Finding Financial Freedom.com

Step 1: Take Inventory

-      Develop a spending plan – more detail will be given about this later

-      Stop spending cash so tracking spending is easier

-      Make a commitment to by your spending plan and cut back by eliminating all nonessentials in spending until you are completely free of consumer debt

Step 2: Buy adequate life insurance

-      Rule of thumb for a young family with children at home is to buy life insurance on the husband equal to ten times his earnings. The objective is to replace the income which is lost to the family in case he dies.

-      Should you buy whole or term life insurance? The old saying is, “Buy term and invest the rest.”

Step 3: Pay off all consumer debts

-      Domino theory – pay the smallest debts off first. This will give you the encouragement, motivation, and excess money to pay off other debts faster.

-      Limit, or eliminate, credit card spending.

-      Freedom is found in a debt free life

Step 4: Start an emergency fund

-      Therefore, we need to do what Mom used to tell us, “Put money away for a rainy day.”

-      Experts suggest that you set aside, in a liquid account, at least 3-4 months of income that would pay for living expenses in case your job is lost

-      Research shows that it takes an average of 14 months to find a job

Step 5: Begin a long-term savings plan

-      One of the best ways to begin investing long-term is in mutual funds.

-      Another good way to start is in a company sponsored 401k plan, with money automatically deducted from your salary.

-      Saving consistently will provide for you in those retirement years.

Step 6: Pay off your automobiles

-      Many people spend more in their lifetime for automobiles than for a house

-      Your best bet is to buy a reliable automobile and drive it as long as possible. A good alternative is to buy an inexpensive new car, service it well, changing the oil regularly, and keep it for a long, long time, up to 100,000 or 200,000 miles.

Step 7: Prepay on your home mortgage

-      Pay extra towards you’re mortgage principle on a regular basis

-      On a $150,000 mortgage, you can reduce it from a 30 year to a 15 year by paying an extra $300 per month towards the principle

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