We all want financial freedom.
Are you tired of worrying about bills, not knowing where your money is going each month, or making less than you want?
In this article, I share 6 actionable steps you can take today to put yourself in a better financial position.
No more wishing things were better.
No more blaming others.
No more excuses and inaction!
You can do this. I promise none of these steps are hard!
I've made the time to do all 6, and my life is better because of it. There's no reason why you can't do the same.
Alright, here we go!
6 Simple Steps to Financial Freedom
1. Automate, Automate, Automate
Do you have trouble remembering to pay bills on time? Do you impulsively spend money that you should be saving?
If you can set stuff up to happen automatically, it makes managing your finances so much easier and way less stressful.
Here are some things you need to be putting on autopilot each month:
- Credit card payment
- Car payment
- Retirement account contributions
- Savings account contributions
- Insurance premium payments
- Mortgage (in most cases)
- Student loan payments
I started automating my finances about a year ago, and it has made my life so much easier. I am never late on a bill, I never “conveniently forget” to put money in my savings account, and I don't have to keep up with 12 different payment deadlines each month.
Another benefit of automating: many lenders will actually lower your interest rate if you automate your payments with them. For example, my car loan is 0.25% lower than normal because I set up automatic bill pay. Lenders like knowing they will get their money on time each month, so they incentivize borrowers to make that happen.
2. Start actually tracking where your money goes
I know. Budgeting sucks. I hate doing it just as much as anyone else, and I'm a finance nerd.
But do you know how much you're really spending each month? It's an important thing to keep track of, but most of us can't answer that question off the top of our head.
But again, technology has made the task of budgeting essentially automatic.
One platform that I really like for tracking everything all in one place is Personal Capital. Once you have a better idea of where your cash is flowing each month, you can start tweaking things and changing your behaviors so you have more money at the end of each month.
3. Refinance your student debt and pay less interest
Most college graduates have a lot of student loans weighing them down after they get their degree.
When I graduated from Virginia Tech, I had well over $10k in loans. Those loans were accumulating interest every day, the same way that credit cards rack up interest (and cost you money).
The good news is, there's actually way to pay less interest on your student loans.
Something that young professionals often overlook is the option of refinancing their student loans. This means replacing your current loan (at say, 7% interest), with a lower interest loan (perhaps 3%).
What does that mean for you?
A lot of extra money in your pocket each month.
The best part is, it doesn't cost anything to refinance. Lenders are essentially “competing” to take over your existing loan, which means they are usually willing to offer you a lower interest rate than what you are currently paying (otherwise why would you switch, right?).
To compare lenders and get the best possible rate on your student loans, I like and recommend LendEdu. This is a site that lets you get free instant quotes from the leading student loan refinance companies without affecting your credit score.
4. Make your money work for you by investing it
To take full advantage of money-earning growth that comes with investing, you need to start as early as possible (ie, now).
It's actually a lot easier to start than you might think- you don't need to be a Wall St. guru AT ALL to get your money invested and growing.
You might find these websites/apps helpful:
If you want an app that does it all for you: Download the Stash app
If you don't know the first thing about investing, the Stash app lets you start investing with just $5. Stash will even spot you $5 just to get started.
Stash instantly provides diversified portfolio options for you. From there you can set up the app to pull a few bucks a week from your bank account and start growing your money. It really doesn't get much easier than that.
If you want to invest in things that interest you, but still want to keep it simple: Motif
This is basically a slightly more hands on version of Stash, but it’s awesome for people who want more of a say in what they invest in, while still keeping things really simple. Over time, this is a really great way to grow your money.
To sweeten the deal, if you sign up using our link, Motif will pay you up to $150 to open an account.
If you're a DIY-er: I recommend TradeKing
In my experience, TradeKing has the most user-friendly platform for new DIY investors, and is definitely the best bang for your buck (opening an account is free, and trades are only $4.95 each; well under the industry average). They’ve also got a ton of free resources for you to use, too, which is great.
If you want something a little different: Lending Club
This is a website that lets you act as a lender and earn interest on your money by letting other people borrow from you . Essentially, YOU act as the bank, which is pretty neat. Lending Club is the world’s largest online credit marketplace connecting borrowers and investors. Definitely something worth looking into! Check out our Lending Club Investing Review to get a better idea of how it all works.
5. Get serious about adding a new income stream
You've probably heard somewhere that the average millionaire has 7 streams of income.
How many do you have?
I'm going to guess less than 7.
While not every stream needs to be a big one, you should consider spending some time to start a side hustle that earns you extra income.
There are all sorts of you can make extra money:
Start a Blog: This can be just a simple side hustle, or it can turn into something you can make a full time income with; it’s up to you. I’m a huge fan of blogging because I love writing and connecting with people all over the world (and I'm fortunate enough to make several thousand dollars per month doing it).
HostGator has one of the best comprehensive packages for getting started (at just $3 a month):
Do Online Surveys: Companies are willing to pay money to get inside the heads of consumers. Below are my favorite survey sites. They’re free to join and free to use. Pro tip: It’s best to sign up for as many as you can as that way you can receive the most surveys and make the most money. Swagbucks ($5 Free Signup Bonus), Survey Junkie (QUICKEST to start earning), MyPoints ($5 Free Signup Bonus), Earning Station, Survey Club, VIP Voice, American Consumer Opinion, QuickRewards, PanelPlace, Point Club, One Opinion, Harris Poll
Drive for Uber: This is a really good use of your time if you are trying to make some extra cash in a weekend. Here’s a signup link that gives you $100 after you give your first ride, plus check out How I Made $427 in 2 Days Driving for Uber.
Sell Your Stuff: Most of us are guilty of hanging onto things that we never use, myself included. Take a day and go through all your old stuff and get rid of some of it!
Bet on Your Own Weight Loss: What better way to lose weight than to avoid losing a bet? Sites like HealthyWage.com allow you to place a wager and make extra money when you successfully lose weight.
Download the Shoptracker App: They’ll instantly send you a free $3 Visa gift card, plus another $3 for every month you keep the app installed.
Use Swagbucks for Online Search: Swagbucks is a great way to passively earn cash and Amazon gift cards with very little work. They have a search tool, which is just like using Google to do your online searches, except you get rewarded “SBs” for the things you do through their website. Redeem SBs for rewards. And by signing up through our link, they give you a free $5. Boom.
You may also want to check these out:
- 3 Stellar Business Ideas Under $200
- 100+ Genius Ways to Make Extra Money
- How to Make an Extra $1,000 This Month
6. Get a better bank account
How much interest are you making right now from money in your savings account?
Hint: it's probably a lot less than you realize. Most banks offer a rate around .05% per year. Not good.
Some online banks, though, offer interest rates that are WAY higher.
How can they afford to do that?
Since the banks are online, they have much less overhead expense to pay for (like branch locations across the country, bank tellers, etc.). I recommend moving your savings to one of these online banks.
Discover pays its clients a hearty 0.95% annual percentage yield. This means your money will grow faster with them. And there are zero monthly fees and zero account opening fees.
(They have 24/7 customer service and a handy mobile banking app- both of which make the lack of physical locations basically a non-issue)
What will you do today to make your life better?
If you know somebody that needs some direction with their finances, please share this with them!
FREE Download: 5 Money Tools You Can't Live Without
This list just made life a whole lot easier.
You'll usually see me on here writing articles about how to save (and make!) money, how to make smarter investment choices, and how to have a better overall financial life. If there's ever a topic you'd like to see me cover, shoot me an email!