Is ‘More Financial Security' on your list of goals this year?
As with relationships, there’s always room for improvement when it comes to personal finances.
I must confess and I’m sorry to disappoint you, but I’ll come clean right here: I am not a money expert.
I did manage to expertly outsmart the Debt-Monkey who was having a party dancing on my back every month. He’d grown so heavy, he nearly crushed the life right out of me.
I can confirm this much: the day I became 100% Debt Free ranks right up there with... graduating as an Ontario Scholar, falling passionately in love, becoming a wife, becoming a mom, launching my own business, booking my very first paying client... Yep...THOSE Life Experiences.
So, here’s the thing... If I could do it...You can too because I’m going to give you the Gold Keys to unlock your debt shackles. The very same ones I followed myself so you too can Ditch your Debt Monkey once and for all, become 100% debt-free and embrace your financial freedom.
Key #1 - Pay Your Credit Card Balance In Full Each Month
The Credit Card Monkey is a wiley one.
Carrying a balance forward will only make him heavier with each month and eventually, he’ll crush the life right out of you too. I know this because he was dancing on my back for years!
Paying the cards off slowly takes massive discipline, but You Can Do It with the Snowball Method of Debt Repayment. (https://davidbach.com/latte-factor-backup/)
Do whatever it takes to make this first Key your new urgent goal and pay off your credit cards as quickly as possible with a methodical plan.
Do whatever it takes to make this first Key your new urgent goal and pay off your credit cards as quickly as possible with a methodical plan.
Here are some suggestions to help. I used all of them.
- Follow the Snowball Plan
- Apply for a low-interest credit line.
- Adopt and follow an extreme frugal-spending plan
After the six-week interest-free grace period, if you’ve left even a few cents unpaid, you’re charged 20% interest from the date of every purchase.
Stop the insanity. Stop using your credit cards. Switch to a cash-only system until the full balance is brought to zero. It’s possible. Believe it. You CAN achieve it.
Key #2 - Make ‘Frugal’ your new Best Friend
Not forever maybe, but certainly until your Debt Monkey is conquered. People all over try to look rich with the expensive car, designer clothes, fancy trips, and the unattractive attitude that goes with it.
Most wealthy people become that way by being frugal with their money habits and rarely spend frivolously. They respect money and are low-key about it. They understand that the value of a dollar is much more than just that dollar.
Take, for instance, your daily Tim’s or Starbucks habit. If you’re like most Canadians, you spend $5.00 a day on take-out coffee.Consider for a moment what that little luxury actually costs you annually. $1,825 is what it costs over a year, but have you thought about what you have to make in order to spend that much of your household’s disposable income?
I’ll bet you’re dying to know!
You’re going to love David Bach’s Latte Factor tool to find out exactly what your coffee is costing you. Your entertainment and take-out lunches will blow your mind too, but the Gold Key Tip with this one is to spend within 80% of what you make.
Leading us nicely into Key #3 - Pay Yourself First.
Nothing new here, right? Financial advisors and gurus have talked this one to death, but it’s an important key. Automatic Millionaire, David Bach’s Gold Key Tip: set up an automatic monthly investment of 10 to 20% of your before-tax income to keep it simple.
Will having financial security in your retirement years be worth it?
Well...take a moment to consider NOT having enough financial security.
What does THAT look like for you?
And then...figure out the most you can invest each month. And then... just start. Don’t put it off. Don’t wait. Begin it.
Key #4 - Create Wealth ~ Be an Investor
Financial wealth is created with long-term investment practices rather than short-term savings. Save for a trip you want to take, a car to replace the rattle-trap. Save for a weekend getaway to reward yourself for a goal you’ve achieved.
Invest for the security of your future.
Investing can be a little scary. As a recovered “spend-every-penny-made and then some each month math-phobe” who thought retail therapy was part of growing up and leaving the bills unopened was normal - I completely understand.
Thankfully, there are qualified, trustworthy advisors to help. Find one who’ll create a plan to help you achieve your life goals - including retiring comfortably. They’ll help you grow your assets and manage your wealth. Be a long-term investor.
Key #5 - Develop Your Financial Plan
Creating wealth doesn’t happen on its own and it doesn't happen overnight.
It takes planning, specific intention, and focused effort. Find a fee-for-service financial planner and pay for a professional financial plan specifically tailored to your needs and goals. This one-time investment will pay off massively.
A good financial plan includes:
- A retirement savings plan - RRSP's
- A tax-free savings account
- A mortgage pay-off plan
- An education fund for your children
- An emergency fund for security
The plan should also consider how to manage and balance it all.
It doesn’t matter where you are with your personal finances. Now’s the perfect time to sit down and sort them out - and get to a better, more organized place. If you’re married... do this with your partner and set a 'Money Date' once a month. Outline your goals. When you begin talking about what you want to achieve and create for your future, it’s easy to design a plan that’ll lead you there.
Andrea Raco, is a Certified Success and Life Enrichment Coach, Founder of Coach for Life and Curator of Gold Key Club ~ a private community for Ladypreneurs, Supermoms and Sisters making a difference in the world.
Great article Andrea! It's so important to clear all commercial debt and get your money situation in control. Those Starbucks coffees, even though I only have a tall dark coffee, add up and adds up to a fair bit of money during the year. Thanks for the tips and book recommendation!
ReplyDeleteAh, Joan...Thank you for stopping by and reading. Beating down the Debt Monkey was such a triumph for me. My parents divorced when I was 10 and fought vehemently almost daily. It was always about money. Their debt and their ability to manage it together destroyed our family. I knew I needed to find a way out of it. $33,000 to a big fat 0. I was the one doing the happy dance. Worth brewing the coffee at home for sure!
DeleteFantastic article! So many ideas here, even if someone were to do one of these at a time to focus on, they will be grateful in the end.
ReplyDeleteThanks so much, Amanda. So happy you found it valuable and thank you for stopping in to read. Yes for sure...just getting the credit card under control will make a massive difference.
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