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Do you intend to remain earth-bound, mired in unpaid and ever increasing debts - or do you intend to break away and build security and ease of mind in financial matters? If you truly desire freedom from money worries then you must start now!

Nothing is as unsettling as that empty feeling in the pit of the stomach from looking at overdue notices, possible foreclosure, or unpaid credit cards as you watch your hard earned pay-check evaporate within hours after it is received. You set in quite desperation, head in hands, as you wonder where the needed money for tomorrow will come from. The anxiety builds and it seems as if your stomach will never settle down again.

People in desperation

Countless families across the United States spend their evenings bickering over money troubles as each accuses the other of irresponsibility. Families are ripped apart as relationships dissolve, creating mental anguish for themselves and their children. Surprisingly, the very family that is extremely concerned over their difficulties never seems to take any constructive action to eliminate the problem.

When people are asked, "Why can't you make ends meet?" They always blame their financial state on low pay or raising prices. Yet, wages earners making $5,000.00 per month often have just as many financial problems as those making $3,000.00. They never realize that instead of cash being stretched to meet needs, requirements must be curbed to fit income. It's a matter of income verses outgo, income must always be higher.

Develop a right mindset

The first step in becoming financial independent is in developing a mindset that encourages financial control. Then another crucial step would be to work out a reasonable and responsible budget. At the beginning, a schedule of payments may cause a few day-to-day hardships, but this is a necessary step in the fight for freedom. After major bills are eliminated, more cash will be available for investing in your future.

You must work out a plan in which you are able to pay yourself first. That's right, pay yourself ten percent of your gross pay, before anything else, This ten percent must be used to invest in yourself. You not only have to adjust and cover all present accounts, you also must prepare for the future. Plan a date in which you will retire. Twenty, thirty or forty years, which ever it is, you must be prepared. I know, it's hard to think of being sixty or seventy when you are only twenty five but believe me, it happens quicker than you think.

Plan for financial independence

Before establishing a plan, write down every expenditure for the past three months. Separate your fixed cost, such as rent or house payment, car payment, phone, etc. Next, carefully itemize purchases, and determine in what areas frivolous or nonessential spending was made. Where did you spend money that didn't need to be spent? This will give you a clear idea of what you have been doing wrong. Next, compute exactly how much money you will receive for the year after taxes, social security, heath care, etc. this is your net income. Your net income is your spendable income, the money you will use to live on. It sounds good to say you make $60,000.00 per year when in reality you can only spend $40,000.00. Don't make the mistake of budgeting to or spending to your gross income. Your real income is that which finances your reality.

Close all loopholes and get control of your spending.

If you bring home $40,000.00 per year then your net income is $3333,00 per month or $767.00 per week or even further, $109.59 per day and 13.70 per hour. Remember, this is your net pay, your spendable income.

Your Financial Launching Pad

First of all, compute your salary breakdown. Now compile a list of fixed expenses. As mentioned before, these would include health and auto insurance, any long term payments, food cost, and clothing expense. Deduct this total from your net income. You now have an accurate estimate of how much money is left after vital needs are taken care of.

Certain expenditures will come due only once or twice during the year. Car insurance, school clothing, winter fuel bills, and major hospital charges should be expected and planned for. Good budgeting means setting aside extra money ahead of time to avoid financial hardships. Subtract this last amount from your remaining income.

Personal Reserve

Some expenses such as dental or clothing, can be planned and adjust for. If a child should break an arm, or the car engine blows up, more money will be needed therefore, a "personal reserve" fund must be formed.

Save for a rainy day

Rather than spending all the cash that is left after necessities, a certain amount should be set aside and deposited in a savings account. It may never be required, and will be later applied toward retirement, education or home improvements. However, the peace of mind gained by having that extra asset can make life much more pleasant.

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