Financial Freedom is not an accident.

Everyone has their own definition of financial freedom based on their goals.  For simplicity, let’s use debt free including your house as the end goal.  Unless you are one of the purely lucky, 1 in 175,223,510 winning Power Ball ticket holders (not a strategy I endorse), you will need to implement good money habits, old fashioned hard work, and hustle to shorten the time to achievement.  If you are focused enough to be reading this, it is likely that you want to achieve financial freedom as soon as possible.  As Archimedes so eloquently pointed out, “The shortest distance between two points is a straight line.”  Sadly, the point at which you currently sit and the very achievable goal of financial freedom is guaranteed not to be a straight line.  At some point you will get sick of $0.29 packs of noodles and saying “No” to every invite sent your direction.  To achieve the straightest squiggly line possible, you need to work a plan that works for you, as long as it still makes you a little uncomfortable.

The typical start to such a plan is a budget.  My wife and I added one extra step before the budget.  We created a Net Worth spread sheet.  We did this because a Net Worth calculation gives you a holistic picture of your debts and your assets.  In many cases you will reach a $0 Net Worth (a good thing) before you pay off all your debt.  This happens because you have equity in some of your assets like a car or house that will offset your debts.  We found that this visualization gave us more motivation while plowing through some of those larger debts that can take months or years to pay off.  This added encouragement came from Net Worth jumps from paying down debt that also led to higher equity in the above assets.  We were achieving two goals with one transaction, increasing Net Worth and decreasing debt.  Do not underestimate the power of every win along this journey.  There will come a time when motivation is low and this spreadsheet will help you overcome a lapse in judgement.

To build the Net Worth spread sheet simply write down all your assets and debts and the dollar amount associated with each.  For larger assets like your home or vehicle use a price estimator tool such as realtor.com or kbb.com to determine the value of these assets and then subtract the amount left on your loan to determine equity.

Now START!  The worst thing you can do is sit and wait.  Remember, Financial Freedom is not an accident.