Many people dream of being financially independent, but very few actually achieve it. If this is your goal you have to remember that it will not happen on its own. You have to work hard at it and there will be times you feel you are never going to reach it. Part of the secret of success is small steps. We will discuss various things you can do to become financially secure, but don’t think you need to do them all at once. Introduce one thing at a time, and when that becomes the norm, add the next one. Some people will never have financial freedom because they are scared of making changes. Don’t be ones of these people, be ones of the others that does reach this goal. Each step you take will take you nearer to you aim, but it is not something that happens overnight. It will also be easier if you plan how you are going to become financially free, and once you have made the plan, stick to it as much as possible. Clear The Debts The first step towards financial freedom should be getting rid of any debts you have. Imagine how much nicer it would be if your salary belonged to you rather than having to pay credit card bills, bank loans, hp agreements and any other debts you may have. Of course, a mortgage is a bit different and much more long term, but you will clear it quicker than any credit cards if all you ever do is make the minimum payment. Pay just a few pound extra off a credit card and see the outstanding balance start to fall. It is no fun when you pay them say £100 and they add more than £90 in interest. Paying a little extra each month will see the balance drop and at the same time, the amount of interest they charge you. You could take advantage of some of the 6-month free interest deals some credit cards offer, or maybe replace them with a bank loan. This is usually a cheaper option and is for a fixed term. Some people use bank loans to consolidate all their debts, and then they know they have just one monthly payment to make. Once you have cleared your debts you can start to think about the other things you can do to make you financially secure. Start To Save No one would ever suggest that you put most of your salary into savings, but you could start with a small amount each month so that it becomes a habit. In fact, you may be able to manage just £10 a month while you are paying off your debts. You will be surprised how quickly the money grows, and how seeing it grow motivates you to save even more, which is how some people become obsessed by it. Don’t make this mistake of thinking you will start saving at the next payday, as that next payday never comes. You should start saving now and you might be surprised how having some money behind you gives you peace of mind. Savings sitting in a bank account is not going to make you much money as interest rates are so low. You could try some investing though, and there are many ways that investments will give you a better return. Some people wonder why invest in properties, in stocks and shares, in government bonds and many other sorts of investments. People do it to make more money than a bank pays on savings, and as long as you have the professional help you need, investments could make more money for you too. Image source Watch Your Spending You do not need to stop spending altogether but you should be more careful where your money goes. Only buy something if you really need it and avoid impulse buys at all costs. Hopefully, you will not be using the credit cards anymore, so if you want something that is more expensive, you will have to save the money for it. Using all your savings is not a good idea and you should always keep some of it in a separate account as an emergency fund. You can be careful about the amount you spend on clothes, food and entertainments, but you will also have bills to pay that will never go away. That does not mean you cannot reduce them though. Think in terms of your electricity bill. Look around your home and see how many items are left on standby when they are not in use. Each one of those is costing you just under one pound a week. If you have found 4 or 5, that could amount to an extra £50 per quarter on your electric bill. Turn then off!!! Lower the temperature of your heating and hot water by a couple of degrees, and change your lights to LED ones, as they are cheaper to run. If it is not already done, have your loft insulated. It is said that 35% of heat is lost through a loft, and insulating it will keep your home warmer for longer and save you money. Be Prepared To Make Sacrifices Making sacrifices now means you could ensure a more secure financial future for you and your loved ones. If you have to drive your car for a couple of years longer, rather than take out more finance, go a year without a holiday, or not move to a bigger house, in the long run the money you save will enable you to take all the other steps sooner, and bring you closer to the financial freedom you are seeking. Financial freedom is in reachm, you just have to want it enough! ]]>
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