By Bob Rothe, CFP®
Are you tired of feeling overwhelmed with all the noise in life, with the countless emails and constant demands on your time and attention? Well, you’ve come to the right place. If you want to take back control of your life, why not start by taking control of your money? Here are 5 proven steps you can take right now as you journey toward financial independence.
Step 1: Get Organized
It’s hard to know where to start when you can’t even find your login information or remember what accounts you have. The first step in evaluating your current financial situation is to get organized.
Use a Password Management System
Do you have a system for keeping track of your countless usernames and passwords? You’ll save yourself some headaches if you can find a method to keep all your information in one place. There are plenty of online password managers to choose from that will protect your information and make it easy for you to stay on top of your accounts and policies.
If you want to minimize the amount of paper that piles up on your counters, save a tree and get rid of clutter by enrolling in paperless document delivery for all your bills and financial services. Since you’re planning to create a password management strategy, the only thing you’ll need to do to access account details is find your login information and be on your way.
Check Your Credit
When was the last time you checked your credit? For most Americans, it may be hard to remember. You’re legally entitled to a free copy of your credit report every year from each credit bureau. You can request your free copies at https://www.annualcreditreport.com/index.action.
Keep Financial Documents Safe
Store physical documents (such as your will, trust, and deed) in a fireproof safe. Keep the safe with a trusted professional or loved one.
Communicate With Family
Develop a master directory that lays out all your financial information to help you manage your affairs and serve as a guide to your family members if they ever need to assist with your finances. Be sure to include account numbers and logins and keep this document password-protected or under lock and key.
Step 2: Create a Budget
A strong budget lays the groundwork for financial stability. As much as you may hate tracking expenses, knowing your inflows and outflows is the first step in reaching your financial goals.
Add up all your income and subtract your monthly expenses. If you’re living beyond your means, look for serious ways to cut down on your spending. If you spend way too much money on discretionary items like clothing, for example, give yourself a monthly allowance and stick to it.
Remember, your budget isn’t set in stone. You can always adjust your budget as you meet your financial goals. The purpose of fixing your finances is to create a better life for yourself.
Step 3: Build An Emergency Fund and Tackle Debt
Emergency funds aren’t one-size-fits-all, and it’s best to come up with a number based on your income stability and family. A good rule of thumb is to have three to six months of expenses on hand.
Debt keeps you living paycheck-to-paycheck, which destroys your quality of life. There are several debt payoff methods out there, but two popular ones are the debt snowball and the debt avalanche. Talk to a trusted professional—such as a financial advisor or financial planner—about which method may be best for you.
Step 4: Protect Your Assets
You’ll begin to accumulate sizable wealth as you pay off debt and save. In the event something happens to you, ensure your family is taken care of well by protecting your assets. A few ways you can protect your assets:
- Create or update your will
- Update beneficiaries
- Analyze insurance coverage
- Evaluate investments and retirement contributions
Step 5: Chart Your Course to Financial Independence
Getting your finances in order can be an overwhelming process, but the choices you make today will impact where you end up tomorrow. Thankfully, you don’t have to walk the path to financial independence alone. No matter where you are in the process, our team at Wealth Management Group can help you make the right decisions with your money to benefit your life and your family.
We’re here to walk with you through every step. From getting your financial house in order to living out your years in retirement, you can count on us to be your trusted advisor. To learn more about how we can help you reach your financial goals, contact my office by emailing firstname.lastname@example.org or calling (214) 644-2564.
About Wealth Management Group, LLC
Wealth Management Group, LLC (WMG) is a Registered Investment Advisor with the Securities and Exchange Commission. WMG is an independent company owned by the advisors. It is not owned by nor is it a subsidiary of any other company. Our professional staff includes four advisors that hold the CFP® (Certified Financial Planner) designation and one who is a CPA (Certified Public Accountant). They have an average industry experience of more than 15 years. WMG specializes in all aspects of wealth management, including wealth protection, wealth enhancement, wealth transfer, and charitable giving. They serve individuals and families in Collin County, the DFW metroplex, throughout Texas, and beyond. Learn more about WMG at www.wealthmanagementgroupllc.com.