We all like to feel as though we are in control. This includes being in control of our finances. If you want to be in charge of your finances, you need to start taking the right steps toward financial freedom. Here are five things you can do to start taking control of your financial future:
1. Think about Your Priorities
Your first step to managing your financial priorities is to figure out what you want to accomplish. Your money is a tool. It can be used to help you enjoy life, and even make your own world a better place. Think about what is most important to you, and figure out what you want your money to do for you in the long-term as well as in the short-term. Once you know what you want to accomplish, you can begin making a plan that helps you reach your goals.
2. Make a Plan
You should have a financial plan to help you accomplish what’s most important to you. Once you have established your priorities, you can then make a plan that helps you spend according to those priorities. Put together a short-term plan, a medium-term plan, and a long-term plan. Each of your plans should complement each other. It should make logical sense, taking you from paying down debt, to saving for retirement, to giving to charity, to even have a little fun.
3. Pay Yourself First
This is one of the most basic rules of personal finance. You should pay yourself first by investing a portion of your income for the future. Contribute to a retirement account, and make sure that you also fund your emergency savings. It’s important to put yourself first when it comes to taking control of your financial future and building up the wealth you need for your preferred future. Pay yourself first, and remember that this will put you ahead of the curve.
4. Diversify You Income
The truth is that you aren’t actually in control of your financial future if you rely too much on one source of income. Consider: Even if you have a good day job, if you are working for someone else, you can get fired. This doesn’t necessarily mean that you have to quit working for “the man” and start your own business. But it does mean that you should consider diversifying your income so that you aren’t relying so heavily on one source. Think about ways to diversify, including starting a side hustle, building an income portfolio, or earning royalties.
5. Use Technology to Stay On Top of Things
Finally, you want to stay on top of things. You can use technology to keep you on top of the situation. There are financial apps that make it possible to monitor your situation, no matter where you are. While you don’t want to be obsessive about it, you should occasionally check you situation and then adjust as needed. You might need to change your debt reduction plan, or adjust your asset allocation in your retirement portfolio. Make sure that you carefully review your situation, and note your progress.