First Steps to Set Yourself Financially Free

Hi LinkedIn Community,?

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Did you know that personal finance is mostly about behavior—80% to be exact—and only 20% about knowledge? Many people tend to buy things they can't afford, and some might not be able to cover even a month's expenses if they lose their income. This can lead to increased stress and debt. So, how can one take control of their finances? You can take the first steps today by reading this insightful article! ?

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Step 1: Create a Budget?

Create a written budget that you follow and revise at least once a month. Ask yourself: Wouldn't it be better to know where your money is going instead of wondering where it went? This simple step is highly effective, as it allows you to track and manage your money.?

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Step 2: Start an Emergency Fund?

Next, consider starting an emergency fund. This fund should be easily accessible, preferably in liquid form, and used only for dire emergencies. Add the emergency fund to your written budget and gradually build it with the money you can afford to set aside. Everyone's situation is different, so if you have a lot of debt, here's what you can do:?

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Step 3: Reduce Your Debt to the Minimum?

Create a list of all the debts you owe, arranged from smallest to largest amount. Focus on paying off the smallest debt first. Once it's paid off, use the freed-up money to tackle the next smallest debt, and so on. Tracking your progress can help motivate you to pay back what you owe.?

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Step 4: Complete the Emergency Fund?

Once you're out of debt, consider using that extra portion of money to complete your emergency fund. Aim to save at least three to six months' worth of living expenses. This provides a stronger safety net and further protects you from financial setbacks.?

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Step 5: Start Investing in Your Retirement?

If you are out of debt and have an emergency fund, consider saving 15% of your income for retirement. It’s ideal to start as early as possible. In most cases, you'll benefit from compound interest, meaning you earn interest on both your initial principal and the accumulated interest over time.?

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Watch Our Webinar?

If you enjoyed this read, you might be interested in watching an insightful webinar hosted by one of our team members, discussing this topic in greater detail. Watch "First Steps to Set Yourself Financially Free" by clicking here. Feel free to share the link if you believe a friend or family member might benefit from this topic.?

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