With 2016 now upon us, there is no better time for entrepreneurs to start re-organizing their finances and developing a game plan to reach their goals this year. If you are struggling to gain financial freedom then now is the best time possible to make some changes that will carry you through the New Year. Here are eight easy and effective tips that any person can consider in order to reach a state of financial independence in the coming year.
1. Start Saving 10-15% of What You Earn
Saving can be a very difficult task for any individual, but if you start getting in the habit of saving, it can only help you in the long run. A great rule of thumb is to start saving between 10-15% of what you earn. You can do this on a weekly or a monthly basis. If you find the process of physically moving money into your savings account to be difficult, start setting up automatic withdrawals so you put money into savings before you can even touch it.
2. Pay off Your Credit Cards in Full Each Month
Credit card debt can be a big hole to get out of. Start paying off your credit cards in full every month. This will not only give you financial independence from debt, but it will also help you avoid costly interest fees every month.
3. Only Save to Invest
There are so many people who think that by putting their money into savings they are earning some type of money. This is false. Savings accounts have such little earning potential that they won't do much in terms of helping you earn any type of real capital. If you are going to save, only save to invest that money.
4. Cut Out Wasteful Spending
Start cutting out wasteful or unnecessary spending. Just because you have a certain amount of money, it doesn't mean that you have to spend it. Make sure that you are being diligent about your money, where it goes and what you are actually spending it on. There are things that are necessary to buy and there are things that are wasteful. Little things like buying coffee at a shop instead of making it at home can really add up over time. Go through the things you are spending money on and work on making changes to save a little here and there, over time it can really add up to a lot of savings.
5. Don't Be Penny Wise and Pound Foolish
This old saying about being careful with what you spend is extremely applicable to those who want financial freedom. You may be careful about the little bits of money you are spending, such as the extra coffee, but not careful about the larger purchases you are making. Balance is important.
6. Start Your Children Young on the Path to Financial Freedom
One of the best things you can do for your children is to teach them about the importance of financial freedom. Teach your children about how important investing is and how they need to be managing their money. This will not only help you in the long run, but it will also help your children learn about the importance of financial responsibility. The experts at Royal Financial Investment Group have championed this subject for years and they say the sooner you teach your kid about investing the better. In 2015 they published an investment book for children called Wesley Learns to Invest.
7. Set Strict Financial Goals
Make sure that you are setting financial goals for yourself and that you are tracking your progress towards these financial goals. Your goals needs to be specific and tangible and you need to be tracking every penny you spend and every penny you save on your way to this type of financial success.
8. Optimize All of Your Bank Accounts
If you take the time to optimize all of your bank accounts, you can start earning points and interest that can really benefit you in the long-run. Open an online high-yield savings account, choose a rewards checking account and sign up for a credit card that actually has reward points you can use.