A better question is “how much would you LIKE to be making?”
How much more a month would allow you more financial freedom to take a holiday with your family? Or allow you to move into a better home? Or become debt free?
Now, I’m no financial planner, but I know how to save and live on a budget. And if you are having financial issues I highly recommend you make an appointment with your bank to sit down and make a plan to get yourself out of debt.
Procrastinating on your finances won’t change your situation.
Just like procrastinating on your health, diet and exercise program won’t make you feel any better or have you losing those extra pounds.
Here are some tips to get yourself organized before you sit down with a financial planner.
Let’s do the math.
Use this excel document to estimate your monthly spending by filling out the “Monthly Financial Projections“. But don’t fill this out just yet…
Many people think they need more… but why?
If it’s to “keep up with the neighbors” then you may be living in the wrong neighborhood. If it’s because you dislike your job and you need “things” to distract you or holidays to recharge you, you might be missing the root of your stress…. *ahem*… the job you don’t like!
Take some time to answer these questions:
- What is it that you would like to afford? Why? How much is it?
- Do you have debt, loans or credit card overdrafts? If so, how much is it? And what is a realistic timeline to pay it off?
- How much do you currently make per month? How much a year?
- How much are your monthly bills (electricity, hydro, cell phone, insurance, rent, car, gas, internet, tv, groceries, clothing, entertainment, eating out, transportation, parking, cosmetics and spa)?
- Write down everything you spend down to your coffees and online shopping.
- What are your monthly savings? To calculate this, take your monthly income minus monthly expenses (use the Monthly Expense Sheet for easy calculations).
- Are you living beyond your means?
- Do you have a dream that you’ve been putting off?
The Looming Debt
Your savings should first go to paying off your debt as soon as possible .
However, depending on your mortgage rate, it may not be the wisest decision to pay that off quickly. If your mortgage rate is lower than your potential to invest, you may not want to pay it off any quicker.
Give yourself a realistic deadline for paying off your debt. You may need to come up with creative ways to increase your income and decrease your spending.
Highlight any spending that is not absolutely necessary (be honest with yourself). How can you save at least $100 on your current spending habits. First thing is first. If you have any credit card debt, pay that off first. Give yourself a deadline and find out how much per week you need to contribute towards your debt.
Now, give yourself a realistic deadline for your financial goal. You might not like this number, but it might just be the motivation you need to start saving and paying off your debt even quicker.
Your financial freedom #
You financial freedom # is the amount of money needed to get yourself out of debt and able to have the freedom to take on your dreams and goals.
= (total debt + loans + expenses) + financial goal - (savings + earnings) = ??
- Total debt + loans + expenses = any credit card debt, school loans, annual mortgage fees, living expenses, tuition, etc
- Financial goals = are you saving up so you can afford your kids to go to college? Maybe it’s to get a used car? What ever you are saving for, add up the amount per year that you would need to save before the time comes to purchase it.
- Savings and earnings = subtract your current annual savings and earnings
This number will be a negative value (ie. -$3,289). Now the fun begins because you get to be creative and figure out ways to create that income. It may be putting in more hours at work, or cutting back on your expenses so that you can increase your savings. Or it might be to talk with your financial planner to consolidate your debt.
Most likely it will be a combination of these things. Now that you have an idea of your financial situation and where you’d like to go, go ahead and start to fill out the “Monthly Financial Projection“.
Click here to download –> Monthly Financial Projection
* Sign-up for the Daily Dose Calendar to get worksheets like these to be successful in life.
💲 Financial Freedom Plan #1: Creative Juices
For the next week, write down 3 ideas each day on ways you can generate more income.
It could be ways to be more efficient at work. Or how to turn a side project into something more lucrative. What about taking something you already know a lot about and teaching others through coaching, writing an eBook, or starting a blog?
The ideas may be silly, over-the-top, or extremely practical. Regardless, start your creative juice flowing.
Here are some topics to get you started:
- something that directly benefits you
- something that benefits a group in need
- something you are exceptional at
- a need that is not being filled effectively
- a need that you are able to provide at a more affordable cost
Using a mind map will help to visually get your ideas down and start them growing. Download a FREE one here –> Mind Map
💲 Financial Freedom Plan #2: Get Inspired
If after 1 week you still haven’t come up with an idea that excites you or has the potential to increase your income, take more time to build that great idea.
Write down 5 ideas a day until you find something that lights you up.
Once you’ve found a great idea, start a new mind map (download HERE).
Be as creative as you can and look at the project from as many different directions as possible.
