Plan for your financial freedom
To attain financial freedom, it is imperative to take simple steps and practice patience along the way. Congratulate yourself on having taken the first two steps:
- Step 1: Envision a financial future of freedom by formulating a financial vision and identifying specific financial goals.
- Step 2: Assess your current financial situation through tracking your income (what you earn) and expenses (what you spend) each month.
Now that you have a better idea of your current financial situation, it is time to take control of your money and tell every cent where to go each month. By doing this, you design a plan to achieve financial freedom!
A simple way to design this plan is to use the information you garnered from tracking your income and expenses to estimate your future income and expenses each month. Evaluate each actual line item and identify where you are spending, how much you are spending, and where you can make adjustments to achieve your financial goals.
Based on your evaluation, you may need to eliminate line items that no longer accommodate your financial goals or decrease line items that were once overstated/overspent. Instead of just spending each month frivolously, purposely tell your money where to go each month. Be sure that you assign every dollar to a particular line item.
You are now in charge of your financial destiny.
Here is an example of a monthly financial plan:
Your monthly expenses and sometimes your income will differ from month to month. Design a financial plan for each month using an excel spreadsheet, a notebook, or an online budgeting tool. Use the tool with which you are most comfortable.
This is your plan; therefore, do not be afraid to adjust your plan throughout the month. Design a plan that is realistic, attainable and sustainable. Be sure to exercise patience because this process will take about three months to master.
Initially, this method may be tedious; however, it is imperative to have a plan to build a strong financial foundation. The Bible reminds us of the importance of planning in Luke 14:28-30 “Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it? For if you lay the foundation and are not able to finish it, everyone who sees it will ridicule you, saying, ‘This person began to build and wasn’t able to finish.’”
A strong financial plan helps you spend less than you earn and own more than you owe, ultimately achieving financial freedom!
Let us continue our journey.
Celebrate! We are on our way to attaining financial freedom by taking simple steps!
Do this for next time:
Reflect on these questions:
How much does it cost you to operate your home each month?
If you have an emergency, can you afford to take care of it?