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Did you know that Americans' credit card debt reached $931 billion last year according to NerdWallet?
Considering that some consider the path towards financial freedom a "path", I consider it more than that because it is life altering. It is a journey.
It's a journey that requires careful planning, future forecasting, and most importantly, communication.
That's why you may notice in many of my previous blogs that I consider this labeling this journey as a road trip.
Your financial plan is your GPS to paying off credit cards, paying off debts, learning how to save for retirement, or pay for your children's college.
Where most people make mistakes is often found in the lack of planning. This isn't to say that if you fail you should quit but, rather, it is an opportunity to learn from your failures and your setbacks.
It is such failures that I have encountered on my personal journey where I feel like I am an expert in this category because I have stumbled and have seen my credit score drop significantly early in my career because of lack of financial knowledge and because I neglected some very important resources which I will describe below.
If you're in a situation like this, then know that there is a light and there actually is hope.
To get there you have to be prepared for life's challenges which will be thrown in your direction but with a good foundation and proper planning, you will achieve this life changing goal much more adequately and effectively.
Let's get started!
Tip #1 BE PREPARED
When starting a race, runners with their athletic shoes and shorts, headphones in their ears, and an iPod or phone playing music to boost one's motivation is setting the stage for each of their long hard practice of jogging and running, sweating and hydrating.
This is the race where every runner has personally prepared oneself to be both mentally prepared and physically prepared.
If you've ever ran a 5K or a 10K, then you know how easy it is to find the starting line. The big banner reads "Start" with a large digital clock beside it. There is no mistake about where you need to line up at before the race begins.
When or if you decide to take the steps to become debt-free-which I highly encourage you to do, you have to prepare mentally and physically. Much like a runner, practicing will play a very large part. You'll have to be prepared!
For instance, a $10 bill is your 10K run. You need to make this $10 last a few days as much as you need your lungs to withstand the length of a 10K. On the first day, you don't start sprinting as fast as you can when training for a 10K. If you do, you will quickly burn yourself out and tirelessly exhaust your energy. You have to pace yourself.
The same goes for your $10. You have to mentally prepare yourself in how you're going to spend it wisely.
For example, my love for coffee is very evident as many times as I go into a local coffee shop. I know that a regular coffee with a splash of almond milk will run me less than $2.50. I don't go in buying the most expensive cup because I get influenced by their marketing or advertising. If I did, that $10 budget lasts only a day when I need it to stretch several days so I can enjoy more coffee throughout the week.
I also urge you to take a look at your credit report. When I took a look at mine, I had a negative charge from some dental office that dated back 5 years. It was negatively impacting my credit score in which I called the dental office, explained the situation, and got the matter resolved. Within 30 days, I saw an increase in my credit score because the charge had been removed. This took me approximately 15 minutes.
You have to know your credit history and credit score. There are services that will charge you and try to upsell you but you only need a recent report to include a credit score. That's why you have to get your free score from Credit Sesame.
Tip #2 ATTITUDE
One of my favorite authors and a book you should read is John C. Maxwell's Attitude 101. If you're ever feeling down or defeated, then definitely read this because his penmanship gets to the root of the issue yet inspires and motivates at the same time.
His description of having the mental ability and disposition is crucial to establishing the right atmosphere.
As you may be thinking, how does this apply to me? If you are the leader of the household, then you now how important it is for your attitude to be the strong foundation for your spouse and your children. They heavily rely on you being the rock, the stable foundation for them to fall back to. This person sets the tone, the breath of fresh air, the positive energy in the room. It isn't an easy task but one that I believe is one of the most important aspects in being the family leader.
Perhaps, your role is different. You rely on the breadwinner or you seek that stable foundation. You attitude plays an even more important role because leaders need wisdom or a place to vent, get some thoughts out. This is your moment to the strong ally and be the supportive follower. Strong leaders are only strong if they have followers. I believe a great follower is just as important as the leader.
…"a great follower is just as important as the leader."
Tip #3 FOCUS
On this journey, you will most likely encounter setbacks. We all do. I encountered more than could count on two hands. So recognize it's normal. The important factor is to get back on track.
For example, you planned your budget so carefully. You spent hours combing through it thinking of every possible situation. Then one hot summer day, the air conditioning starts having issues. All of sudden, your budget had not planned for this several thousand dollar job you may have to pay for.
Another example is during the holidays, your family decides to stop in town...unannounced. You decide to treat them to dinner to avoid having to cook. This dining out wasn't forecasted and now you spent a few extra hundred dollars not budgeted.
A resource that I use to track my spending on a month-to-month comparison, and it's FREE, is through Personal Capital. It has become a motivated personal game to me now to spend less each month and this app/website allows me to do that. Each month I receive an email with a month-to-month comparison showing how much I spent in relation to the prior month. If I beat my goal, then we out and celebrate! Personal Capital offers other services as well to tracking investible assets but other service may require a fee.
Note: For weekly or daily motivation if you find yourself struggling, be sure to check out the Best Personal Finance Podcasts by MakingMomentum.net.
Tip #4 FOLLOW THROUGH
With over 78% of Americans in debt, we need to push for a financial freedom stance and pursue our own freedom from debt. The easy answer isn't to seek consolidation of credit cards or bankruptcy but rather to stick to your plan.
If you happen to derail, find out where it was derailed and get yourself back on track. Following through is the last and most important step n seeking financial freedom. This journey is far too important to quit and to get derailed. Your future and your family are depending on you.
I want to personally invite you to sign up for the Free 5-Day Guide to Debt Freedom. When you sign up, you will receive tips and strategies to help you along your journey.
Let's start a large momentum shift in this country and start being the minority by getting out of debt. Before you decide to take on this journey, remember the four tips above will guide you. Without a proper plan it is very difficult to reach your goal towards financial freedom but with mental toughness and working to be that foundation for your family, you will be providing them with a better and more secure future. To get you on your way, check out my Etsy store where I have a variety of budget templates to help my viewers. These are very affordable and I keep the costs low to ensure everyone can afford them and to ensure you understand the importance of getting a budget in place.
If you have any tips or advice that has worked well for you, please leave a comment below!