Seven steps to Financial Freedom!
Tuesday, March 3rd, 2009You can improve your future (often very quickly) when you begin replacing choices that don’t lead to success with ones that do. In other words, you can’t keep doing the same things that lead to failure and expect good results (at least good on a consistent basis). If you decide to become financially secure, then you must be intentional about developing a plan and you must begin TODAY!
Financial author and radio personality Dave Ramsey says, “The normal American way to live is flat broke. Don’t be normal.”
Great advice. To prove his point, the US Department of Commerce released a study last month that said the nation’s savings rate for 2006 was negative 1%. In other words, for every $1 Americans earned, they spent $1.01. Households can only go a short while living like this before they’re swallowed in debt.
So don’t be normal. The first step in financial “abnormality,” after saving $1,000 in the bank for emergencies, is to have a zero balance on all credit cards. This not only saves you from having to pay astronomical interest, but teaches you delayed gratification, one of the greatest lessons you can teach your family. Here are the seven steps to Financial Freedom
Step One: ASAP – save $1,000 – $2500 in your “Beginner Emergency Fund”.
($500 if annual income is less than $20k)
Step Two: Pay off your debt (except your home), and do it quickly!
Step Three: Build up your Emergency Fund to 3-6 months of living expenses in
savings. Sound impossible? It’s not!
Step Four: Invest 15% of your household income into tax-deferred and tax-exempt
savings. And do it without getting bogged down trying to understand the endless alphabet-soup of IRAs, Roth IRAs, 401(k)s, 403(b)s, TSPs, TRSs etc.
Step Five: Fund your children’s college tuition. You’ll need to navigate the maze of educational savings plans (ESAs, 529s, etc) and which is right for you
Step Six: Pay off your home early (Yes, within the next 10 years or less!)
Step Seven: Build Wealth, Give and Change Someone’s Life!
(Mutual Funds/Real Estate/etc.)
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I definitely need this section..As I told you in a previous meeting…my wife and I are taking progressive steps to glorify God more in this area of our lives.
Great advice! Keep at it, even if steps 1-6 look difficult- and they can be- they help to keep you focused on the things of God rather than this world. Step 7 is most rewarding when you can change lives and impact the world for God’s Kingdom and glory…that’s financial freedom.
Our church is teaching Financial Peace University by Dave Ramsey. They are in their 2nd year of teaching these things! We took it this past fall and it was amazing! Dave is such a fun teacher and really it has helped us out tremendously!