Were Talking about the 5 Steps to Financial Freedom and How to reach a Lifestyle of Financial Independence . These Steps are meant to be Done step by step one after the Other in order to train your mind to think in a way that preserves your wealth and prepares you for the Worst possible scenarios so your not caught off guard . These Steps Are : Step 1 : Make a Budget ; Without having a budget you don't know where your money is coming from and where its going . Making a budget is an essential first step . This is a link to an article that contains a simple Excel Sheet that tracks your budget
Step 2 : Build your Emergency Fund ; Having an Emergency fund with enough money to meet a deductible of a hospital bill should be always ready and available in case you need it.
Step 3 : Always take the max Company Matching for your 401(K) , and HSA as a minimum to ensure your investing for your retirement .
Step 4 : Pay off your debts ; Even throughout the previous steps you need to pay the minimum payments on all your debts . However , after the first 3 steps step 4 is where you go all in to pay off your debts . Use either the snowball Method ; paying small total amounts first . Or , Avalanche method and pay the highest amount first .
Step 5 : Open a Roth IRA and contribute the max per year every year until age of retirement . Being the second best retirement account with double tax advantages , you always want to prioritize maxing out your ROTH IRA before moving on further .
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Middle Class investing is a Finance Blog , and my name is Vicc and I have a passion for Everything Investing related and Entrepreneurship . I have achieved mastery over my own finances and budget and I am challenging myself constantly to learn new things to succeed and overcome new obstacles.
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