Part 2: Define Your Starting Point

Get your FREE sample of the 100 Steps to Financial Independence Book here

After setting your goals to Financial Independence, the next part of your journey is to determine your current starting point. With those two things together, i.e. where you want to get to and where you currently are, it’ll be a lot easier to plan out how to achieve your goals.

Part 2: Define your Starting Point

One common obstacle to achieving financial independence is consumer debt. Most people have some type of debt they have to deal with and pay off, such as student loans, credit card debt, car loan and / or a mortgage. The first step in determining your starting point is to list all of your debts with their current outstanding amounts (i.e. what you still owe) and then total those amounts to get an overall amount.

While debts represent the negative side of a financial picture, most people also have a positive side: their assets or possessions that are worth something. This can include anything from a house to a savings or investment account as well as antique or art of a certain value. Do the same as what you did with your debts: list anything you own along with its estimated value and total those amounts.

With these two numbers you can now calculate your net worth: a very useful indicator of how healthy your personal financial situation is. Simply take the total value of all your assets, then subtract the total amount of debts you have to find your current net worth. Note that this might be a negative number!

Lastly as part of determining your starting point, it’s a good idea to get a solid overview of your current expense patterns. Not only does this help to see where your money is going, it will also come in useful when you start setting goals later on in your journey for the various financial areas we’ll be looking at. Start logging your expenses on a daily basis to get a good idea of what you spend your money on.

Find some time today to look at the tasks above to complete to keep progressing on your path to Financial Independence!

The above is an adaptation of part 2 of the 10 parts in the guidebook to Financial Independence100 Steps to Financial Independence: The Definitive Roadmap to Achieving Your Financial Dreams where you can find more details as well as action plans and guidelines to each of the 10 parts. Available in both ebook and paperback format!

Coming up next: Part 3 of the Journey to Financial Independence!

Part 1: Set Your Financial Independence Goals

Get your FREE sample of the 100 Steps to Financial Independence Book here

When you start your journey to financial independence there’s a lot to consider and go through. There might be many new things you’ll end up learning about or just points you had never really thought about before.

To avoid you feeling overwhelmed and to provide some structure to your path to FI, I’ve divided the many topics into 10 smaller parts, to help you get started on your journey to Financial Independence.

Part 1: Set your Financial Independence Goals

Before you set out on any new adventure, it’s often helpful to take a step back and think about why you are embarking on that new mission. What are you trying to achieve?  What aspects of your current situation are you not as content with and would you like to change? How would your life change for the better? Once you know why you are starting  this new journey, it’ll work as a motivator to get back on track anytime you find yourself veering away from it.

Once you know your reason, it is equally important to define what your new situation would look like when you get there. What is your end goal? What are some of the milestones that you would need to achieve before reaching that final destination?

It often helps to state your objectives as clearly as possible and to visualise exactly what that would look like. Instead of thinking you would like to have more money, define why you want that money, how much you want, what you would do with it and picture what your life would look like.

Here is an example of what that might be:

“I want to have more money so I can spend more time with my family being outdoors. In particular, would need X amount of money to buy a small condo in the mountains. During holidays and for long weekends we can just drive up to our second house and enjoy our time together out in nature.”

Lastly, an important aspect of part 1 of your journey is keeping track of your progress to financial independence and motivating yourself to stick to your targets. You can do this by creating a vision board with your goals, by creating a tracker of your progress as well as by celebrating each time you reach one of your smaller milestones along the way.

Find some time today to look at the questions and guidelines above and then note down some of your answers to them to get you started on your path to Financial Independence!

The above is an adaptation of part 1 of the 10 parts in the guidebook to Financial Independence100 Steps to Financial Independence: The Definitive Roadmap to Achieving Your Financial Dreams where you can find more details as well as action plans and guidelines to each of the 10 parts. Available in both ebook and paperback format!

Coming up next: Part 2 of the Journey to Financial Independence: Define your Starting Points

Book Release: 100 Steps to Financial Independence

1541328964After almost three years of having been “in the making”, the 100 Steps to Financial Independence Book is now almost here! This action-oriented, easy-to-follow and motivational book will be your number 1 go-to-guide to start pursuing Financial Independence now and live the life you truly want!

Sign up to get your free copy now and be one of the first ones to receive it straight to your inbox or mobile reader device as soon as it’s released. (Expected release date: October 2018).

Level 3: Tracking My Expenses

Level 3: Track Your Expenses

The What, When, Who, How and Why of tracking your expensesThis post describes how I started tracking my expenses and what tricks I used. If you’d like to read more about the task itself, have a look at Step 3: Track your Expenses where I describe the procedure in more detail.

