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Financial independence,
Step 1: Assess your situation
There's no time like the present to begin ensuring
your financial security. If you want to get ahead financially, you
need to understand where you are now. Examining your past money
habits and attitudes will start you on your way to financial independence.
Getting started is the hardest part --
and for good reason. We know that money management can seem frightening
and painful.
How many times
have you heard these phrases?
Pinch your pennies
Tighten your belt
Cut back
Crunch the numbers
Stretch your dollar
With all that pinching, crunching and
stretching going on, it's no wonder people think that managing money
hurts.
However, it's a myth that managing your
personal finances has to be painful or difficult. Even if you have
too much debt or are overwhelmed by investing choices, you are in
control.
It's your money. It's your life. You
have choices. You can make it happen.
Stop and face your
finances
It's time for a long, deep think. Don't
panic. This is the thinking and learning
stage. (In other words, no math.)
It's true that a lack of knowledge about
your finances can be more damaging to your monetary well-being than
a low-paying job or bankruptcy. Ignorance is not bliss when
it comes to your cash. It can be the difference between someone
with a good salary living like a pauper and another person with
less income enjoying an easier life.
Educate yourself about your money and be aware
of your choices, past and present. Think about how you've handled
money in the past. You can find your own lessons to be learned.
Perhaps you were too quick to sign up for a sweet car lease deal
that started stinking after a dozen payments. Maybe you lost track
of your checkbook balance and bounced a few. Or, on a positive note,
maybe you're in the habit of checking sales in the paper and researching
a product before making a careful purchase. (Give yourself a pat
on the back.) Celebrate the positives -- and learn not to repeat
the negatives.
Ask yourself these questions:
How do you handle money?
Are you happy with the way you and your
family handle finances?
What are some problem areas?
What are your attitudes about money?
Have these attitudes helped or hindered
your money management?
Do you feel secure?
How do you feel about how your financial
life has been going?
Be honest with yourself -- what have you
been ignoring?
What financial matters make you the most
tense?
What financial matters do you feel you handle
well?
What financial matters would you like to
know more about?
What can you learn from your money mistakes?
What can you learn from your financial successes?
Do you know how much money you're making?
Equally important, do you know how much
is going out?
Now that you're motivated, it's time
to be proactive about your dollars and cents and proceed to Step
2.
Updated:
June 13, 2002
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