Put yourself in the potential buyers shoes. What objections, questions, sticking points will they have?
How can you address their concerns and show value in what you’re offering?
Even if other people have come up with a similar concept that doesn’t mean you shouldn’t go for it. All it tells you is that people are interested in that topic and if you can offer a unique approach or package your idea in an attractive way, it could be your money maker.
If you are still feeling stuck, try reading business and behavioral economic materials that are sure to inspire a flicker of creativity.
Here’s some recommendations:
- Thinking, Fast and Slow –Daniel Kahnamen
- Stumbling on Happiness –Dan Gilbert
- Linchpin –Seth Godin
- Tipping Point –Malcolm Gladwell
- 48 Laws of Power –Robert Greene
- On Writing Well –William Zinsser
- The Wiki Man –Rory Sutherland
- How to Win Friends & Influence People –Dale Carnegie
- The 22 Immutable Laws of Marketing –Al Ries and Jack Trout
- The Ultimate Sales Machine –Chet Holmes
- The Art of Choosing –Sheena Iyengar
- Predictably Irrational –Dan Ariely
And here’s a list of marketing podcasts to start digging into:
- The Art of Charm (for the fellas)
- The “I love Marketing” podcast
- The James Alterchur Show
- HBR Idea Cast (Harvard Business Review)
- The Tim Ferris Show
- Ted Talks
- The Smart Passive Income – Patt Flynn
- The Joe Rogan Podcast (just because he’s awesome and entertaining)
- This Old Marketing Podcast (PnR)
- This Week in Startups (Jason Calacanis)
- Freakonomics Radio (Stephen J. Dubner and WNYC)
- Social Pros Podcast
- Entrepreneur On Fire (John Lee Dumas)
💲Financial Freedom Plan #3: Feedback
Don’t procrastinate on the details if you haven’t started putting your thoughts into action.
You need a starting point in order to improve upon it.
Get some feedback from friends you trust and know will be honest with you. But don’t go blabbing to the whole town. Keep it your passion project to yourself and only strategically ask close friends for guidance.
Constructive criticism and a new set of eyes can help give your project a clear direction, but always keep your integrity in mind.
Maybe you’re ready to take your project to the next level and need people to try it out.
Trading your product/ service for testimonials that you can use later on for marketing and improvements can be invaluable, especially if your testimonial is someone well-known and respected.
💲Financial Freedom Plan #4: Get a Mentor
Ask for assistance and find a mentor.
Contact experts in the field that your project is in and get their feedback.
You may need to build an online relationship with your mentor. Make sure to have something of value to give them in exchange for their expertise. Don’t just ask for their help.
Be creative. Research who they are, what they like, what they are interested in and appeal to their personality. Maybe you both have a common hobby or interest. Maybe you can help support their work in some way.
💲 Financial Freedom Plan #5: Know Your Audience
When you are at the point where you are ready get things shipping and moving, think about how you’re going to market your product/ service.
- Do you have an audience to sell to?
- Who is your target audience? How are you going to reach your target audience?
- Do you need overhead funds to support the potential demands?
- Do you need to get financial assistance?
💲 Financial Freedom Plan #6: Don’t Be Afraid
Don’t be afraid to:
- Try something different
- Think outside the box
- Work your butt off, even if it means you don’t partake in as many social events
- Network with other professionals inside and outside your field
- Be confident in your work
- Spend, if that’s what it takes to make your business grow (ie. ads, marketing, networking events, books)
- Ask for help. Imagine what could be achieved when you have support
- Outsource basic tasks that take up your valuable energy and time. (ie. house cleaning, sorting your emails, creating graphic designs)
- And most importantly, don’t be afraid to FAIL…
Failure and negative criticism is a major road block for many people. It stops people from even trying.
It’s when the “I’m not good enough” and the “I can’t do this” or even the “This isn’t worth it” thoughts slowly start to kill your project.
Don’t let that happen.
Surround yourself with positive people who believe in you. But more importantly, believe in yourself. You may have something to lose, but you have more to gain.
Failure is just a sign that you have gone for something that challenges you. Ever great entrepreneur has failed at some point. The successful ones are the those who get back up to fail again and again. At some point, you are bound to get lucky… Stick with it.
* If you liked this article, sign-up for the Daily Dose Calendar to get worksheets like these to be successful in life.
** Disclaimer. I am not a financial advisor nor do I have everything figured out. Just like you, I’m working it all out, but I’m happy to say that I’m in a career that I love, I’m treading untested waters, working my butt off and loving life. This might not be for you, but it sure works for me.