The A.B.C.Ds of Financial Freedom…

The pinnacle of their financial hardship was that in order to complete some renovations on their house, the couple had amassed credit card debts of around $60,000 for which they now were struggling to repay.

Their story, like so many, is a sobering reminder that some of the basic financial concepts that many of us take for granted are still foreign concepts to many individuals trying to get ahead. And yet the foundations of financial literacy, such as the importance of maintaining a budget and the power of compounding interest over time, is being taught in schools well after our children are taught long division and Pythagoras theorem – bizarre isn’t it?

However, none of us are immune from falling into the debt trap at some stage in our lives so here are a few ways you can rebuild your wealth and relieve financial pressure – know your A.B.C.Ds of financial freedom:

1. Run your household like a business. Operate a budget to ensure more money comes in, than goes out, or at least that they net each other off.
2. Do not spend what you do not have. If you know your credit card cannot be cleared at the end of the month, cut it in half!
3. If you want something, such as a non-essential item, work out a savings plan to buy it once the money is in the bank.
4. To get ahead financially, you must spend less than you earn. If you are determined to do so, it’s time to begin setting some goals- like everything else in life. Determine how much of the mortgage you want to pay off in a year, or how much money you want in the bank and begin making adjustments in your budget to ensure you get there.

The above steps take one key ingredient, discipline. This is perhaps the hardest element to teach, but if you want something badly enough, you will find a way.