PERSONAL FINANCE

ACHIEVE THE DREAM OF FINANCIAL FREEDOM

Article by Satrix Investments

12 simple tips to help you get there

Financial freedom describes the ‘comfortable’ state of an individual when they have enough money to cover all their basic needs such as a house, car, clothing, food, medical insurance; and can provide for their family and live a happy comfortable life, without falling into unmanageable debt, feeling stressed and unable to cope.

1) START NOW

Like all good things, financial freedom may take time to achieve. It could take two to three years to regain control of your money. This may be hard work and will involve focus and dedication, so the sooner you start to sort your finances out the better. The first and obvious step is a monthly budget.

2) HAVE FINANCIAL GOALS

What is your personal idea of financial freedom? Retiring at 40? Being free from bond payments, car payments, and the constant stream of bills? Or simply being able to sleep soundly at night, knowing that you can cover any debts?

3) SPEND LESS THAN YOU EARN

Invest the rest. It sounds obvious but so many people forget this one golden rule. So simple. And yet so hard to achieve. To begin, look at Rule 1.

4) GET RID OF DEBT

Debt is not cool. Basically, you are paying someone else to rent their money so that you can spend it. Credit cards, store accounts and personal loans are the most expensive forms of debt. A house bond and car payments are necessary to live, but can only work if you can afford the monthly payments. Aim to pay these kind of debts off as soon as you can.

5) KEEP AN EMERGENCY FUND

You never know when you will need that extra R2 000 – for car repairs, your child’s doctor’s bills, a broken washing machine. Emergencies are just that, so you need to have a modest stash for such an eventuality.

6) PAY YOURSELF FIRST

This is the anthem of the wealthy. Save or invest a percentage of money each month before you pay the bills. Try for a figure of 15% of your total income if you can manage that. The larger the sum, the better.

7) SHARE YOUR FINANCES WITH YOUR PARTNER

Stop being so secretive. Have regular talks about money and finances with your partner and work together as a team. If you pool resources then you have more leverage as well as someone to keep you honest when the sweet song of the mall comes calling.

8) MANAGE YOUR INVESTMENTS PROPERLY

Manage your investments properly. Work towards a balanced portfolio of investments – don’t put all your eggs in one basket. Have long-and short-term, low- and high-risk savings and investments. Don’t forget your retirement accounts. If you’re overwhelmed by this, find a financial adviser. They can help you.

9) RETIREMENT IS YOUR MOST IMPORTANT SAVINGS GOAL

Retirement is your most important savings goal. Put the maximum into your company retirement plan and don’t take any out until after you retire. If you’re self employed investigate a retirement plan.

10) BE RESPONSIBLE

You and you alone have to take full responsibility for your money and financial affairs. It is so easy to blame others for any setbacks, but remember who it is who hands over the card or the cash. That’s the same person who can stop the spending.

11) LOOK AFTER YOURSELF

You and you alone have to take full responsibility for your money and financial affairs. It is so easy to blame others for any setbacks, but remember who it is who hands over the card or the cash. That’s the same person who can stop the spending.

12) BE HAPPY

Becoming financially free doesn’t mean anything if you’re unhappy. You can have all of the money in the world but if you are miserable, then it will not bring you happiness. Find out what feeds you. That will be the thing that makes you happy.

POSTED : 8 DECEMBER 2016

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