Here are the top ten tips for financial freedom:
1. Tell the Truth about Money
Since our beliefs are the source of our actions and our actions are the source of our results in life, it makes sense to figure out what your beliefs are about money. Here are some questions to get you thinking (just fill in the blanks and write the first thing that pops into your head)
I believe that money is…..
Financial success means…
If I had all the money I could ever want, then I would be...
My parents taught me that money is….
My greatest problem with money is…
If your beliefs aren’t empowering, go back and write in new beliefs that motivate and inspire you. You made up the beliefs in the first place so you might as well pick some better ones!
2. Be an Instant Billionaire
Play this game: A genie has just this moment popped out of a bottle, handed you a paper and pen and given you two minutes to write down everything you could ever want. If it is on the paper, you can have it! So get writing! Now imagine that you had all this stuff. How would you now feel? (write down the first thing that comes to mind). What gives you this feeling in your life right now? What three changes would you make to experience this feeling regularly in your life? Congratulations! Now you don’t have to be a billionaire to get the same end result.
3. Keep a Spending Log
Rich people know exactly where there money goes and exactly how much they owe and how much they own. They pay careful attention to their money. If you want to be rich, you need to act the way the rich act. The first step is to keep track of every single little thing you spend down to the newspaper or cup of coffee. If you don’t know the truth about your present financial situation, you won’t know what to change. Where does your money go? Keep a spending log for 30 days and then keep it up for a year and you’ll be on your way to success. Write down every single thing you spend for the next 30 days (yes, even that pack of chewing gum or the newspaper). Total up the categories at the end of the month. Observe where and how you are spending your money and reallocate to that which would provide more pleasure! (Quicken is great for keeping track if you have a computer.)
4. Plug the Money Drains
Now that you’ve identified where your money is going, review your expenditures and see if you are happy. Most people are amazed at how much the little expenses (Starbuck coffee habits, etc.) add up quickly. We usually think, what difference does a credit card with an annual fee of $25 make?
It is such a small amount over a year. Especially keep an eye on the "tiny" expenses like the $25 annual credit card fee. If you are 25 today and keep your credit card until you are 85 that adds up to $31,330 (assuming you invested that $25 a year at 8%); if you are 35 today that would add up to $14,344 and if you are 45 today that would be $6,476. Switch to a no fee credit card today, put that same $25 in an investment and see how many thousands you would save. Usually it is the little things that are easiest to change as well!
Most people hang out waiting for the big break, the big deal, the big raise when in reality, it is these little tiny things that make the difference. And, if you did get the big break and didn't have these plugged, guess what?
Plug a few money drains this week!
5. The Money Diet
We live in a culture of instant gratification. If we want something or need something, we buy it. If we don’t have the cash, it goes on credit. As a result, we end up buying a lot of stuff we don’t really need or want. Spending has become a habit. To break the habit, stop spending for 30 days. DO NOT BUY ANYTHING. Try to go grocery shopping once a week and only buy stuff on your list. Do not pick up that extra candy bar or magazine at the check out counter. Make sure you’ve got enough toothpaste and other essentials to get through the month, but if it isn’t essential to your survival, don’t buy it. Instead, write down what you wanted to buy on a 30-day list. If, after 30 days, you still want to buy it, then it is probably a genuine desire. You’ll be amazed at how much you spend on impulse.
Going on a money diet will reconnect you with the simple pleasures of life and you’ll discover the free resources in your community. If you can’t rent a video, you might discover they are available for free from the library or that you could borrow from a friend’s collection and make popcorn at home. If you can’t go out to eat for dinner, you might have your friends around for a fun potluck supper. Not being able to spend can actually be more fun than just going out and buying stuff.
