10 Things You Can Do Right Now To Finally End Your Financial Worries

Some time ago, I read an article written by J.D. Roth of Get Rich Slowly, a personal finance blog named the ‘Most Inspiring’ money blog in 2008 by Money Magazine.

In the article, J.D. offered some great advice to one of his readers who emailed him to ask for financial advice because she was in serious need of help.

The reader, Kay, said in her email that she’s never developed good financial habits and at 39 years of age, she has no savings (no emergency and retirement funds) and she’s about $28,000 in debt.

Next May, she will lose half of her child support when her son graduates from high school, and the rest the following May when her daughter graduates.

She has a list full of high-priority financial needs, but trying to do everything at once is getting her exactly nowhere. The only thing she’s done so far is cutting up her credit cards.

What would you do if you were in her shoes?

In the comment section, I left my thought about a few things that Kay could consider on top of J.D.’s advice. But first, let’s hear what advice J.D. offered Kay.

Note: This is a curtailed version. If you want to read J.D.’s actual advice, read the full article @ The First Three Steps to Financial Freedom.

J.D. said there’s no one right answer to Kay’s problem and I absolutely agree with that.

In J.D.’s words:

Some choices are better than others, it’s true, but the best way to take control of your finances is to do something. Action beats inaction. Taking any step in the right direction will help Kay move closer to financial stability.

Following that, J.D. advised that there are three things Kay should focus on right now.

Reduce Expenses

As Kay did not mention her expenses in her email, J.D. made the assumption that she’s probably like most people – spending more than she needs in a variety of ways. J.D. advised to cut expenses one at a time to help create a better cash flow, allowing some breathing room.

Focus on one item. Once you’ve trimmed that, look for another. This gets easier with time.

Build Savings

Kay should save the extra money she gets from cutting her expenses for emergencies. It doesn’t really matter how much is the amount. The most important thing is to get into the habit of saving.

Tackle Debt

After reducing expenses and building an emergency fund of $500 or $1000, the third step is to make a spending plan for tackling debt. And if you’re struggling with debt, J.D. highly recommends the debt snowball strategy.

“The debt-snowball method is a debt reduction strategy, whereby one who owes on more than one account pays off the accounts with the smaller balances first, proceeding to the larger ones later.” – Wikipedia

While J.D.’s advice is great, I thought there are a few more things that Kay could do. So I suggested the following in the comment section:

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1. Adopt the Right Mindset

This may not seem to have any direct effect on reducing debt or increasing savings. But truth be told, wealthy people are wealthy because they think very differently, which leads them to adopt very different habits, and take very different actions, thus producing vastly different results.

We have to set our foundation – our mindset – right before we can start tackling anything else in life.

2. Manage Your Money With Multiple Accounts

Personally, I have seven banking accounts. Each account is meant for a different purpose. This strategy helps me to ensure that:

• I’m not spending more than I should
• I’m able to pay my credit card bills on time
• I’m putting enough money aside for rainy days, and
• I have surplus to invest

I’ve written a pretty detailed article about this. Right click on the link/image below and choose ‘Save Target As’ or ‘Save Link As’ to download it.

 

 

3. Use Credit Cards to Your Advantage

Too many people think that credit cards are ‘evil’, but the truth is nothing further away from that.

When credit cards are used properly, they can be very powerful wealth building tool! Because each purchase made on your credit cards will earn you bonus points which you can use to redeem for free products and services, thus saving you more money.

I always use the bonus points to redeem for gas vouchers. This has helped me save a lot on my gas bill.

Just make sure you don’t abuse the use of credit cards and always remember to pay the bill in full every month. Set up a separate account to help you achieve this. I share how I do this in the article linked to above.

4. Track Your Dollar

Start tracking your money so that you know where your money has gone. Tracking your money helps you to gain more control of your money instead of letting your money controls you.

Besides your monthly financial statements, you also have to keep track on a daily basis on each and every one of your expenditures.

Create a log or list and write down in your log/list every one of your expenditures including mortgage, groceries, bills, transport, clothing, etc. And write them down as soon as you get the chance so you don’t fall behind and forget about it.

5. Increase Your Income

Reducing expenses is only part of the equation. The other half to make it complete is to increase your income. Besides finding ways to cut your spending, you also need to find ways to make more money.

But I don’t mean asking your boss for a raise to increase your income, although you could try that. What I’d suggest is to start a home-based business such as an online business (e.g. Blogging) while holding on to your day job. It’s low cost, therefore, low risk.

Who knows? You might be the next J.D. Roth!

6. Grow Your Money

If you’re the kind who seek ’security’ in a job and are not willing to move out of your comfort zone to massively increase your income, then the best, and probably the only choice you have to build a million dollar net worth is to invest your money.

But really, just about anyone, whether you aspire to be a millionaire or not, should invest your money because it is the only way you can put your money to work for you to secure your own financial freedom.

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Now looking back at my own comment, I realize I had missed out one very important piece of the financial freedom puzzle…

Legendary investor Warren Buffett once said, “The most important investment you can make is in yourself.”

Well I guess you can’t argue with one of the smartest and most successful men of our time.

Our mind is indeed the greatest asset we can invest in. No other forms of assets even come close. The potential return we can yield from investing in our mind is virtually unlimited.

Millionaires are rich not because they’re more hardworking, smarter or luckier. They’re rich because they know how to play the game of money and they invest intensively and extensively in their mind, knowledge and skills, especially financial knowledge and skills.

It is now up to you to decide what is best for you, your family, and your future.

I’ve made the decision to invest in myself.

In 2008, I made the decision to sign up for a $3,000 program called Wealth Academy (Singapore) conducted by one of Singapore’s youngest and most prominent self-made millionaires. It is one of the best wealth creation programs I’d ever attended. I would go so far as to say that it turned out to be one of my turning points in life.

Of course, learning wasn’t enough. I had to actually START DOING. And that’s when the shift in my financial situation happened and I was able to quit my job to pursue my passion.

The reason I’m telling you this is because I have a deep desire to share with you the wealth building strategies I’ve learned from Wealth Academy so that you, too, know what you can do to secure your own financial future and personal freedom.

However, it’s not something I want to reveal here, on a public site.

I’ve documented what I’ve learned at Wealth Academy into a 6-Day E-Course totaling over 18,000 words – equivalent to a 60-page book – and you’re getting it FREE today!

In this E-Course, you’ll discover:

To get this E-Course FREE today, all you need to do is enter your first name and your primary email address in the boxes below and hit the “Get Instant Access” button.

The E-Course – Financial Freedom the Millionaire Way – will be sent directly to your email inbox over 6 days.

Wealth doesn’t happen by chance, but by the choices you make.

So unless you never have to worry about money again, if not, I suggest you sign up below now.