How to Find Financial Freedom Part 1
Before you can find anything you must first know what you are looking for, and finding financial freedom is no different. When I was in college, many years ago now, I received a free membership to a video rental store. A friend and I took off in the direction that we “thought” we should go. We knew where we wanted to go, but didn’t know where the store was. We drove, and drove, and drove but we never found the place.
Finding financial freedom is much like that; you must know what it is in order to know if you have found it. So what is financial freedom? A street reporter asking that question would get many different answers. Therefore, let’s start with just the concept of freedom. William Wallace from the movie Braveheart would say that freedom is giving up your life for something or someone else. Others would say that freedom is living a life not needing anyone or anything. And still others would say that freedom is living free from oppression and communism.
As you can see there are many different definitions – and you must find your own. Most would agree that finding financial freedom can be defined as, “Being free from financial bondage and being able to pay all the monthly bills while at the same time saving something for the future.”
The Five phases of Finding Financial Freedom:
- Discovery Phase
The first step in the discovery phase is setting financial goals. This is discovering what you want to accomplish – your road map. Once again, if you don’t know where you are going then how will you know when you get there? The second step is to begin seeing the real issues. In other words, discovering what is happening in your financial life right now. To do this you should make a list of your assets, current household expenses, and current short-term and long-term debts. Knowing where you are will help you get to where you want to be.
- Tracking Phase
In the tracking phase you begin to do just that – track what you are spending. Actually, you begin tracking all income and spending – this will tell you just what is happening, no lying to yourself here. You do this by developing a spending plan. This may sound to basic but I will assure you that if you begin tracking your income and spending you will be well on the road to finding financial freedom.
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