Some of the links below are affiliate links, meaning that – at no additional cost to you – I will earn a commission if you click through and make a purchase.

After making some initial progress towards Financial Independence and after having remained on level 2 of the process for a while trying to identify my goals of this mission, I am ready to move on to the next level of this journey: starting the third step and registering all of my expenses.

I know that having a list of all my expenses will be an invaluable resource during many stages of this mission, as many of the steps will rely on a detailed insight of what comes in and what goes out every month, so I am totally committed to start keeping track of everything that happens with my money.

The infographic on the right tells you more about which factors to consider when registering your expenses.

What

I’ll be registering all my cash, credit card, debit card, transfers, standing orders and other payments from my checkings and savings accounts as well as any payments from the joints accounts I have with my husband.

When 

I am going to try to register any expenses in the moment as much as possible, but of course I know there will be times I’ll forget and I have certain payments automated, so I’ve decided to take 5 minutes at the end of each day to check I’ve registered everything, by looking through my wallet for receipts and logging into my checkings accounts. My savings account I’ll check just once a week as I know that currently only has 2 movements a month: when I get my interest and when my automatic transfer gets in. In this way I know I am least likely to miss out on any. I have a reminder in my bullet journey to make sure I do this every evening.

Who

My husband is sooo not going to register his expenses so I know there’s no point insisting. He has his own individual accounts that he is of course responsible for so I won’t get involved in that or ask him to track his expenses, but for our joint accounts I will keep track of things. Where possible I’ll ask him to pass on receipts but I’ll probably just log into our account daily to check what’s happened and to ask him in the moment if I need to know more about a particular expense.

How

I have tried different options to log my expenses and I have in the end decided to go for YNAB – short for You Need A Budget. I love it as it is a relatively easy to use programme and it also has several more advanced features that you can decide to start looking into more once you get the hang of the programme. YNAB can be used both online on your computer as well as by downloading its app and that for me is a key necessity as I’d like to be able to insert expenses both on to go in the moment as well as when I am sat at my desk.

Of course if you’d rather stick with paper and pen option that is no problem either and the advantage there is of course that you don’t need any type of technology to keep up your new habit.

Other alternatives include using a digital programme such as Microsoft Excel or Mac’s Numbers to track your money as well as other apps widely available – just search for them and see which one you like best.

Why
My own main why is that I want to gain insight into my spending pattern so I can identify where I can save money in order to boost my savings for long-term goals I have, the most obvious one being reaching Financial Independence of course.

These are my own 5 key strategies to tracking my expenses. If you aren’t already tracking your own expenses, make sure to start today and read up about it in the detailed explanation in step 3: Track Your Expenses.

Level 1: My Commitment to Achieving Financial Independence

Step 1_ Commit to your mission to Financial Independence

Once I had decided I wanted to become Financially Independent, so that I could regain more control over my time and future, I was aware I had to make the following step: a commitment to my journey, a first advance towards the next level on my way to my ultimate goal of financial freedom.

In order to move from level 0 – my starting point – to level 1, I had to take full responsibility for my progress and dedication to that journey, to make sure I wouldn’t give up on it halfway through.

Following the 100 steps that I have laid out previously on this website, Step 1 is making a commitment to your mission. With the various ideas suggested in step 1 in mind, I have decided to do the following:

1. A sticky note

I’ve put a sticky note on my bathroom mirror. In this way I can see it several times a day, and especially in the morning, to remind myself of my mission. It currently says: “On a mission to Financial Independence.” but I might change the wording with time. You can find a picture of it here on my Instagram account.

2. An accountability partner

I have in fact found several accountability partners: myself and 5 others have formed an accountability group in which we have set ourselves a big as well as five small targets we’d like to achieve over the course of a year. We meet once a month to give updates and ask each other critical questions to provoke honest answers and make sure we live up to the targets we have set and to help each other remain motivated and on the right track. I’ve also got a weekly check in meeting with my partner to discuss progress on some of our targets, including my goal of achieving financial independence.

3. Use of social media

With the upcoming launch of my 100 Steps Mission to Financial Independence book (around June 2018), I decided I’d probably need some social media presence anyway, so I am currently using my Facebook, Twitter, Instagram and Pinterest accounts to put together interesting articles and images to do with Financial Independence and Money Wisdom. In that way I am not only letting others know about my journey, I also hope to inspire people to aim for more financial freedom.

