Unexpected events can happen in your life as job layoff. Then you have to face the truth. How long can you survive financially? How many days, months or years can you live at your current standard of living without having to worry about money?
What is your wealth number if you stop working today? You can calculate your wealth number as follows (savings and investments)/monthly expenses.
Your wealth number
Start to overcome all obstacles as fear, worry and other negative emotions in your finances. Take control of your finances and change your attitude about numbers. Take a look at your wealth number to understand where you are.
The wealth number is realistic and it tells you exactly where you stand financially today. If the number is 2 means that you can survive without paychecks for two months or less. If you have a negative number means that you are spending more money every month than what is coming in.
Your goal must be to increase your wealth number. First you have to spend less than you earn. Save and invest the difference. Are you spending less than you earn? If not, write your weekly spending in a journal. Analyze your spending. Keep tracking your spending and improving your buying decisions. Analyze where you can cut some expenses.
Great ideas to take control of your finances
Here are some ideas to cut off expenses. Get rid of your cell phone or use a prepaid cell phone, instead of an expensive phone with an expensive contract. If you carry a balance on a credit card, ask your credit card company to lower your rate or transfer your debt to a card with a much lower rate.
Cancel something you are not using as club memberships, gym memberships and unread magazine subscriptions. Doing this not only saves you money, it makes room for new things in your life that will serve you better.
Review your insurance policies to make sure they still meet your needs. If you overbought, you are losing money every month on something you do not need. Use cost comparison websites to see if you are getting the best insurance deal.
Find out if you are getting the best interest rate possible on your savings account. When you are going to buy food make a list. Make a list of everything you spend money on. Everything. Why? Because you need to know where your money goes.
Every EUR you have, you have the power to choose your financial future: to be rich, poor, or middle class. Your spending habits reflect who you are and what you value. Poor people have poor spending habits. Rich people have rich spending habits. Understand the power of choice and know how to make good financial decisions.
Automatically save 10% of all income in a long term savings account. Additionally you have to pay yourself first. Put aside 10% of your paycheck or each payment you receive from other sources (vacation allowance, bonuses).
You deposit that amount in your financial freedom account. Once your money goes to the financial freedom account, you NEVER take the money out until you are ready to invest the amount.
Take actions to improve your financial situation
If you are not happy with your wealth number start taking actions today to improve your financial situation. The number is not right or wrong. The number only indicates where you are financially today. The most important thing is that you know where you are and you take actions and change your financial situation.
Awareness is the first step to improve your financial life. The ideal wealth number is infinite, endless. Infinite wealth means that you can support your current standard of living whether you work or not.
To become financially free you have to determine what your infinite wealth number goal is. Have a clear vision. Get clarity about your financial goals. What is the monthly amount of money you need passively to support your current standard of living? What are your reasons why? Why is this vision important to you?
What knowledge do you need to get you there? How are you going to acquire the knowledge? Finally you have to apply what you learn. Take actions to your financial goals on a daily basis. Read, visualize, make a budget and make a financial plan.
Visualize your life 10, 5, 2, 1, half year from now, three months and one month from now. What immediate action steps do you need to take to achieve your one month vision? Make a list of everything you can think of that you are going to have to do to achieve your goals. As you think of new items, add them to your list.
Organize the items on your action list into an action plan by placing them in the proper sequence and priority. Take action immediately on the most important thing you can do on your action plan. This is very important!
Do something every day that moves you toward the attainment of one or more of your important goals. Maintain the momentum! It’s simple. Yes! Not easy, but worth it!
For your financial success!