Step 55: Discuss Finances with your Partner

Step 55 of the 100 steps to financial independence: Discuss Finances with your Partner
Step 55: Discuss Finances with your Partner

I admit that this step should have probably been way earlier on in the list, since if you share your household and finances with your partner, then discussing money matters and making sure you have the same short-term and long-term goals in mind is essential to not only achieving your financial goals but also keeping your relationship healthy and happy. At the end of the day if you are trying to save, invest or grow your capital whilst your partner is more of the “let’s spend it all now” school, you likely both wind up frustrated with each other, meaning both your financial goals and your relationship happiness will take a hit and suffer at some point.

Sad but true: finances and a lack of shared financial goals or financial compatibility are not uncommon reasons for people to end a relationship, so let’s get this sorted once and for all and make sure that you and your partner discuss your individual and joint financial beliefs and goals. You might not have exactly the same ideas about how to spend or save your money, but discussing will at least create more understanding and hopefully pave the way to an agreement that satisfies both and leaves some (financial) room for both to do your own thing.

Of course it might be that your partner is not into finances at all and is happy for you to take control of the (majority) of the money decisions and responsibilities. If that is the case, it might sound easier in the short-term to simply assume that role not inform or even consult your partner, but remember that long-term this might not be in the interest of neither your relationship nor of your finances. Continue reading

Step 25: Start a Monthly Finance Review

Step 25 of the #100stepsmission to financial independence: Start a Monthly Finance Review
Step 25: Start a Monthly Finance Review

In step 18 we looked at starting a weekly finance review and what to focus on during that weekly half an hour, to ensure you stay on track for that month’s spending, bills and goals.

Today we are going to take this one step further, by starting a monthly finance review, in addition to your weekly review. Whereas the weekly review is incredibly useful to ensure you achieve your monthly goals, the monthly review helps you to achieve your longer term goals that you set out to achieve, such as becoming debt free, getting to a certain net worth or saving a specific amount of money. It is the moment to plan and look ahead a little further and to readjust your goals and spending patterns.

During most months you can probably combine every fourth weekly review with your monthly review, although for your monthly analysis you will need to set aside more time, as you are analysing the entire past month and also looking further ahead. I recommend scheduling in roughly 2 hours every month to complete this step.
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Step 24: Become debt free

Step 24 of the 100 steps mission to financial independence: Become debt free
Step 24: Become debt free

Becoming debt free might or might not have been a goal you identified when you put together your principal financial goals in step 2. Whether this was the case or not, you hopefully have realized that becoming debt free is possible with some extra effort and money, and in your interest (no pun intended) if you want to avoid paying the extra costs of oustanding loans. It might take you three years, 10 years or 20 years, but being able to say you have finally paid down all your debts is a huge achievement. And as we saw in the last few steps, the time it takes to pay off a debt can be sped up incredibly by making extra payments.

The next part of your mission and the main focus of this current step is for you to set yourself goals to pay off your debts. You will set yourself a target date to pay off the first debt that you have already started working on, then for each and every other debt you will do the very same, all the way to the very last debt you will be attacking. That will be your target date to becoming completely debt free. Continue reading

Step 18: Start a Weekly Finance Review

Step 18 of the 100 steps mission to financial independence: Start a weekly finance review
Step 18: Start a Weekly Finance Review

Step 18 is all about starting a new and incredibly powerful habit, one that will allow you to focus on your mission, realign your spending and savings patterns to your goals and get closer each time until little by little one day you tick off your first goal, then your second one, your third, until you realize you are able to hit your goals one after the other.

This new super habit is starting a weekly finance review, during which you will go through your goals and some of the main steps we have covered up til now, and when you work your way through the next 82 steps that are still to come, you will add some of those steps to your weekly review too. In that way you consistently hold yourself accountable for your success as you review whether you are on track (or not) for the rest of the month, and what adjustments need to be made in order to make sure you will achieve your goals for the month, and with that ultimately those much desired long-term goals.

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Step 12: Identify your Savings Expenses

Step 12 of the 100 steps mission to financial independe: Identify your Savings Expenses
Step 12: Identify your Savings Expenses
So one last one to go: your savings expenses. Saving expenses are any expenses that you have that are related to improving your financial situation now or in the future. They are payments that you make towards your financial goals and include debt payments that you are making to pay off a loan, savings plans that you are paying into, investments that you are making and any emergency or rainy day funds that you have.

When you were looking at your fixed expenses you might have been wondering what to do with these savings payments already, or you might have even included them, as many of these can look like fixed expenses that you have monthly. The reason why we want to take these out and identify them as a different category however is that they are generally very different in nature to a fixed, variable or discretionary expense, as they are focussed on achieving a financial goal, as opposed to the other categories. Continue reading

Step 5: List your Assets

Step 5 of the 100 steps mission to financial independence
Step 5: List your Assets

Now we know exactly what our debts (or liabilities) are, in this step we are going to look at what our possessions (also known as assets) are. Assets add a positive value to our financial status: they are the things that we own and therefore add a positive value to our balance sheet.

Making an overview of all your assets, will not only allow you to know exactly how much you own at present, it also gives an insight into what you might be able to do in order to increase the number or value of your assets, thereby increasing your financial value.

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Step 2: Set Financial Goals

Step 2 of the 100 steps mission to Financial Independence
Step 2: Set Financial Goals

One of the most important steps you can take towards becoming financially independent is making clear what your goals are. There is nothing more powerful than having a specific end objective that you are working towards to. Without stating your goal it is easy to give up after only a few initial attempts as you forget why you started this journey in the first place and because you have no way of measuring whether you are any closer to your target.

Numerous studies have furthermore shown that if you write down your goals you significantly increase your chances of ultimately achieving them, with some studies saying the likelihood of success increases by as much as 50% or more. So it is definitely worth stating your goals if you want to really achieve success on this mission! Continue reading