This first step, to know yourself, may seem patronizing. After all, most of us know who we are. This step is to get to know yourself from a detailed financial perspective. It can also involve being honest about how much you know about personal finance and financial planning. It’s admitting that you need some help and committing to doing the work to get yourself into a financially healthy and stable position to create financial freedom.
The first step you need to take, is to do an honest self-assessment of where you stand. Find out what you own, what you owe, how much cash you have coming in every month and more importantly, how much you have going out. You can and should use all the free tools you can find to help you whether online or available in-person. Find statements for your credit cards, mortgage, consumer charge accounts, any money owed and learn the balance, the interest rate, the minimum payment and plot this out. Do not ‘guesstimate’, truly know thyself. Use blog posts like this, free online calculators, Excel spreadsheets, or even an old-fashioned pen and paper. You need to know your own financial picture in detail; a personal balance sheet.
Next, you are going to get help. Whether that is by hiring a CFP® like me, or subscribing to a podcast or other media offering from a finance pro that you like. Just start seeking out information and don’t be shy about asking questions. Find likeminded souls to share information with. Talk with friends about finances. Take an online course. It’s a popular topic and you do not need to know all the terms, lingo, and buzzwords. Just start, and remember to be curious.
It may sound odd, but just deciding to be financially independent and getting started is the hardest step to becoming financially independent. It’s also your new goal, your new mantra! Speak it aloud, write it down, post it to the fridge, your laptop, in your car, in your electronic day timer or wherever and however you need to be reminded. Join a FIRE (Financial Independence Retire Early) group Do it! Say yes to knowing yourself financially and to improving your own financial life.
In each week’s step to financial freedom, you’ll notice there will be intermediate goals or steps to work on. You have your step for week one, so spend a few days and get yourself organized and get real about what you own and what you owe. This will be an eye-opener in many ways. Just deciding to be financially independent and taking an assessment of your current economic situation is a huge step forward.
As an independent Certified Financial Planner™, I can help you plan for financial independence and be on top of your goals. Contact me and let’s get started on a plan! #talktometuesday #education #Hireaplanner #tax #cashflow #stressfree #newplan #savings #FIRE #FinancialIndependence #CFPPro #goals