you are
not, then give to the poor, or to "save the earth", or whatever noble cause
appeals to you.

Not only does giving help free you from the mental and emotional grip of
money, God Himself will generously respond to more than repay what you have freely
and joyfully given away.

Conclusion

You can make it happen. Establish your strategy and stick to it.
Implement all these steps in your life and your financial freedom will soon come:

• Pay yourself first


• Control your spending


• Get free of debt


• Build a contingency fund


• Become an informed investor


• Give

Now, you're on your way.

Copyright © 2005 Richard Pullman

You have permission to publish this article either electronically or in print,
free of charge, as long as the author bylines are included. A courtesy copy of
your publication would be appreciated. Please email to richard@financesoftware.net
(Word Count 821)

About the Author

Richard Pullman is the webmaster for
www.financesoftware.net
and has a bachelor's degree in finance and economics.