Tips To Establish Financial Security
Over at Debt Consolidation Lowdown, there is a great article on 50 tips to establish financial security that is a valuable read regardless of your current situation.
After reading through the tips in the article, there are a few that I think have been instrumental to my success with eliminating debt and getting myself on the path to F.I.R.E..
Set Goals.
If you don’t take the time to sit down and set goals for yourself, how do you really know what you want to accomplish or when you have accomplished it? You’ll find many experts that indicate the mere process of physically recording your goals will increase the probability of attaining your goals. If you haven’t done so already, take the time to sit down with a pen and paper (or even your keyboard and Notepad) and record your goals.
As I mentioned in my post about being honest with yourself, I did not begin to have real success with eliminating my debt until I took the time to develop my goals and then create a plan to reach those goals. Until completing this process, it was far too easy to ignore my goals.
Spending Plan.
In my experience, I combined two tips from the article (track spending and budget) into one process of creating my spending plan. When I first began the process, I really didn’t have a firm grasp on how much we were spending every month and there was a good deal of money slipping through the cracks. Before I could accurately budget my money, I had to gain an understanding of where it was really going each month.
With my log of expenditures, I was then able to create a monthly spending plan (aka budget). During our days of debt elimination, we were quite strict with our budget but we have adjusted that as our goals have changed. Now we follow a very loose budget that is really based on defining our savings goals first and then spending the rest. Rather than allocate money to all of our expenses and then hope there is money left over to save, we are fortunate enough to be in a position where we can satisfy our defined savings goals and have enough left over to cover our expenses and non-essential spending.
Emergency Fund.
As I’ve recently mentioned, I have moved my eFund over to HSBCdirect to take advantage of their promotional rate for new deposits. In addition, it is experiences like this recent week that demonstrate to me the importance of having a healthy emergency fund.
At a time where you are mourning the loss of a loved one or dealing with other family emergencies, one of the last things you want to worry about is money. By having an adequately funded emergency savings account, it will free you from adding this additional stress to an already difficult time. This last week has been trying enough for me and my family but we have worked hard to be in a position where taking time off of work and any potential lost income was not even a concern.
Wealth of Tips.
While these three tips are ones that really stood out for me, there are plenty other quality tips to establish financial security. Check out the article and be sure to come back and let me know which tips are your favorites!
Great Tips and Great Blog. Hopefully I make enough money to actually use your tips soon! Keep up the great work!
@Gary: Thanks for visiting and the kind words. If I may say so, I think the tips can be even more valuable when you are NOT making enough money as that makes money management even more critical.
If there are any topics that you feel would be beneficial for discussion, please let me know!
Looks like you answered some of my questions in your latest post! Maybe if you provided an example with hard numbers of an average techie making 65-80k a year? I think that would give people a real hands on look to what you’re suppose to do!
Gary, I’ll see if I can work on an example with those numbers. However, it is important to note that any example is really going to vary based on the goals that have been defined.