4. My bullet journal tracker and diary

This is the one I am most excited about, as I really believe in the power of a tracker to keep your progress visual. I also find my bullet journal really helpful and motivating to use, so I have decided to get a new bullet journal that I use specifically to keep a log of my steps towards financial independence. I have started with a tracker for step 1, which is an overview of 100 steps, with each step represented by a square, that I will fill or colour in every time I have successfully implemented or completed a step. You can again find a picture of it here on my Instagram account. If you would like to get a free copy of this tracker, leave your email below and I’ll send you an email with a free download that you can print and instantly use!

5. My cat

I can’t finish the list without also including a special mention to my cat, Monkey, who ever since I started working on putting together my 100 steps, has always been faithfully sitting next to me, in front of me, right on top of my laptop, sprawled along all of my papers or in any other way close to me…. You can see her here “supervising” me writing this current blog post here. Whenever I work on the 100 steps she is there with me, keeping me accountable I guess!

And there you have my 4 (or 5) ways of committing to my goal of becoming Financially Independent. For more ideas or if you’d like to read more about the very first step of the 100 steps mission, check out this description of step 1. Remember also to leave your email below to get a free copy of the 100 steps tracker sent to your email.

I’d love to hear about your commitment or ways of making sure you will stick to your goal, so please let me know in the comments below or by posting a photo on your favourite social media.

Level 0: The start of my mission to FI

The beginning of my journey to create more freedom.

More freedom

Over 2 years ago I decided I wanted to have more freedom. Freedom to choose what I wanted to do with my time. Not having to get up super early day in day out to go to work, spend all my productive time in an office, work extra hours whenever this was needed (and working in education means there are ALWAYS extra hours needed!), to then come home being too tired to do stuff I actually enjoyed.

It’s not that I didn’t like my job, quite the opposite: I got (and still get) great please out of it and am able to shape my role in many ways. But whether I enjoy my job or not is not relevant: I decided I didn’t want to spend my entire working days for the next 35 year of my life in an office.

I wanted to be able to be more in control when it comes to my time. Being able to decide every day how long for, what to work on or whether to take a day off and go for a hike or a swim or a snooze or a picnic in the park or…. there are so many other things to do..!

Once I had determined this, an obvious problem arose:

“HOW TO CREATE MORE FREEDOM?” 

As I started reading more about my desire to create more freedom, I quickly found out that the best way to do so and get more control over your own time is by becoming Financially Independent. When you achieve Financial Independence, you have access to enough money coming in from passive income streams, that you no longer need to rely on your job’s income. Meaning you don’t need your job to pay your bills, which means that you can decide to do any job you want (or not) regardless of how much it pays. (There are in fact 8(!) stages of financial independence, you can read more about that in this article). Simply put, if you achieve financial independence, you no longer need to rely on working a full time job, which means you can free up a lot of extra time and freedom to do as you please!

Once I had the answer to the first question (how to become free) figured out, a second question emerged however:

“WHERE DO I START?”

This is where my search for a comprehensive guide began that would show me how to attain this freedom I dreamt about. As I learned with time, there are thousands of people out there who have the same aspirations to become financially independent and many others who have in fact already achieved this, yet the guide I wanted explaining how to do it all didn’t exist!

I looked everywhere on the web, Amazon, physical bookstores, podcast libraries… Nothing! No A-Z guide, 30 day challenge or 100 steps blueprint on how to become financially independent.

The 100 Steps Mission Book

Not wanting to give up my dream I decided that if that manual I was looking for didn’t exist, then I’d put it together myself. I wasn’t talking about WRITING a book, but about compiling ideas together that would be the substitute for what I was looking for.

Long story short… I DID end up writing a book. And as you might have guessed it became the 100 Steps Mission to Financial Independence. (I’m currently working with my editor to get it ready for publication.)

It’ll be out soon and I am convinced it can help many people looking for the same answers that I was looking for 2 years ago: how to get more freedom? More time to spend with my family? More time to travel? More time to do my hobbies? More time to volunteer or pursue a passion project? More time to…. to do anything you want really, without having to plan it around your busy work schedule and commitments! It will give you all the answers you are looking for and is a step-by-step guide you need in order to create that life you really want.

Until it’s out (around June 2018), I’ll be documenting my own experience implementing these 100 steps on my way to more freedom, so you can see how each little step has helped me get closer to my target of more freedom every day. Feel free to join me on this mission to start creating more time for you and your family too and let me know how you’re doing in the comments below.

Coming soon: 31 Day Challenge to Financial Excellence

31 Day Challenge To Financial Excellence
31 Day Challenge To Financial Excellence
31 Day Challenge To Financial Excellence

Are you looking to give your finances a quick make over? Do you want to learn about the 31 most important financial steps you can take right now to kick your money management skills into high gear? Would you like to become more financially organized but do you have no idea where to start? Could your current financial status do with a health check?

