5 Tips to set your path to financial freedom

Ok so a few days ago a friend of mine was telling me about a concern she had, this was her financial status, she told me that she was extremely frustrated with her financial freedom, she didn’t seem to have any, all her money just seem to disappear or in her own words “my hands are always under a fan, the money blows away.” There are a lot of people just like my friend living here in St. Vincent and the Grenadines and around the world I may add who thinks they can’t achieve financial freedom, and they can’t be any more wrong. As a small business accountant who has had opportunities to advise small business owners on ways they can save finance, I was able to put together 5 financial tips that can set your path to financial freedom.

1) Build a budget

Even if you had the luxury of walking on money like your last name was Trump or Gates, let’s face it, without budgeting your financial status can quickly fall to MC Hammer broke within months. So building a budget should be first on your agenda. I came up with two ways of doing this The first one is called the 50, 30, 20 rule. This is where your salary is organized where 50% is your responsibilities, 30% is for activity and 20% is savings, or for Christians such as myself it’s will be the 40, 30, 20, 10 rule. 40% for responsibilities, 30% for Activities, 20% savings and 10% tithing.

The second is a more detailed method, this is where you list all your utilities and place a limited amount you intend to spend.

For example

Salary $600 per month

Tithing (10%) = $ 60

Savings (20%) = $120

Electricity = $100

Water = $ 50

Food = $200

Activity = $ 70

2) Spend less and invest more

There are two ways you can spend less and invest more and that is time and finance however I will only be talking about finance. Simply put a rich person always invest their money, they are constantly looking at the most effective way to shop, which includes what investments will give them a financial increase, this is call (building assets). The landscape of their homes and their building structures are usually up to date to keep the property’s value on a rise. This is all examples of investing. A struggling person on the other hand always has room for spending on things that doesn’t add value, and on things they just want and not necessarily need such as a $200 shoes. They are more focus on filling their homes with decoration than on the improvement of the house or landscape, and in some cases cause the property’s value to degrade. An unpopular quote I once read said “The difference between the rich and the poor is not how much you make but how much you save.”And they couldn’t be more right, in conclusion the rich spends less, saves more and gain from the little they spend, while the strugglers spends more than they earn, saves little to nothing and complains about the little they have.

3) Manage your utilities and resources

Create a utility use plan; for example if you wash using a machine try limiting it to once a week or even once every two week if possible, this can drastically decrease the amount you have to spend on water and electricity, or even ironing once a week by picking a day that all work and school uniforms can be done. Use energy saving appliances and blubs etc. always remember if it creates high heat then it also can create a high electric bill, be sure to enquire about the appliances you want to buy before doing so, find out if its energy sufficient. Same goes with other utilities such as landlines or purchasing phone credits be sure to create plans for them as this can often become a source of over spending, find the best rates or plans offered by your telecommunication service provider.

4) Have multiple sources of Income

The famous quote “Do not put all your eggs in one basket” is not just some folk tale. Seriously there is a limit to how much you can milk from one income Source and you won’t be too happy if that basket had to drop, losing your only source of income can be the greatest nightmare a person faces especially for a young adult just beginning life. A financially free person has multiple income Sources wither its by working multiple jobs or by having a side business or even multiple businesses, as long as there is more than one source to fill your well.

5) Discipline

According to the Cambridge English Dictionary. To be discipline means; the ability to control yourself or other people, even in difficulties. Without Discipline beginning any of the tips given above will make no sense, following the four tips given takes a lot of dedication and hard work and can only show results if stuck to. It has been proven that people who are well discipline are ten times more successful than people who aren’t. Therefore if you want to be successful then good old discipline will need to be developed.

So there you go 5 financial tips that can set your path to financial freedom, to recap

Tip 1) Build a budget

Tip 2) Spend Less Invest more

Tip 3) Manage your utilities and recourses

Tip 4) Have multiple sources of Income

And Last but not least Tip 5) Good old discipline.

I must say that though sounds easy these tips can be difficult, just keep in mind that there are no dreams that has ever been accomplished easy or as the famous saying “Rome wasn’t built in one day.” This is going to take a lot of time and practice believe me, I’m still practicing myself, but as you devote your unrelenting efforts to applying these tips, financial worries will become less, and you will begin to see the fruits of your performance. If there are any questions, concerns that you may need me to address regarding home or business finance please feel free to email me at accservices.cv@gmail.com.

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