FINANCIAL FREEDOM COMMUNITY

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1.Taking stock of your financial situation
The first step on the way to financial freedom is to take stock of your current situation. This is important because you need to know where you are, to be able to make a plan of where you are going to go.  

Keep it simple. You  need to write down everything you owe and everything you own.

Write down:
1. Your net income per month
2. Your savings per month
3. Amount available to manage expenses per month.
4. All your assets
5. All your liabilities
6. Calculating your net worth 

Personal Information Folder

Worth mention here is also the importance of having a total overview of your personal information, all legal documents, account numbers and other information that is vital to your financial health. Let the people closest to you know where they can find this information if something were to happen to you. Make an overview of this in a separate document.

The document should include:

1. Your full name, date of birth, and Social Security number (if applicable)
2. The names and contact information of your lawyer, accountant, broker,
    insurance agent, and other important people that you have had regular
    contact with (ex: government officials)
3. A list of all account numbers (bank, brokerage),lockers, credit card numbers,
    list of other investments and any identifying numbers and contact information
    that is related to your finances.
4.The document should say where all key documents can be found. That are
   documents like insurance policies, trust documents, your will, landlord-tenant
   contract or real estate contract and any other legal form or contract that are
   important.

If you get this far you will already feel in control of your own financial situation, and it is easier to proceed. 

2. Setting And Achieving Goals


You  need to make a list of goals that you would like to achieve.


The best way is to write down the financial goals in a list of priorities that are the most important and necessary to you.  


Then you need to make a list of your desires.  Beware! some times  personal motivation for some short term desires are very strong.You and your  family need to reduce these short term desires to optimize on your satisfaction index.


How to achieve goals?


You will need to make a clear plan of how to get where you want to. The financial plan needs to be broken down into realistic achievable intermediate goals with clear deadlines. These have to be related to your savings plan.
If savings are not adequate you need to look at where you are going to cut your expenses. ----------

 

What can you live without?
Do you subscribe to magazines or newspapers that you do not need?
Do you have memberships that you do not use?
Is your rent or mortgage very high?
Are you spending a lot of money on driving where you do not need to go?
Do you rather eat out than cook at home?
Do you pay too much for electricity, telephone, Internet connection and TV?
Do you have the best deals for credit card, insurance, rent or mortgage and bank accounts ?


The purpose of asking these questions is that you should not settle with what you have now. Decide to do whatever it takes to improve your financial situation..


Write down both the long term goals and the short term goals and what you will do to achieve them.

You need to then set aside  the amount of money you are going to save each time you get your pay check. 

3. Action, Monitoring and Evaluation


Making the plan and getting the overview of your current financial situation is not enough. You need to put the plan into action and follow it up and evaluate it as you go along.


Many things can influence the plan after it has been put into action. May be your job situation changes, maybe the overall economic situation changes in your country( like higher interest rates). Maybe the oil and gas price keeps changing. Maybe your investments suddenly lose all their value!


You cannot plan for all of these things, and if you could your life probably would be extremely boring. It is a bit of the beauty that life changes. You need to be able to change your plan accordingly, so that you can still achieve your goals.


Remember that all your efforts in the direction of Financial Freedom are going to benefit you,provided you invest your savings correctly.


You need to learn to be smart, and that means sticking with your plan. If you see that the plan is no longer practical you adjust it. Do not drop the plan. You might be tempted to drop it if it does not work out as you planned, 
Use all your passion and persistence in implementing your plan, Monitor and evaluate your plan regularly. Keep a record of all the small short term goals that you have set and achieved. That is a great motivator.