3 Steps To Financial Freedom

This Independence Day let's discuss the concept of financial freedom and practical steps to achieve it. In this episode, Holly Wanegar covers common obstacles to financial independence, strategies for increasing income, reducing expenses, investing wisely, and advice for staying motivated on the journey to financial freedom.

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Transcript

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Welcome to You and Your Money. Today's episode features Holly Wanegar, associate vice president and wealth advisor at Weiss, Hale and Zahansky Strategic Wealth Advisors. As we gear up to celebrate America's birthday on July 4, we're going to talk about another kind of independence, financial freedom. start with the basics. What does financial freedom mean? Yeah, it's a great topic. Financial freedom, however, may look a little different for everyone. But we see financial freedom as being in control of your financial destiny and having the freedom to make life decisions based on what makes you happy and fulfilled, not just what pays the bills. Another way to think about financial freedom is the state of having enough income, savings and investments to afford the lifestyle you want without being dependent on a specific job or someone else for money. So what are some of the biggest obstacles you see people facing when it comes to achieving financial independence? Yeah, there are a few common ones that come up again and again. First is high levels of debt, especially consumer debt like credit cards and car loans with. High interest rates. That debt eats up so much of people's income that it can impact their flexibility and ability to save. The second is lifestyle inflation. As people start to earn more, their spending tends to increase. At the same time, they upgrade to a bigger house, a nicer car, more luxurious vacations. But they're not increasing their savings rate, so they end up trapped on this treadmill. And the third is simply a lack of financial literacy and planning. Money can still be such a complex topic, and many people are uncomfortable talking about it or asking for help. They don't have a clear picture of where they stand or a roadmap for where they want to go or how to get there. All right, so those are obviously some big hurdles. So what's the first step, Holly? To overcoming them and starting on the path to financial freedom. Yeah. So step one is getting really clear on your current financial situation. That means tracking your income and expenses, assets and liabilities. Not a very fun activity. So I recommend picking a budgeting app or money market money management tool that helps you take an honest look at those numbers. Some of you may have heard of mint is a popular app, or Monarch is a new one that has just come to market that can help you track where you're spending, as well as your bank and credit cards can also have some online tools to help you there. And what that does is really helps you see how much is coming in each month and where it's all going. Are there areas of obvious overspending or inefficiencies, such as unused subscriptions, daily coffee trips? I'm pretty guilty of that one. Or impulse buys? It can be really eye opening and important to start there. It is eye opening, and I think some people avoid doing that because maybe they're afraid of what they'll find. But awareness certainly is key. So what comes next after you have that baseline? Yeah, it can definitely be a little bit scary, but it's important to do. And then we can take time to make a plan and set some goals. Think about what financial freedom looks like for you. Is it being debt free? Retiring by a certain age? Having a big travel budget? Write down those money goals and put a price tag on them. Then look at the gap between where you are now and where you want to be. What steps do you need to take to close that gap? Maybe it's increasing your income, cutting your expenses, paying off debt, turbo charging your investments, or a combination of all of these. My advice would be to focus on the big three. Earn more, spend less, invest the difference. That's really the most important part of building wealth and achieving financial independence over time. All right, so that's pretty simple formula. Please share some specific tactics for each part of that triangle. Absolutely. On the earning more front, a lot of people think they're stuck with whatever salary their current role gives them. But what if we think bigger? Are there opportunities within the company you currently work for, for career growth that will improve your skillset and your income, or outside your current company? And also, you can use some interests or hobbies and see if there's a way to turn them into some sort of income stream. And then on the spending less side, it's not about depriving yourself or living on a very tight budget. I like to call it too restrictive budget, like a bad diet. We're very unlikely to stick to that over the long term. And it's more about being intentional with your money and aligning your spending with your values and goals. Take a look at your biggest expense categories. Usually things like housing, transportation. Food and entertainment. Are there ways to optimize those? Downsize to a smaller place, shop around for cheaper insurance, cook more meals at home, or cut the cable cord. Small leaks can sink a big ship over time. And the third piece is investing wisely. So your money is working for you in the background, such as if your company offers a 401k with a match, make sure you're contributing at least that to get that free money. All right, so great advice. What would you say to someone who is feeling overwhelmed or discouraged about their ability to achieve financial freedom? What advice do you have, Holly? Yeah, I would say, first, take a deep breath and remember you're not alone. So many people are in the same boat, and it's never too late to make these changes to set you up for success. Financial freedom is a marathon, not a sprint. And celebrate your small wins along the way. And surround yourself with positive influences and accountability partners. Maybe that's a money savvy friend, a Facebook group or a financial advisor. And always remember your reason why. What does financial freedom mean to you? More time with family, the ability to travel, leaving a legacy. Keep that front and center and use it as motivation. All right, that's good stuff today, Holly, thanks for sharing your wisdom with us today. You've given us a lot to think about and really a clear action plan. Thanks for that. Yeah, absolutely. It's my pleasure, Gary, especially because it's really the ultimate goal of what we work to deliver for our clients. We strive to give them absolute confidence and unwavering partnership for life. Like our new tagline says. Great information today, Holly. Thank you For more information regarding wealth management and customized financial planning with Weiss Hale and Zahansky Strategic Wealth Advisors, please visit whzwealth.com. Weiss Hale and Zahansky Strategic Wealth Advisors offer securities and advisory services through Commonwealth Financial network member FINRA/SIPC, a Registered Investment Advisor, fixed insurance products and services offered through CES Insurance agency. They practice at 697 Pomfret Street, Pomfret Center, Connecticut 06259 and 392-A Merrow Road, Tolland, Connecticut 06084. They can be reached at 860-928-2341 Weiss, Hale and Zahansky Strategic Wealth Advisors do not provide legal or tax advice. The tenured financial services team strives to support clients in achieving their financial life goals while providing absolute confidence and unwavering partnership for life.