10 Savvy Financial Steps – A Blueprint for Your Financial Life
Congratulations on taking the first step in taking control of your finances! Following the 10 steps provided is a great way to ensure financial security, peace of mind, and to be more intentional with your finances.
To make sure you're successful in sticking to your plan, it's important to be realistic and create small, attainable goals that can easily be monitored. Tracking your progress and celebrating milestones is a great way to stay motivated and keep on track. Additionally, it's important to remain patient and understand that financial freedom and security will take time and there will likely be bumps in the road.
Make sure to stay dedicated and focused, and if you ever need help, don't be afraid to reach out for financial coaching or to another financial professional to get help.
Learning to be financially savvy is key to achieving financial freedom and security. These 10 steps serve as a "general blueprint" or your financial life that will help you to manage your money in a more intentional way.
Good luck and have fun on your journey to financial independence!
STEP 1 – STOP!!! Stop spending, all investing, and retirement savings. If you are in consumer debt (everything other than a mortgage) STOP all discretionary spending and STOP all investing and retirement saving in order to free up cash to get out of debt as fast as possible.
STEP 2 – BUILD a spending plan (budget) to live by for each month. This will help you stay within your means and ensure that you are using your resources wisely. A solid monthly spending plan will help break living from paycheck-to-paycheck cycle.
STEP 3 – ESTABLISH a starter Emergency Fund of $1,000. This will give you a cushion in case of an unexpected expense or emergency.
STEP 4 – GET out of all Consumer Debt (except for your house). Use a debt payoff method like the debt snowball (or other methods) to eliminate your debt. This will help you pay off your debt faster and free up your money for other investments.
STEP 5 – SAVE up to 6 months living expenses for your Emergency Fund. This will give you a financial safety net if you find yourself in a difficult situation, job loss, or emergency for a short period of time.
STEP 6 – SAVE a minimum of 15% (up to 20%+) for Retirement & Investing. This will help you build a secure financial future while investing and benefiting from compounding over time. Max out your available Roth or 401K employer savings account and if you still have more begin investing through a brokerage account.
STEP 7 – ESTABLISH and save toward College Fund (or other identified goals).
STEP 8 – WORK to pay off Mortgage early. This will help you become debt-free faster and have more money to put toward other investments.
STEP 9 – BUILD wealth consistently over time and prepare for Financial Independence/Financial Freedom (FIRE).
STEP 10 – GIVE generously and plan your legacy. Build a culture of generosity while also planning your wealth is passed on to future generations.
By following these 10 Savvy Financial Steps, you can take control of your finances, be more intentional, and create a solid financial future.
(These steps were consolidated and adapted from previous articles/books by L. Burkett, R. Blue, and D. Ramsey.)