$ix $teps to $uccess
Begin your journey towards financial freedom with 6 simple steps that will set you up for your future! These steps are not achieved overnight and take discipline, which is why the 1st step is the hardest. It will test your patience and challenge you everyday, but if you stick with our plan it will pay off in the end.
01
Establish Your Emergency Fund
Save, save, save! Every dollar helps! For this step, work towards saving 3-6 months of your current expenses for a safety net against unpredictable events. For some this may be $10,000 and for others it may be $20,000+ depending on location and lifestyle. On average, an amount of $15,000 is generally sufficient. This money should be stored in a savings account (or money market) with no risk of loss in case of an emergency!
02
Set Up Monthly Budget
To move to step 3, it is essential to get your finances in line! The best way to accomplish this is by establishing a monthly budget. This budget includes your after-tax income, expenses, savings, etc. To start, create a budget based on your spending habits from the previous months. Then, try to find areas of improvement and finalize a budget moving forward. For example, you may find that you are spending a lot on out to eat food - try to budget a lower amount and add the difference towards your savings! You may be surprised at how much you spend in certain categories!!
03
Eliminate Most Debt
Now it is time to pay down any debt you have, outside of your mortgage. This includes credit cards, car payments, medical bills, student loans, etc. Debt is the single most detrimental obstacle against financial freedom and holds your money captive! How? The high interest costs from companies that issue the debt accumulates the longer you have the debt outstanding. Not all debt is bad, but in this step it is essential to eliminate MOST of your debt to free up your money!
04
Contribute Towards Retirement
Time to set yourself up for your future! This includes contributing as much as your budget allows towards your retirement accounts (Traditional/Roth 401ks, Traditional/Roth IRAs, etc.). These accounts are an excellent way to contribute towards your future as more often than not companies will "match" your contributions which is essentially "free money" and an initial return on the money you contributed. You also get tax benefits with certain retirement plans!
05
Long-Term Investing
After setting up retirement contributions, it is time to have personal investment accounts for long-term investing and growth! Set up a portfolio that aligns with your risk tolerance and work towards contributing a fixed amount monthly towards your portfolio. These contributions should be established within your monthly budget and remember, every dollar counts!
06
Achieve Financial Freedom
Within time and by following these simple steps you will have an emergency fund, paid off the "bad debt", continually contributing towards your retirement and personal investment accounts, and have a monthly budget that keeps you in line! Stick to your plan and have fun watching your money grow and compound year after year!