Financial freedom is well within your ability. Your dreams of traveling full time, quitting your job and being your own boss is sitting right in front of you. Now is the time to get your finances in order and make the changes that are necessary to this life of living free. Most people start looking at a financially independent life and jump right to ideas to earn money that are away from a typical nine to five job as the first step. This is a great start because it is important to set these ideas into place so that you can begin to build your stream of income. However, one of the very first things that a person needs to do is to sit down and take a deep look at their expenditures. They need to look at their budget, or create a budget if one is not in place. Taking a deep look at your true cost of living is so very important. Research your expenditures. It will give you a roadmap to successful financial freedom.
Review your Spending
Each week, I sit down with an old fashioned accounting book and my receipts. I write down the date of a purchase, the store and the amount that I spent. Everything goes into this book. A two dollar purchase at a convenience store for a drink? It’s in there right beside the larger purchase for a computer or a down payment for a vacation. No expense is inconsequential. Why do I do this? It seems like a lot of work to a most people. However, this simple act of notating my expenses is important for a few reasons. The first and most important reason is that it keeps me in check and I can know that I am not overspending my income. Secondly it gives me a very clear picture of where I am spending my money. Am I dropping hundreds of dollars a month on random useless purchase? Last but not least, It helps me keep my budget up to date and relevant to my current life status.
Track your Expenses
Why is it important to know where I am spending? As you move to financial freedom there is going to be a moment that you are going to be taking that leap of faith to quit your job and allow your side hustle become your main source of income. There is going to be that time when it’s time to step into the RV and drive away for a life of full time travel. Or maybe that magical moment will be when you quit your job and can work from home for yourself doing what makes you happy. Whatever your dream, there will be a wondrous moment when you decide that it is time to fly with that dream. You need to know exactly what you are spending each week. You need to know what your basic financial needs truly are. Do you need $1000 to live or will you require $3000 a month? You need to know what your goal is and tracking your expenses is instrumental to creating that goal.
Cut your Expenses
Furthermore, if you want to reach that ultimate goal a bit more quickly, you can pare back your spending so that you can reach your goals faster. What are you spending your money on? Are you picking up a lackluster breakfast every morning at a fast food restaurant. Something you don’t really like, but it’s just convenient? In that case, when you see the $25 a week/$100 a month that you are spending, you may just decide that the convenience is not worth the money you are spending. That may be worth the convenience to you, but maybe that weekly and daily purchase may be holding you back.
Spend time looking at your expenditures each time you review your logs. Look for weeks where you found better bargains for the same service or product. Review your information to determine what differences occur between weeks. Think about what is important to you. Is it really important to have that $5 cup of coffee or will a to go cup from home work just as well? Be willing to compromise. A $5 cup of coffee may not be worth it, but a $1 cup of coffee at the gas station may be the perfect solution. Find what works for you in the most financially sound way. Look at your expenses! Decide what is important and start spending your income on things that are worthwhile to you. Only you can decide what is important for your life and what you can easily cut or at least scale back. Cutting back my expenditures in my case is super important for a few reasons. The first an main reason is that I want to save as much money as I possibly can. Many of my goals and dreams require some large expenses right up front. There are expenses like the purchase of an RV and/or the purchase of a home. But even beyond building my savings account, cutting my expenses and therefore my monthly budget will allow me to reach my goal to be financially independent at a lower budgeted amount! That sounds like a really good reason to cut expenses to me! There is no one size fits all solution to looking at expenses. What is important to one person is not important to the next person. However, you should be willing to look at where your money is being used with an open mind. Research the way that you spend money and the trends that you have with your income. At the very least, you need to know exactly what your expenses are so that you can decide how to work that into your future financial plans. At the best you will find ways that you can cut your expenses in order to reach your financial freedom more quickly!
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