My friend Bob Lai from www.tawcan.com wrote a blog post this summer about “7 money goals to hit by the time you’re 35” and I felt inspired to give my 2¢. I encourage you to check out his website (after you read this … of course). You’ll find his post HERE 👈 but what I love most is getting his newsletter where he shares ALL the info about his portfolio. I love snooping his income, what stocks he’s using + everything in-between. Sign up HERE 👈👈👈
Although his post was about being able to check off some specific things before a specific age, I thought I’d adapt mine a bit for you to check off some specific things you can do over the next 90 days (if you aren't already doing them). Therefore achieving some great financial goals, habits and traction over the next 3 months (regardless of age, net worth, income, blah blah blah).
When I ask people what is their #1 goal is when it comes to their finances, a very common answer is to “Achieve Financial Freedom”. Because I’m nosey + what to help you achieve ALL your financial goals - my next question is “what is financial freedom + how will you know when you’re there?”
I’d love to hear from you: what does financial freedom mean to you?
From all the answers I’ve heard over my career I think I’ve narrowed down it down to 4 things that would fall under the definition of "financial freedom":
Having an adequate emergency fund
Not having to check your bank account when you use your debit card
Knowing you’re saving enough for retirement
Being debt free
So instead of giving you goals to achieve, I’ll tell you what some simple things you can start NOW to get closer to “financial freedom”.
#1. Know how much you make + how much it costs you to live
There are some numbers that are easy to remember. Your favourite channel, the passcode on your iPhone, your annual GROSS salary, your monthly rental income. But if I were to ask you: how much gets deposited into your bank account every month? Or How much does it cost you + your family to live? Would you be able to answer that?
If the answer is no: let’s change that #adulting
On the left, tally up ALL your NET income. Everything that’ll get deposited into your bank account next month. Your paycheques, your partner’s paycheques, kid payments, government payments, side job payments, everything gets accounted for in that INCOME section.
Next, move on to your expenses. This is your autopay expenses. Any bill that comes out of your bank account automatically. Thinks like mortgage, rent, property taxes, water, heat, electricity, Net Flix, child care, cell phone, subscriptions, car payments, student loan + other debt repayments. That all gets listed on the right.
Then in another column, you list out all the monthly savings contributions you make. Things like emergency fund, retirement, savings for fun, vehicle + home maintenance, savings for Christmas, etc. Whatever you are squirrelling money away for regularly, break it down and total it up.
That is what you have for the month to spend on things you usually use your debit card for. Things like fuel, groceries, hobbies, eating out, kids activities, etc.
So how much does it cost for your family to live: the total of your auto pay expenses + the balance of what’s left for everyday spending.
#2. Have savings that grow + Savings you CASH IN #yolo
To get closer to financial freedom you need to save #thankscaptobvious But I have another word that we have to remember: balance. It’s important to plan for your future, but it’s also important to live your life now. Financial freedom doesn’t have to be something that you are continuously working towards. Financial freedom can mean going on a family trip without dripping into your line of credit. Financial freedom can mean helping out a friend or family member without having to sacrifice your own family’s lifestyle.
It’s all about perspective and keeping in mind that financial freedom doesn’t HAVE to be about retirement or the liberation on knowing you aren’t relying on a paycheque.
#3. Say goodbye to debt
Debt is heavy. Debt can also be a very useful tool, but in short… Debt sucks. It’s like a fire extinguisher. You want to have it ‘just in case’ but you never want to have to use it. But as we move through various stages of life we find ourselves using it, recovering from using it, using it again, feeling tempted to use it, it’s a crappy cycle.
For most, financial freedom is not achieved if you still have some debt payment hanging over your head. So that’s why it’s important to get this debt freedom goal structured and communicated. If becoming debt free is something that’s important to you, you have to create some guardrails and goals that everyone is aware of. Like: “I want the line of credit to be at $3,000 by June.” or “I never want a vehicle payment again” or “we aren’t using the credit card anymore” and then you need the willpower to stick to these. #TeamWork
Tracking your savings + debt and setting the goals is SO SO SO helpful. From my experience when people have a plan, know the numbers and dates they tend to excel even quicker than expected. When I’m working with a couple and I tell them that based on their numbers it is possible for them to become debt free by a specific date - they are so motivated and accountable that 3 months before that day they call me and say “WE DID IT”!! Telling me their exciting news that they paid off their debt.
So what’s your #1 goal when it comes to your finances? Financial Freedom? What does that mean to you? In short the starting point is AWARENESS. Knowing your lifestyle cost. Knowing you have savings for now + later. Knowing the date you’ll be debt free.
If this awareness would be helpful for your family in reducing any finance related stress, that’s why I did the FREE workshop: “Setting up your systems + processes for getting organized and your family's finances on track”. Get access to the replay of the FREE Workshop + the workbook go to: https://www.meghanchomut.com/september. We go over these steps, along with some useful planning tips, savings rules of thumb and grocery shopping tricks!!