At Fiat Wealth Management, they work every day to help clients achieve their financial goals and create a roadmap to success. And for many people, that begins with developing an effective budget.
Budgeting is one of the most important ways to gain financial freedom and live the life you truly desire. By following their instructions, you can begin your path to saving more, spending less, and gaining greater control over your finances.
Define Financial Freedom
Before you begin your journey to financial freedom, you need to have a clear idea in your mind of what that looks like. Every person has a different idea of what it means to be free:
- No longer feeling stressful and anxious about unexpected bills
- Enjoying a vacation without thinking about the costs
- Having dinner at an upscale restaurant once a month
- Spending more quality time with friends, family, and loved ones
- Leaving an unfulfilling job to pursue your passion
Whatever you imagine, having a picture of your own personal financial freedom will provide you with a tangible goal and motivation to keep going.
“Financial Freedom is achieved by first defining what is “enough” and then creating a plan that enables you to do what you want to, when you want to, all while the stock market inevitably continues to deliver unpredictable volatility.” – Daniel Colvin, Fiat Wealth Management
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Budget Your Money – Before You Have It
One of the most important benefits of budgeting is that you always know how your money is being used. However, this is effective only if you plan your spending before you have the funds. At the beginning of each month, carefully map out how your money will be used to cover expenses, service debt, and build your savings.
For people who plan their budgets this way, the difference will be immediately noticeable. Instead of reacting to bills and purchases each month, you will take a confident, proactive approach to your finances.
“You’ve probably heard the phrase “there is no freedom without boundaries.” This phrase is applicable as a rule to the use of a budget to manage your daily, weekly and monthly cash flow. When you assign each dollar you earn a purpose in your budget, you give yourself the freedom to spend your money, knowing all your needs are covered.” – Juan Toran, Fiat Wealth Management
Whether you have student loans, credit card debt, or car payments, debt is one of the first items that must be addressed in your monthly budget. The interest payments alone can keep you from your financial goals for years – and all that time, you will be paying somebody else instead of yourself.
Debt can be crippling and seeing it every month can be overwhelming for people who are building a working budget for the first time. However, there are strategies that you can use to climb out of debt quickly and effectively.
“To grasp why people bury themselves in debt, you don’t need to study interest rates: you need to study the history of greed, insecurity and optimism.” – Scott Airey, Fiat Wealth Management
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Automate Your Savings
When you are planning your monthly budget, there should be line items for every expense. However, while you want to be sure your payments are being made on time each month, you should not forget about paying yourself, too.
Moving a portion of your income into savings or an interest account every month is the best way to begin building your personal wealth. And if saving money seems impossible each month, there is one strategy that can make it much easier:
Make saving automatic.
Instead of planning how much money you will save each month, schedule a portion of your income to go into a separate savings account as soon as you have it. Even saving $100/month will give you a $6000 emergency fund after only 5 years. And when it is automatic, you never have to worry about it again.
“The biggest lie you can tell yourself is, “It’s okay, I’ll start saving when I start making more, my expenses go down, things start to calm down, etc…” Fill in the excuse. The truth is, if you don’t start saving, even if it’s a small monthly amount, you never will. – Daniel Colvin, Fiat Wealth Management
Achieving Financial Freedom
Creating an effective budget is one of the best ways to achieve financial freedom and build personal wealth. At Fiat Wealth Management, they help individuals achieve their financial goals with proven wealth management strategies.
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