Managing your money can be a lot to ask you if you don't know what you're doing, but I'm here to give you seven steps to get you debt-free and wealthy in time. Just go ahead and really listen to what I'm saying. There will be a separate article specifically on managing your debt, so I won't touch up to much on the subject.
The Steps and What They Do
These steps that I have researched and taken the time to post about will help you to live your life financially secure and at peace knowing you're debt free and you've saved up for whatever your big goal might be. It might be adults, saving for your child's college expenses and tuition or younger students, saving for medical school or your dream house. Whatever that goal is, these steps will help you get there.
Step #1: Take 1,000 dollars and put it in an emergency fund.
This first step may seem like a drag if you're reading this because you have no money, but what is important is that you think of yourself first then pay the debt and bills. This 1,000 dollars is for an emergency only. I don't want you to spend it on an annual pass at a theme park or on a car(if you can find one that cheap). What I want is for you to use those 1,000 dollars for a big expense that normally would be paid for by a credit card. Instead of borrowing, you can pay in cash. So, step 1 is a thousand dollars in an emergency fund. 500 dollars if your income is less than 20,000/yr.
Step #2: Pay off all your debt(except your house if you have one)
This is a step that I will elaborate on more in a later article, but basically what you do is start off with your smallest debts and work your way up to the bigger ones.
Step #3: 3-6 months of expenses in savings
Remember that this step is over time. After paying your expenses, except your house payment, you are going to save extra money until you have 3-6 months of savings expenses in an account. DO NOT SPEND THIS ON PURCHASES. EMERGENCIES ONLY!
Step #4: Investing 12% of your household income into Roth IRA's and pre-retirement tax plans.
This step is important for adults with children, but also important for college students. All of you are full-time studying and need money for expenses and fun time, but I tell you that investing money for the future is very important. Even if you don't have a regular 9 go 5 job or a part time job at Dunkin Donuts, it is important that you go through all of these steps and be self-disciplined in them continually so that way, debt won't even be a part of your thinking later or your children's thoughts. A great way to make active income without having a boss or determining hours is selling. You can sell anything you want and its a well-respected hustle. I personally have done this since I was a id because i HAD PARENTS THAT TAUGHT ME WELL WHYEN I WAS YOUNG. In the book that I have published I talk about the steps vita to becoming successful, so if you would like to check out my book, I will leave a link down below. Even just investing money into a piggy bank would be sufficient because cash is infinitely better than electronic payments.
Step #5: Save for your childen's college using tax-favored plans
Please if you don't have kids or they're all grown up, you can feel free to skip this step, but if you do have kids, listen good.
Please if you don't have kids or they're all grown up, you can feel free to skip this step, but if you do have kids, listen good. college is a privilege not a right, and no kid deserves a free ride to the school of his or her choice. You don't deserve college if you can't pay for it yourself, teens. Parents, please encourage your children to pay for their own things, because it will mature them in ways that others can't with their parents paying for college.
The way to save for your child's education is if they open an Education Savings Account. It is most likely called the Education IRA because it works a lot like the Roth IRA. You invest 2,000 dollars each year tax-free so when the child turns 18, you could be making 36,000 dollars tp 126,000 dollars which could easily cove r the cost of a state school for 4 years. If it doesn't, there is always having the student doing work-study or side jobs, or selling.
Step #6: Pay off the house early
Remember that buying a house when you're not ready is a mess, so make sure that you ae debt-free and you've completed these last baby steps. There is nothing wrong with renting for a little while because it's wise and mature and it gives you the freedom to save for your dream house. I would recommend paying your house with cash or check because cards can just cause a big mess and loans aren't good either.
Step #7: Build Wealth!
With all of the steps complete you can now relax and build your wealth.
I hope you enjoyed this article, I will go much more in detail with e-books for these steps, but these will guide you on your way to success and financial freedom. Have a great day!!
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