If building wealth and increasing your financial knowledge is an area of goal setting you want to accomplish for the New Year. Here are 6 strategies to get you started to achieve your personal financial independence.
1. Create Assets or Buy Assets
In order to increase your current income, it is important that you have assets that you own or buy. The accumulation of assets can provide an individual with passive or residual income which is the opposite of active(earned) income. For the New Year, if you do not own any assets or have created any assets to generate passive or residual Income find ways to get started. If you do not want to make the investment in buying assets create your own, by writing a book, establishing an online blog or create some original music.
2. Use Leverage
Using leverage is the ability to seek the resources or the assistance of other individuals to get you closer to your goal. Leverage requires you to not use all of your own resources. Many times as individuals we don’t get started with pursuing our own wealth building initiatives because we think it requires our own money or assets. An example of leverage is the ability to create a joint venture partnerships or associations with other individuals so that the both of you can pool your resources together; many times for one individual money is not needed to form these joint venture associations.
3. De-clutter your Finances
Getting your personal finances on track is a widely use resolution used by many people, but unfortunately the attainment towards the goal is not realistic; which could result in going back to bad personal finance habits. Attack your finances in small steps do not try to do one thing all at once, pursue a small goal of saving 10% percent of your paycheck for one month and see if you can meet that goal. 10% percent of $100 is $10 dollars the amount may be small but for a person who gets paid biweekly that amount could accumulate into $260 dollars at the end of the year. It’s better to save $260 then to pay it in bank overdraft fees or credit card interest.
4. Eliminate Defaulted Credit Card Debt
Defaulted credit card debt is debt that is misunderstood by many consumers. During the beginning part of the year many debt collectors will work hard trying to get consumers to pay debts at a discount amount. It is important that you understand the nature of those debts, and if the debt collector has the ability to collect the money. Many consumers pay debts that are owned by debt collectors and it results in no change in their personal credit. Understand the difference between past due credit card debt and defaulted credit card debt there is a difference between the two types of consumer debts.
5. Check your Personal Credit Report
Every individual should receive their free credit report, to access your free report go to www.annualcreditreport.com. Always examine your credit to discover any discrepancies that could appear on your personal credit report. Any negative discrepancies can result in your credit score being lowered, it’s important to dispute with the all three credit bureaus if you do not agree with what is being reported.
6. Become Financially Literate
Seek knowledge in the area of financial literacy, it’s important to know how to count and read, but understanding your personal financial statements can minimize unhealthy spending habits. Financial literacy is like anything in life once you start learning the subject it could appear hard and confusing but as you increase your understanding in the subject matter you will eliminate many of the hurdles you once experience in the beginning.
About Author: Lorillia Brown-Phillips is an impactful Financial Literacy Educator, Empowerment Speaker and Published Author. You can find Lorillia providing her expertise regularly on Your Black World and Black Life Coaches. Lorillia regularly provides personal finance content on her blog at YourMoneyMentor.com
Lorillia’s mission and goal is to eradicate Financial Iliteracy, by equipping individuals with the learning skills necessary to increase their Financial IQ. She advocates that you cannot build wealth if you have not mastered the beginning fundamentals of personal finance. Lorillia is also the author of “Jump Start you Credit: How to Negotiate and Settle your Debts in 10 Step”
- Website: http://www.yourmoneymentor.com
- Website: http://www.jumpstartyourcreditbook.com
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- LinkedIn: http://www.linkedin.com/in/lorilliabrown