Achieving financial freedom is often considered the ultimate American Dream. It’s the freedom of having options — whether it’s the traditional white picket fence, home and children or the adventuresome travel-filled lifestyle — or both.
Though these large life goals can feel far away in the rush of day-to-day living and the sometimes overwhelming financial demands of the present, the distance between now and your dream-filled future can be bridged by taking the time to assess where you stand today. Begin setting your financial goals by asking yourself these four questions1:
- How much are you spending?
- How much are you earning?
- How much do you owe?
- How much do you own?
Imagine your entire life — past, present and future— laid out on a map. If your goals and dreams are your destination, what does your “you are here” mark look like? In other words, where do you stand in your financial present?
Only once you’ve identified both points can you begin to properly navigate in the direction of your dreams. These four principle pathways can help guide you toward a financially responsible future2 as you work to carve out your own.
Are you spending more than you earn? Do you even know?
Write down all of your expenses and all of your income for the next month, two, even three. You may be surprised at what you find when you take an honest look at the numbers.
To begin making progress towards a fiscally sound future, build a lifestyle that can operate within the parameters of your means by setting financial goals. In other words, spend less than you earn3. It’s the most simple and basic rule in creating a budget4 and financial plan, and a critical first step on any pathway to achieving financial freedom.
If your monthly expenses repeatedly exceed your income, find ways to rethink and reduce. What can you cut out? What can you cut back? When rethinking discretionary indulgences begins to feel like a sacrifice, remember that the tradeoff is in service of something greater — your American Dream.
An alternative or supplemental strategy to cutting back your spending is increasing your earnings. Don’t accept your salary as fixed or your income as a given. The way you make money is just as malleable as the way you spend it.
Take the time to develop additional income streams to reshape the landscape of your financial reality. Increased income allows for the greater flexibility that characterizes the freedom of choice and options that enable any future dreams.
Know What You Owe:
Balancing debts with savings goals and the financial demands of daily living can be overwhelming — simplify by consolidating your debts into one, streamlined payment. Combining all of your balances with a personal loan can help, not only in simplifying the debt pay off process, but also, in some cases, by reducing your interest rates — saving you money today and in the long-term. Apply for a debt consolidation loan and see how the power of simplicity, using personal loans for debt consolidation, motivates your forward momentum.
Fund Your Future:
Break down your financial goals5 into simple numbers and concrete next steps. For example, if you want to go on vacation next year, calculate the total cost, then figure how much money you need to save every month between now and the date of your departure to reach that total.
You can apply this same simple logic to all of your goals – from buying a home to sending kids to college to funding your retirement. By setting financial goals and breaking each down into a tangible number and next step, the enormity of saving $1,000 or $10,000 may be far less daunting. If you find that you need a helping hand in reaching some of your larger financial targets, a personal loan can serve as a powerful tool in responsibly paying for big-ticket purchases. Be they unexpected life emergencies or celebratory life events, personal loans provide an alternative to other high-interest forms of debt.
Make your American Dream, whatever it is, tangible by creating a financial plan6, setting goals and achieving financial freedom with these four guiding pathways to financial responsibility.
- Spending Consciously
- Earning More
- Knowing What You Owe
- Funding Your Future
Ultimately, you’ll blaze your own trail led by your passions and values, but these four fundamentals can serve as your foundational guideposts on any successful fiscal journey.