One-Minute Guide to Financial Freedom
With the piles of financial advice out there—some good, some downright ridiculous—it can be easy to wander off track and let the important things go by the wayside. Here’s a one-minute reminder of the keys to true financial peace—a short read to send to a friend or stick to the refrigerator. If you start to veer off track, remember M-O-N-E-Y.
M – Make A Budget
And actually follow it. Everything else hangs on this. Track your spending and make cuts until there’s more money coming in than going out. Cut up your credit cards and introduce them to the nearest dumpster if you can’t use them properly.
If you need help with it, this will help get you on track.
O – Obliterate Your Debt
List all credit card, student loan, mortgage and other debt from lowest to highest amount. Throw everything you’ve got at the first, smallest debt until it’s gone. Then take whatever you were putting towards that debt and roll it into the next one. See how fast you can become debt-free.
N – Nest Egg
You need one. Aim to invest 15 percent of your household income into pre-tax retirement plans. If you have to start small, begin by investing 3-5 percent of your income (or whatever will get your full employer match, if applicable). Then ratchet up your contribution once or twice a year until you hit 15 percent.
E – Emergency Fund
Flat tires, blown transmissions, flooded basements and trips to the emergency room are part of life. It’s not a matter of “if” but “when” they will happen, so be prepared. Begin with a small emergency fund (like $500-$1,000 per person in your household).
Once you’re debt-free, up the ante and set aside six months of expenses. Then you’re covered in the event of a job loss.
Y – You Can’t do This Alone
Money management without God is empty. Pray every step of the way for guidance, and read up on all the free financial advice found in the Bible (try starting with Proverbs). Ask God to show you what true generosity looks like, and then give freely by tithing to your church and donating to causes that are close to God’s heart. Only then will you have true financial peace.
