It really can put your spending in perspective. This might not be the most exciting thing to do, but is CRUCIAL and actually does get more exciting the more money you are making (and seeing your investments grow!) Knowing where your money is going is more important than budgeting – it’s about accountability and adopting an optimization mindset. All your spending should be tracked methodically. Whether this is student loans, bills, food, entertainment, etc. Track Your SpendingĪfter you start tracking your net-worth, you need to track where your money is going. I strongly recommend signing up for Personal Capital today and begin automatically tracking your net worth each month.įor more details on net worth tracking and why this number is so important, see our full post here: Net Worth Tracking. One of the best (and FREE) financial tools to help track your net worth is called Personal Capital. It doesn’t matter how much money you make or how much money you save if your net-worth isn’t increasing year over year. Your net-worth is calculated by subtracting your liabilities (debt/what you owe) from your assets (what you own that has value, your cash, and investments). While your income, your savings rate, your investment returns, your debt to income ratio, and all those other numbers are important when optimizing your money, the single most important metric that you should be tracking is your net-worth. I’ve also included other valuable links and resources for further reading of each step in the process. “Financial freedom means not having to worry about money.”Īnyone can turn their financial life around, and below are 9 steps to financial freedom. In This Article 9 Steps to Financial Freedom With the path I have set for myself, I’m planning to achieve financial freedom and pursue early retirement in less than five years. So I am proud of how much I have accomplished so far. While it may not seem like a lot, a majority of my millennial friends have far less, and there are plenty of people much older than me that also have very little in savings. I take screenshots of my bank account like Grant did to visualize my progress!
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