In order for one to be successful with finances, one must have a budget plan. Dave Ramsey shares steps to achieve financial goals. It requires determination and consistency. This paper will discuss the principles that one must follow in order to achieve financial freedom. What is financial freedom? Different people may differ in opinions on the definition. According to Dave Ramsey, financial freedom is becoming debt free in order to be able to bless others with one’s resources. One starts the budgeting process by setting financial goals.
Financial Goals and Objectives
Goals may vary depending on the stage of one’s life. A common goal for individuals who are seeking to budget is working towards a debt free future. Steps would include, an
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In August of 2014, my family joined the financial peace university class, which consisted of a nine week course. Where topics such as cutting expenses, utilizing cash instead of credit card or debit card, the importance of an emergency fund and other topics that helped us set realistic goals that we will be able to achieve in short and long term. The first exercise given to us in the class was to document our expenses and as a result, we identify sources where we could save, for instance, car insurance, utilities and food. We made changes and we saw results. The Budget and proposed budget on Appendix A shows the new rates since we have been working on this for years; there is no change between the two because we have been proactive minimizing our expenses and maximizing our profit. The result is evident in the positive bottom …show more content…
We enjoyed the vacation because we knew there was no debt baggage to come back with us. We practice saving to spend. In other words, if we do not have the funds, we will not spend. People might view the budgeting process as restrictive; however, it is liberating. Once one sees the progress one is making to get out of debt, it is the most amazing feeling to know that you are working towards a goal. At times one might have to wait for something he or she really wants; it only brings a feeling of satisfaction once one reached the goal of making the purchase free of debt. The budget has also helped my marriage, the majority of divorces are over finances, and I believe that couples who budget together stay
In Dave Ramsey’s book titled The Total Money Makeover, he outlines seven baby steps to achieve financial freedom. They are as follows: first, build an emergency fund. Second, Pay off all debt except for your mortgage. Third, save enough to cover 3 to 6 months of living expenses. Fourth, invest for retirement. Firth, save for your children’s college fund. Sixth, pay off mortgage early. Finally the seventh step, build wealth and give. I am going to discuss the five steps that I thought were the most important.
After reading this book, I learned that financial independence is not based on how much you earn, but it is based on how much you spend. This book completely changed my thoughts on saving and investing. Generally, I pay my monthly expenses first and save/invest what is left. Now, I am going to pay myself 8% every month and pay expenses with what is left. I plan to eliminate all unnecessary expenses.
Budgeting is a familiar term to most American families. Dictionary.com defines budgeting as an estimate, often itemized, of expected income and expense for a given period in the future. In order to avoid debt, bankruptcy, or overspending it is common to create a spreadsheet of some sort tracking your spending and income. On a grander scheme, the Unites States has to budget as well.
Based on your Daily Spending Diary, describe actions that you might take to identify and achieve various financial goals.
Making improvements on our financial literacy results in a wave of impacts on our economy and the financial health in our society because of responisble behiavior with our finances. These modifications to our behavior are neccesary because it let's us address primary cultural problems, for example over-credits on your purchases, mortgages possibly resulting in debt, dealing with expectations on inflation and also planning on your retirement.
Financial Literacy needs to be introduced to our future Americans. Financial Literacy is having to do with knowing how to save, spend, and manage your money. Without knowledge about financial literacy Americans with become broke at a younger age. Teaching students in the classroom about this topic will help them become more successful when it comes to their financial decisions.
“Money doesn’t grow on trees.” said almost every parent on Earth . Budgeting was going to be very hard, but this is how we learned to stay under a budget, we learned all about having a job, it surprised us all when we had to prepare and follow a budget, and it affected us in many ways. Once believing that our parents were just being plain mean, but now it could be fully understood by us. You would have thought after years of this quote being recited almost every week we would have caught on, but a history project taught it to me.
Freedom – it is one of the most essential, ever-present, and controversial themes in both literature, and throughout the world. Every day we exercise our freedoms without giving a thought as to how lucky we are to have the freedoms that we do. So what is freedom really? Equality, rights, democracy . . . these are all ideas that come to mind. But what are the essential principles of true freedom? True freedom is constituted by safety, the ability to freely express oneself, and the right to live without oppression from government.
Before you can even dream about saving money you must first create a budget and find out where all of your money is going. This doesn’t mean you have to count every penny you spend every day, just sit down and take some time to track your money and decide where it all goes and which bills are more important tha...
My goal is the final destination of my financial success. It is to be able to pay bills without worry, be free of debt, have enough money for my kids to go to colleges and help other people with my financial resources.
As time goes on, you will find that your original budget has some slaws. Some areas of budget planning might be overestimated, and some areas might be underestimated. Some of the flaws in budget making, for instance, are unemployment because if a person gets unemployed he has to have a strict budget to follow. For example making home food and not going out because that will result him in debt. Some of the other flaws are increase in rent, increase in car insurance because of accidents occurring, credit card payments, groceries, and eating out with friends. All of these flaws can cause a person to be more in debt and cau...
INTRODUCTION: People misquote that money is the root of all evil, but it is the love of money that is the root of all kinds of evil. The world has fallen into the belief that simply having and loving money will be the cure and fix to all; this belief has sent our country into a downward spiral of indebtedness and greed. My dream is to help those who can’t help themselves; those who were once blinded by this belief and have regained their vision and want to get back on the right track. My ultimate goal is to become a budget coach for businesses and families, guiding and teaching them how to manage their money instead of their money managing them. While money management skill are needed everywhere, I would prefer to stay local. There is such a need for this kind of help right here in Indiana that I would feel
Financial planning involves short and long-term investment strategies. A short-term strategy is one that an individual would want to see results in one to two years. “Most investment advisors say your first short-term goals should be getting your financial house in order by eliminating credit card debt and establishing a rainy day fund” (Mutual Fund Store, 2014). Mutual Fund Store explains that intermediate-term and long-term goals includes buying a house, starting a business, and retiring according to each person’s own schedule and lifestyle. Prior to saving and investing for one’s...
There are four stages to the evolution of banking from use of commodity to a modern free banking system. George Selgin's article "The Theory of Free Banking: Money Supply Under Competitive Note Issue" explains the four stage process; starting with, the storage of commodity money, development of banks, issuance of notes, and the formation of clearing house associations.
The public can every now and again use some of the money set aside to purchase luxury items, or enjoy a family vacation. Depending on one’s income experts the amount they are able to indulge in “fun spending.” Budgeting is key when saving to spend on this type of occasion because going overboard can push you to start the whole saving process all over again. Saving is important for all aspects, and it also helps one to enjoy the quality of life when spending for fun.