Saving Money for Financial Freedom
By: Ashley Cairns
When it comes to saving money today, it can be hard to make your finances line up with the facts. You will likely find that you are, somewhere along the line, spending an excess of money that you could otherwise be avoiding. I know how hard it can be to manage budgeting consistently. All it takes is one week of variance and you can soon fall back into bad habits. To help you work towards financial freedom, though, the following tips are recommended to help you make genuine, lasting progress.
Start small, save up a sum
I think the best thing to do when budgeting is to start small and humble. For example, say you are going to put away $25 a week. In four weeks, that is $100. OK, $100 can be gone in an instant, but it is something. It is more than you have saved on previous budgeting, right?
Budgeting is tough, as is saving money when you don’t have lots to throw around. This, though, is a small but important start. Once you get into the habit of saving, it becomes a more considered part of your culture.
Focus on your debts
If you are serious about long-term financial freedom, then you should build up a list of all of your debts. Focus on paying the smallest amount you can for each debt, whilst focusing on one debt (often the smallest) at a time. Do this, and slowly but surely you will start to chip away at those debts and leave yourself with one less monthly payment to manage moving forward.
Sign up for a 401k
Presuming you are in a country that offers a 401k, I recommend investing in one ASAP. These are some of the best investments that you could make for a long-term savings plan. The earlier you can start saving money to put into this, the better. Perhaps that $25/week you were putting away could instead be put towards your 401k (or the equivalent of a 401k where you are living) to help it go even further?
Invest in the right protection
Many of us carry all manner of direct debts for weird insurances and services that we do not even need. Instead, whittle down your protections to what you need; home, personal health, disability insurance, and vehicle insurance. Once you have the ‘key’ forms of insurance, you can add more situational protection as your financial status changes and you begin to have more income to throw around.
Make the tough choice
While we all have a vice or a product/service we enjoy, we often know it is either bad for us or is costing us too much. If you are serious about budgeting then the single best thing you can do is make the tough choice and cut it out. I know that it can be tough, but it is an essential part of decision making that benefits you in the long-term.
Is budgeting easy? No, not at all. It is, though, something that is needed if you wish to get full control of your finances once again. Focus on the above five plans, though, and saving money can become a more realistic goal.