A Short Guide for People Who are Serious About Fixing Their Money Problems

Financial freedom is your goal. You wish to wake up and not have to worry about money. Based on the bills that are piling up, the rate at which prices are going up and not a raise in sight, it may only ever be a dream.

It doesn't have to be this way.

Here are 8 small steps that helped people like you to get rid of their debt. Understand their finances. And improve their financial situation.

1. Know Where You Stand Financially

You need to sit down, and make a list of all your sources of income. Then you need to put them against all your expenses.

Knowing exactly where your money comes from and goes is important.  It is the first step to better managing your finances.

Once you have this completed list. You need to take time and make a budget.

A budget will help you to identify places of unnecessary spending. It will help keep your spending on track. It will show you where you can reduce expenses.

A budget will also make it easier to justify changes that you wish to make in your spending habits to your partner.

Remember that for this to work, you need to stick to the budget.

2. Find a Way to Increase Your Income

Based on your current financial situation, you will need to find a way to increase your sources of income.

If you have a job, and are good at it, then asking for a raise would be a great way to get started.

If you own a business, consider increasing your rates. Then try to find a way to charge for results instead of hourly work. This is one of the best ways to scale a service business.

It pays you for the value that you provide instead of the time you spend working for the customer.

Remember that most customers care more about the results they get than the time you work.

3. Diversify Your Sources of Income

Having one source of income is a very outdated way of living.

Due to the constant increase in prices, it has become a necessity for most families.

The pandemic showed you how easy it is for something to happen and do away with your income. Having many sources is a hedge against uncertainties that can keep you afloat. It helps to protect you against ever losing all sources of income.

Three great ways you can Diversify your income are

• Selling the skills you have gained in your job as a freelancer online. This is a great way to get paid for something you are already good at. There are many businesses, or people who are in need of the skills that you have. Yet, they are stuck paying some big company that treats them like a number.  (click here to find out more about doing this on www.gigged.bz)
• Gaining new skills that are marketable and always in demand. These skills are often referred to as high income skills. The time and money that go into learning these skills are an investment. They can have a significant positive return on your income.
• Invest your income. Learning about investing, managing risk and diversifying portfolios can be scary. Yet, it is still one of the best ways to secure another source of income. Better yet, usually investments aren't tied to your time or work. It is one of the best diversification to your income. (We do recommend that you do your own research before investing in any project.)

4. Set Financial Goals for future

The first steps were to help you navigate through your current financial situation. But to make sure that you don't find yourself in a repeat of that situation, you need to set goals.

Set Long Term Financial Goals

Most people don't plan where they want to be in 5 or even 10 years. Taking time to figure out where you want to be in the long term will set you apart from 90% of the population. It's a great way to help you stay focused on what matters.

When you have a clear understanding of where you want to be in the next 10-20 years, it will be easier to break it down. Breaking it down into smaller bite sized goals makes it less intimidating. It helps you to take baby steps towards your ultimate goal.

Set Short Term Financial Goals

There are two types of short term goals that you need to focus on.

The first ones are the ones that help to improve your situation today.

These include things like:

• keeping your budget,
• finding ways to increase your income
• decreasing your debt
• managing your household spending
• Saving for a car
• etc.

Be intentional with the goals that you set. Make sure that they are taking you closer to financial freedom.

The other short term goals are the smaller bite sized portions of your long term goal. These are the goals that help to make sure that you move toward your long term aspirations. They help to make it measurable. They also help to keep you motivated.

As you conquer each small goal, your confidence and drive will increase. Failure to do this, is what usually makes people lose motivation, direction and give up.

5. Start An Emergency Fund

In the past, people made it clear how important it is for you to start an emergency fund. Most funds should cover at least 3 months of your income.

The pandemic that lasted a lot longer than anticipated, showed that 3 months is not enough.

I recommend that you have a fund of 6 months or more. This will help you to be at ease as you pursue your short and long term goals. It is a must for short term goals.

We include it as its own step since it's an important short term goal that everyone should have.

6. Settle your debts

Debt is not a bad thing. Yet, most people don't use it correctly. If you are trying to improve your financial situation, having a high degree of debt can be a stumbling block.

Reduce your debt as you pursue financial freedom. It is another important step to building your financial confidence.

It will get rid of the stress that surrounds having to meet monthly payments. It will give you peace of mind knowing that your obligations to others are reducing. It will also prepare you for when you are ready to use debt in the way that the rich do.

7. Educate yourself (Become Financially Literate)

Money is a tool that you use every day. In school they don't teach you the ins and outs of using it. Many people go through their entire life living paycheck to paycheck. They never take the time to understand money. Understand how it works, and how to use it to your advantage.

Taking your time to educate yourself about money will set you apart from most people today. You don't need an accounting degree to do this. All you need is the desire to learn and the courage to take action. There are many resources to help you better understand money.

Feel free to read our blog post "Become financially literate by learning these 4 things."  It's a great way to get started on your financial education journey.

The challenge

If you are serious about changing your financial situation, take some time to make your plan. Follow these 8 steps, and stick to it for the rest of this year.

Seeing a change in your financial situation is possible. But you have to do something about it today.