10 STEPS TO FINANCIAL FREEDOM By Christina Mae Olson, CFP®

People ask me for ideas and general guidelines to help them meet their financial goals. These 10 Steps to Financial Freedom will introduce you to some of the very basic tools to building a secure financial plan.

10 STEPS TO FINANCIAL FREEDOM

  1. Live beneath your means (spend less than you earn).
    • If you don’t have it – you can’t spend it.
    • Don’t go into long term debt – you can’t afford it if you can’t pay cash for it.
  2. Pay off your debt in full.
    • Own/use only two credit cards.
    • Pay off your credit cards in full each month.
    • You can’t afford to buy it if you can’t pay it off when your bill comes.
    • Never finance a car for more than 3 years.
  3. Accumulate 6 months of living expenses – keep in a cash account.
    • This is your emergency fund.
  4. Contribute to your employer retirement plan.
    • Start by saving 10% of each paycheck.
    • Increase until you are saving the full amount allowed every year.
    • Invest in low cost stock mutual funds – for long term growth.
  5. Fund a ROTH IRA.
    • ROTH IRA’s are the only retirement income that will be tax-free.
    • Contribute the full amount allowed every year.
    • Invest in low cost stock mutual funds – for long term growth.
  6. Save for your children’s college in a Section 529 College Savings Plan.
    • No kids or grand kids? Put this extra money into paying off your mortgage.
  7. Pay down/off your mortgage and student loans.
  8. Make charitable contributions – to the cause/s of your choice.
    • Giving away your money will help you accumulate more for yourself.
  9. The rest is yours – for the rest of your life!
    • Short term savings (less than 5 years) – in cash accounts.
    • Long term savings (more than 5 years) – invest in stock mutual funds.
    • Do the math – are you confident you can attain all of your goals?
  10. Enjoy your financial security and freedom!

Chris Olson is a Certified Financial Planner™ practitioner with a fee-only private practice. You can reach her at 608-525-9818 or CMOney@centurytel.net.