How To Become Financially Secure – Long to be completely free from working for a living, but don’t know where to start?

This blog is dedicated to helping you set financial goals and know exactly what you need to do to achieve total financial freedom and security, and even one day allow you to retire. completely get out of the rat race and do whatever you truly love while living your financial happily ever after.

How To Become Financially Secure

How To Become Financially Secure

Knowing exactly what you’re getting into is key – so here are 5 financial numbers you need to know to make your future financially independent too.

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The key to financial freedom really is to spend as little as you can with your money, and aim to own more of life’s essentials as well.

Besides this, how much do you need if you live completely free from work?

I’ll let you decide on the lifestyle you want to aim for, but one rule will help you get there.

With any monthly payment, whether it’s credit card debt, a mortgage, a car payment – the 10% rule will save you serious money and get you to your goals faster.

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The 10% rule is simply committing to paying an extra 10% on top of your normal monthly payment each month via direct debit and not thinking about it.

You’re making an extra full payment a year (more) without even realizing it.

And with that extra payment a year, you can usually keep more interest back in your pocket to use for more exciting and fun activities.

How To Become Financially Secure

For example, on a £5000 loan at 4.5% interest you would normally pay £100 a month for repayment over 5 years.

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If you choose to pay the £110 instead (10% more per month) you will pay off your loan 6 months early without any trial or suffering.

That means £660 back in your pocket to use to put towards your next holiday, or even to invest and start your emergency fund.

It’s easier to use the 10% rule – just pay off half of your loan or credit card every 2 weeks instead of once a month.

You will then make an additional payment that is the same as if you were adding 10% per month, and it makes your budget even easier by managing it every 4 weeks rather than the calendar month and balancing the books.

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Remember the key is to put everything on AutoPilot – make all payments and additional payments by direct debit or standing order with your bank so you don’t have to physically do anything to do it all.

Anything that works automatically – anything you trust yourself to do manually is more likely to fail.

Start by saving even 1% of your Pre-tax (the amount before you pay the tax man and national insurance, so you are top line when you say how much you earn each year) in the Pension fund provided by your employer or your own Pension or Investment ISA & Fund.

How To Become Financially Secure

Use my AutoPilot Money Spreadsheet to see the percentages you save in my Etsy shop here too.

Habits To Become Financially Independent In Your 20s

By putting your future self first each and every month, and by taking it out of your paycheck without you knowing, you are enriching your future self.

Many people are afraid to invest, using the power of compound interest to grow their money, but it is straight forward and everyone should do it.

If you earn for example £25k per year pre-tax, if you put 10% (£210 per month) into a pension or investment fund with an average rate of return of 5% and you start at the age of 25 you could have almost £322k in savings by retirement age of 65.

The interest alone then every year for the rest of your life will be around £16k  and you will be financially free.

How To Become Financially Independent

Start at age 35, the same amount each month invested and you’ll have almost £176k in savings and receive almost £9k a year in interest from living interest, then a state pension to follow at age 65 almost at the top.

At age 25, you could retire at age 55 (10 years later) with savings of £351k roughly.

Age 35 – you can retire at age 55 (10 years earlier) with savings of £174k approx.

How To Become Financially Secure

The important thing to remember is that when you pay into a pension scheme as pre-tax where the money is taken directly from your salary every month before tax, the physical money you receive in your pocket instead is about 30% more down.

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Pre-tax money is worth more and will make you richer without you letting go or feeling the loss.

Even better – every time your employer makes a contribution to your pensions in addition to your donations, RACE ALL!

THIS IS FREE MONEY – they effectively give you extra money in your wages and future salary by putting more money out of your paycheck into your pension bucket.

Make the change to start paying your own future pension and investments at least 1% and challenge yourself to increase it as quickly as you can with the goal of 20% or more at the end.

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Do you know how much money you need to save or invest to live on income for the rest of your life?

Having the compound interest on that amount will give you your living wage every year and no need to lower the savings amount?

Using the power of compound interest and investments that return better than normal bank rates, investing in the Stock market with Investment ISAs for example, you can do this.

How To Become Financially Secure

Having a goal to be financially free is one thing, but to make it a reality and work towards it every month you need to know the exact amount.

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You can do this with roughly 25 times x your annual salary to cover your housing and living expenses.

I would encourage you to use the amount that is truly essential if you don’t have to work but enjoy your days instead (no extra coffee every day if you can afford it) as a starting goal.

You can use my post and video here that shows you exactly how long it will take you to reach that goal and then write it down.

Set yourself an annual goal to work towards it in annual increments, depending on the year you want to retire and even work out how quickly you can reach the goal if you put in your efforts. this.

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I know my number exactly and know how far we have to go now to hit it.

The 80/20 rule is everywhere you look and the first thing that is mentioned usually every time you look is to focus your efforts on the truth where it will add value and happiness to your life.

For your financial freedom and security, try to aim for your monthly budget to be 80% living expenses as much as you can now and 20% of your money is invested in passive and active income.

How To Become Financially Secure

Aim for 50% of your total monthly budget on your household needs if possible and the remaining 30% for your spending money on fun and extras like holidays and luxuries.

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If you know these numbers you are sure to be on the right path to financial freedom and security. While I know we all want to retire one day, that journey is different for each of us. No one person is at the same stage in their own process. Some may be focusing on paying off student loans while others may be focusing on saving for a down payment on a house or just trying to keep the lights on.

#1 Live within your means! In 2017, Career Builder conducted a study in the United States and found that 71% of all workers are in debt. America was built on the consumer economy. You are encouraged to buy from ads in cartoons, on billboards, to magazines. Having more is the best way to go right!? I’m not like that. If you’re struggling to put food on the table, you don’t need to buy a new car or video game. So have a budget and stick to it!

#2 Create and maintain an emergency fund. Your emergency fund should cover your expenses for at least 3 months, 6 months is better! This is a backup to use when things hit the fan. Like when your car breaks down or your apartment floods. This is your safety net that should always be kept so you don’t have to take out a last minute loan to get by.

#3 Pay off your credit cards every month. Make the minimum payment every month. Even if you’re not in a place to pay the excess, you don’t want to miss a payment. It is very easy to miss a payment, a loan

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