Introduction:
Money is an essential aspect of life that requires proper management and control. Many people find themselves struggling with their finances due to a lack of financial knowledge and planning. In this article, we will discuss the five things that we should do with our money to achieve financial freedom.
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Get on a Written Plan (Budgeting):
One of the most important things is to have a written plan for our finances, also known as a budget. A budget helps us to keep track of our income and expenses and ensure that we are spending our money wisely. As John Maxwell says, "A budget is people telling their money what to do instead of wondering where it went." Winning with finances requires an intentional act, and a budget is the first step towards intentional financial planning.
Get Out of Debt:
The second thing, we should get out of debt. Debt can be a heavy burden that holds us back from achieving our financial goals. As the Bible says, "The borrower is slave to the lender." Dave Ramsey, a well-known financial expert, advocates getting out of debt and living debt-free. He advises people to stop borrowing money and to live within their means. By doing so, they can keep all the income they earn and avoid the stress and burden of debt.
Credit Cards: Friend or Foe?
When it comes to credit cards, Dave understands the power they can have, both positive and negative. He's seen how they can destroy people's lives, but he also recognizes that they can be good for reward points. However, he's never met a millionaire who became wealthy through reward points.
Learn to Say No:
Getting out of debt requires discipline and sacrifice. We need to learn to say no to things that are not essential to our lives. This may mean cutting back on luxury items and entertainment, but it is a necessary step toward financial freedom. As Dave Ramsey says, "The first few years were tough because there was stuff I wanted to do, and I didn't have the money, and I had to learn this magic ancient word called no."
Sell Unnecessary Assets:
In addition to cutting back on expenses, we may also need to sell unnecessary assets. For example, if our truck payment is higher than our house payment, as Dave Ramsey suggests, it may be time to sell the truck and downsize. By selling unnecessary assets, we can free up money that can be used to pay off debt and build wealth.
Invest in Assets that Generate Income:
Finally, all entrepreneurs emphasize the importance of investing in assets that generate income. This means buying assets that produce a steady stream of income, such as rental properties or stocks. By investing in income-generating assets, we can secure our financial future and ensure that we have a steady source of income in retirement.
Conclusion:
In conclusion, by following these five steps, we can achieve financial freedom and live a life free from the burden of debt and financial stress. By being intentional and disciplined in our financial planning, we can ensure a secure financial future for ourselves and our families.