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Do you have a financial plan?

Updated

Somewhere in the mix of trying to save money on our family’s everyday expenses with couponing and budgeting.. I thought to myself, “what is our plan?” I realized that I wanted MORE than just saving on our groceries every week. I kind of became obsessed with managing our money… I grew a serious love for it. Will we continue to work well into our 60’s and 70’s trying to make ends meet? Will I still have the energy to work a full time job and provide? I honestly gave it no thought before.. and suddenly the reality hit me like a ton of bricks. What was our plan?

It’s been 3 years since I started taking that conversation with myself seriously.

For some people, this is simple about becoming debt free.  For others it is about owning your own business and being independent in all areas.  Financial freedom comes in many forms with many ways of achieving it. I hope to give you a sturdy method of achieving your goals in a realistic manner.

Do you simply want to get out of debt?

Focus on needs versus wants, all while you are making investments for the future that will leave you in a safe and secure debt free place.  Getting out of debt isn’t always the financial freedom some think of, but it is the first place to begin if you aren’t debt free already.

Things to consider when setting your goals to get out of debt:

  • Give yourself realistic time frames to complete your goals.  Don’t rush yourself.
  • Focus on paying down existing balances, and not creating new debt (car, home, credit cards).
  • Rethink your financial lifestyle, and how you spend money on a daily basis.
  • Remove unnecessary expenses by eliminating wants and focusing on needs.
  • Stick to a useful household budget to help keep yourself in check and accountable.

Are you working toward an early retirement?

If your goal is simply to have an early or better than average retirement.. Getting your finances in order now will help make that future goal not just a dream, but reality. This is one of our 15 year goals. We are investing 50% off our income at the moment and want to retire before 47. It is completely doable for us at the moment and we plan to continue securing our financial freedom.

Things to consider when setting goals for your retirement:

  • Research what you truly need to have financially.  Look at long term financial changes, and make sure you will allow yourself extra fund for inflation and emergencies.
  • Be realistic in your early retirement goals.  Give yourself a 10-15 year time frame, instead of 5-7.
  • Accept that future financial security may mean temporary financial drought now.  This means you may have to sacrifice wants now to secure your needs for later.

Do you want to work for yourself and not “the man?

For many individuals the concept of financial freedom starts with no longer being dependent on another person for their financial security.  This would entail being able to work for yourself, build your own business or simply making wise investments that allow you to live within your means without worrying about where your paycheck is coming from.  This is one of the most common financial freedom goals individuals will have.

We have found freedom in owning a business and providing for ourselves. It has been a freeing journey but challenging at the same time:

Things to consider when setting goals for work independence:

  • Research quality business that won’t disappear overnight.
  • Invest in your education to further your work opportunities.
  • Be realistic in what you will need to be truly independent.  Not just the paycheck amount each week, but things like taxes, insurance, backup for times of poor business and more are important to consider.

 So, have you answered the question of what your financial goals are?

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  • Ana says:

    My husband and I are good at being debt free, but we are looking to buy a house and I’m feeling nauseous thinking about the percentage of our income that will go to housing. We are both very conservative when spending, but with the current housing market, it seems impossible to spend our ideal 25% on a mortgage payment. Saving 50% of our current income sounds awesome, but I feel so discouraged with how expensive houses are :/

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