Financial freedom is a tough goal, especially if you have children and loved ones asking to borrow money at every turn. However, independence from the stress of living paycheck to paycheck is easier than one might think. It all starts with small changes that can be done right away. These changes will free you up to save more, invest, and grow your wealth to provide for your family far longer than the two weeks your paycheck provides.
Create a Budget
While this first step sounds like a given. It can be difficult to gather the family together and discuss where the family’s money goes every month. It may help to buy a small whiteboard, or use your tablet, for taking notes. Ask everyone what they spend their money on. This will help you establish a budget for the first month and beyond. Have a plan to track every dollar you all spend for the first month, with a plan to regroup at the end of the month and determine your success and plan for the next month.
Determine Wants and Needs
As part of this planning session, ask what your family spends their money on and whether they determine specific purchases as a want or a need. There are clear needs, like mortgage/rent, groceries and basic utilities. However, what about your morning coffee? If you’re a Starbucks regular, you could be spending around $100 a month on just that. It might be time to brew your own coffee. Sacrifices will be made. Yet, they are made so you can enjoy your wealth in the long term.
Trim Any Monthly Recurring Costs
Most people would agree that extra utilities like a cell phone bill, internet and cable are actual necessities these days. You may not be able to do without these things altogether, but why not cut the money flowing out of your account. The average cable bill is around $80 per month. Surely, at this point a $10 streaming service would suffice and keep the kids from fighting too much without any TV service. For the internet bill, call your service and ask about any specials they have for new members and ask for that, with some authority. The squeaky wheel typically gets the grease when customer service is involved.
Avoid Your Impulses
The monthly family meeting and having a goal in sight can quickly be forgotten when you see a great deal on Amazon. It’s best to remove the temptation for yourself and take retail sites off your daily browsing habit. You’ll be less likely to spend money on things you don’t need. A big money saver would be to buy budget-allotted groceries. Knowing that you have food at home that will spoil unless you eat it, will stop you from picking up fast food on the way home from work just because it sounds delicious at the time.
Give Yourself a Weekly Allowance
Think of this like a cheat day when you’re on a diet. There always needs to be some sort of reward for saving your money, Though, instead of using a debit card, take out cash and give everyone a small share for a luxury of their choice. It will make everyone think more carefully before they spend it and make them treasure it more.
Once you’ve developed smart habits in your family, there are more steps that will lead to greater success in the long run. With a balanced budget, find a strategy that works for you.
As you think about your plan, we invite you to take 2 minutes to sign up for a FREE, extensive eCourse called Infinite 101®. You’ll receive access to video tutorials, articles, and podcasts. It literally costs you nothing to become educated on this ideal financial strategy and start building wealth.