How to Master your Personal Finances, Escape Debt and Design your Life

The quest to financial independence is riddled with hurdles of sacrifices and personal responsibility. The only true way to master your money, escape debt and design the lifestyle you want is to understand how to properly control your personal finances.

This article will share how all the grand benefits of life can be yours if you’re willing to bite the bullet and accept financial responsibility.

Phase 1: Set Clear (but Difficult) Financial & Personal Goals

The first phase of reaching your financial freedom and mastering personal finance is to set clear (but difficult) financial and personal goals. The biggest mistake people make when saving and paying off their bills is not having a clear plan or strategy; one of the main elements of this is setting goals which give you a clear understand of the actions you need to take in order to accomplish your goals.

First and foremost, collect every balance and bill you have to pay, each month, and consolidate them to understand where your money needs to go in order to function and live your life. Next, determine how much of your monthly earnings are going toward paying bills and other amounts that are going to expenses that are frivolous. Finally, set a clear goal for when you plan to pay your bills and still have money to invest toward “big ticket” items or experiences.

Saving money and mastering your personal finance starts with having the correct mindset. Failing to have a goal will create the ‘slump’ that all people experience when all of their income only goes toward paying the bare essentials; it creates a void in which you feel no escape. Goals, ones which are difficult to reach, adds the correct amount of stress and pressure to stay focused when reaching for your goals and will help you properly understand the temporary sacrifices you must make in order to master your personal finance and win the “big ticket items”.

Phase 2: Destroy your Debt to be truly free

Debt will forever linger over your finances and place a great deal of stress on your shoulders as long as it’s existent in your life. The average credit card debt of a household is over $15,000; this is equivalent to a new car, weeks of vacation and months of mortgage payments! Debt is the ultimate factor for stress in the vast majority of the lives of people; the elimination of this stress is what truly sets you free.

The first step toward debt recovery has already been outlined: setting goals or financial independence. However, the second crucial element to removing debt from your life is taking the temporary sacrifice of not gaining what you want now in exchange for long-term freedom. Sacrifices such as avoiding a meal at a restaurant, purchasing new gadgets, upgrading a car and other common expenses are purely emotional at best; overcoming the dreaded feeling of “missing out” today will eliminate debt in the future and become the foundation to your financial freedom.

Always pay yourself first. The moment your paycheck reaches your hands, pay your bills. However, don’t assume that all of your money is going straight to bills or savings. Take a percentage of your money and use it however you want; this becomes your “fun money”. Invest the remainder of your money toward paying off debt in a shorter amount of time to reduce the high costs of interests over a prolonged period of time; paying off a bill a single year soon can lead to thousands of dollars in the long run.

Learn to make logical sacrifices in place of emotional satisfaction. Learn to live in the future rather than satisfying yourself in the now. The path to eliminating debt from your life will cause temporary stress in the short term but give you the financial freedom of a lifetime.

Phase 3: Design the Life that you want to Live

Design the lifestyle of your choice as the final phase of mastering your personal finance. You can begin to focus on developing the lifestyle you wish to live once you’ve gained financial independence by eliminating debt and setting goals because the obstacles have been removed.

The lifestyle you choose to live should have no bounds. Choose to live in a location you’ve always wished to be present in, purchase the items (within reason) that you’ve set in your goals or travel the world and take the much needed vacation you deserve for making the temporary sacrifices. Life isn’t measured by the amount of assets you own but rather the quality of life you experience; unfortunately, debt and money has been the main obstacle in the way the entire time!

You will be able to control your budget and never again experience the stress from money with your finances controlled and a clear plan for staying in the positive. Life becomes easy once you have control over your financial destiny. The items and experiences you want will no longer be a luxury expense if you’ve gained control of your personal finance because every action in the future will reflect the goals and drive you’ve given yourself.

Conclusion

Personal finance is a topic that needs to be discussed with yourself and loved ones on a regular basis because it’s your education in the “system” that truly gives you the freedom to do what you want in life. Master your financial destiny and personal finances by setting goals, eliminating debt and choosing the lifestyle that is going to fit within your means. The path to your financial freedom will have hurdles and sacrifices along the way but if you choose to take the path you will build a long-term strategy for success.

 

finance management, debt, design life