What does the Fourth of July mean to you? I love the Fourth of July for many reasons.  I especially love the concept of freedom, and how we as Americans turned that concept into a country. We believed we had the power to create “the land of the free”.  It wasn’t easy but it was achieved with hard work, determination and sacrifice.   And a plan.

The same concept can be applied to money management and creating your own personal version of financial freedom.  I truly believe that everyone—everyone, can achieve financial freedom.

Times have been difficult the last couple of years, and probably will be for some time to come.  But we are Americans; we have grit, determination and strength.  And with a plan, financial freedom can be ours.

What You Can Do:

You—and only you—must be in charge of your money. It’s not wise to rely on members of the real estate industry, the financial media, much less the financial services industry to provide you with reliable financial advice. You are better suited than anyone else (especially those with a vested interest in the decisions you make) to understand and manage your personal finances and investments. Only you must determine how you spend, save, and invest your money from now on. Do this by setting up a monthly spending and saving plan that is based on your personal goals.  Start with these three steps:

Step 1

Fire Your Financial Advisor

Yes this may sound extreme, but it is absolutely necessary.  Independent studies have documented that as a group, financial advisors not only underperform the market as a whole, they dramatically underperform the investment choices most people make on their own without an advisor (check out next week’s blog on this topic). The poor advice of financial advisors has been a key factor contributing to the disastrous (and largely avoidable) financial circumstances tens of millions of people now find themselves in. So fire them and invest for yourself using broad-based, no-load (no commission) index funds. You can also read more of my investment advice and my current assessment of the various investment markets.

Step 2

Have a Plan

Quick and simple, step by step guidelines for setting up your own personal financial plan are in my book, Money Smart. Use the tools there to decide how you will spend, save, invest and insure you are moving towards your financial goals. Everything you need is in the book and a really good retirement/financial freedom calculator is available on my website for free—so spend a few hours in the name of financial freedom.

Step 3

Take Charge of Your Spending

Now more than ever it is important to know and act on your personal priorities. It is imperative to write them down and shop only from your list.  Don’t needlessly break them with careless spending. Remember that every dollar is a trade.  Make sure that the money you spend supports your goals and priorities. Also, write down every single expenditure every day for thirty days. It only takes two or three minutes a day and the results can be quite revealing. Before the month is up, your mistakes, problems, and most importantly, the opportunities for saving, should become clear. Lastly, take the time to learn all the sales games businesses are playing that needlessly cost people thousands every year. These games are laid out in Money Smart so you can see to it that your money serves your own interest from this point on, and not the interests of others.

The forefathers of this country fought for freedom; now fight for your own financial freedom. Begin with these steps. Don’t be one of the 61% of Americans who live paycheck to paycheck. Celebrate Independence Day by taking charge of your money and setting up a plan to achieve financial freedom.