The first thing you need to know is this: if you are making financial planning decisions based on how much money is in the bank right now, then you are being controlled by the money, and this usually creates a constant worry about money problems. You need to control the money to gain financial freedom; not the other way around!
7 steps to gain financial freedom
Accurately predict how much money is needed to get by this week and in the future.
Figure out exactly what you spent every week, every month. The correct definition of budget here is: the amount of money it takes for you to function and to attain your goals. This is what we call the break even point and it tells you the minimum amount of income required just to stay afloat.
Figure out how to collect the amount of income needed, and more, to do better than just break even. Remember, you’re going after YOUR financial freedom here.
Find out exactly how much you owe in bills and other debts. This is very important, because the things you don’t know can undermine your profit and wealth building progress.
Find out how much of your income is actually available to spend. Most people forget that when the money comes in, some of it is already committed. When you spend more than you brought in, the difference usually ends up on a credit card as debt. When you are striving for financial independence, spending less than you make is critical!
Set aside regular amounts of cash from your income for the future – always pay yourself first and put the money in savings toward gaining financial freedom. For substantial wealth building, a minimum of 10% is recommended.
Portion out some of your money toward paying past-due bills, debt, current bills, and then portion out a bit for future large expenses that are difficult to pay when they come due. Careful, consistent money management can speed up your business wealth building progress.
Use any money left over in ways that increase your ability to produce more income. Why is cash flow management important to a business owner? Your cash flow is the energy and life blood of a business. It is necessary to pump it through the income producing areas to keep it running well. Everything runs smoother when cash is available. Trust me, I know! I learned it the hard way.
Seems simple, right? And it is simple. This steps are easily learned. To get to the point of financial freedom does, however, take personal discipline and commitment , but ones you get to that point, you never have to worry about money again.
To use your money wisely, you need to treat it as a resource.