If so then join me for the 31 Day Challenge to Financial Excellence, starting October 1st 2017! During these 31 Days you will be given a challenge or task to complete each day that will bring you one step closing to Financial Excellence and Success.

During these 31 days we will cover a huge range of topics: expenses, debt, savings, pensions, income, investing, financial security and many more!

There is no need to read dull money books or spend hours learning about complicated financial concepts, each day’s challenge has all the information you need to get you started!

Sign up now and you will automatically receive each challenge delivered to your inbox on October 1st! Make sure to also join the Facebook group for daily tips, news, support and accountability!

Step 100: Stick to Your Mission

Step 100 of the 100 Steps Mission to Financial Independence: Stick to your Mission
Step 100: Stick to your Mission

This is it, you’ve come to the end of the 100 steps mission, you’ve set important new goals, maybe already completed a few along the way, you’ve implemented new habits, have learned a wealth of information on finances (excuse the pun) and most importantly you have started your mission to financial independence, getting closer with each step that you take.

But despite getting to the end of these 100 steps, you aren’t there yet. Financial Independence is not achieved by reading about money, it is achieved by taking action daily and sticking to it. Remember the examples of people who give up smoking or start a new diet and how often they fail and give up their resolutions alltogether? You’ve come to the second most important point on your mission. The single most important one was when you embarked on this mission and decided to take action and change your situation. Your next most important moment is now and it is your determination to continue with your mission, stick to your habits, keep learning and persist progressing towards financial independence.

With all that you have learned til now and everything you’ve started, now is the time to make a new commitment to keep financial independence as one of your top priorities for tomorrow, next week, the next month, next year, the next 5 years and indeed the rest of your life. Don’t let all you’ve learned and done go to waste. Don’t allow for your hard work to have all been in vain. Keep tracking your monthly spending, making a new budget, noting down your networth, reviewing your investment strategy and tracking your progress towards your various financial goals whenever you can. Continue reading “Step 100: Stick to Your Mission”

Step 95: Visualize your Dreams

Step 95 of the 100 Steps Mission to Financial Independence: Visualize your Dreams
Step 95: Visualize your Dreams

Today we’ll step away from the numbers and figures and logical planning for a moment and instead focus on a fun step towards financial independence: visualizing your dreams. This step is the ultimate step to all of the following:

  • keeping up your motivation
  • setting goals
  • not forgetting to live in the “now”

We’ve discussed the first two points in detail in several of the previous steps, but the third one we haven’t yet looked at so much. Let’s discuss the importance of that third point through an example: imagine a couple who gets really inspired to become financially independent. They make a budget, cut expenses, start a side hustle to earn some more money to invest and they see their efforts paying off as their bank account increases. So they hustle a little more, cut another few expenses and speed up the process. But with time they become so absorbed by this process that other things are being cut too. Even though they have a fair amount of money, family holidays are “too expensive”, clothes are recycled well past their “best before” date (which makes the children an easy target to laugh at at school) and any real family time is disappearing quickly as the side hustle takes up any valuable time the family might have had together. After many years of dedication and hard work their bank account finally reaches that milestone of $1,000,000 that they had set themselves. The couple gets ready to celebrate this moment and loosen the reins a little – not wanting to retire completely but at least to work less – only to find that their children have gone off to college, friends from the past are have ceased to be friends as they have hardly seen each other in recent years as the couple had either no time or no money to attend get-togethers. They are not longer members of their sport clubs and realize they don’t know that many people anymore. There are no photo albums on the shelves with photos of happy family holidays, no memories of fun days down at the beach or up in the  mountains at the weekends and they can’t really remember having taken the children on any visits to the theatre, a museum or even the cinema. The couple never had time for fun activities and only ever thought of making money and then some more.

And what for? What is the point of having $1,000,000 in your bank account if you can’t enjoy it? What is the value of money if not to use it and enjoy the little things in life? Spending time with the people we love? More than those $1,000,000 isn’t it important to have time to do what you want to do and to make a difference in the world? Continue reading “Step 95: Visualize your Dreams”

Step 86: The 8 Stages of Financial Independence

Step 86 of the 100 Steps Mission to Financial Independence: The 8 Stages of Financial Independence
Step 86: The 8 Stages of Financial Independence

As with many things in life, if you start looking behind the simplicity of a concept there is more than just a black and white division, a yes or no, a fail or succeed. Even with financial independence the reality is that you aren’t just financially independent or not… Indeed there are many different financial phases that one can reach along the way.

Below are the 8 most commonly identified stages, starting with financial dependence going all the way up to and then well past financial independence. Continue reading “Step 86: The 8 Stages of Financial Independence”