Have Yourself A Personal Financial Timeline

Since day one of working as an employee, you’ve been working hard and disciplining yourself. You got promoted and experienced increases in your salary. You’re finally at the coveted position known as “in the black”, which means you now earn more than you spend. Financial freedom is just around the corner for you. Because you actually bring in more than you bring out, you now have the chance to do something positive with your excess money, like building your pot of gold and paying off all your debts. Whether you’re planning to invest or save up, you’ll need to follow a timeline so that you would know what to do, how to do it, under a specified time. Like all timelines, here are the areas you need to focus on in order of importance. Pay off debts with high-interest


Debt in itself is not destructive at all. In fact it helps a lot of people fill in some emergency expenses or lump sum needs. What makes debt troublesome is the interest rate attached to it. As a general rule, the longer you carry debt, the more money you will end up paying. Therefore, the first step in this timeline and towards financial freedom is paying off the money you owe, especially the ones with high-interest rates. These debts are easy to locate. Simply gather all your debt, make a list, and rank them according to interest rates. With the extra money you have, pay off the debt with the highest interest, and then down the list.

Pay off other debts

Corporations and small businesses share the same policy when it comes to their liabilities; they make sure their debts, whether short-term or long-term, are paid as soon as possible. If all liabilities can be paid in a month, then by all means, pay them off. This is how you should look at personal finance as well. Debt is never a friend when it comes to handling your finances. If you have debt, do not procrastinate and pay them right away. Even if there are small or no interest rates attached to the debt, make it a priority to settle them because it helps your well-being both emotionally and mentally to know that you’re debt-free.

Create a savings account

For starters, try to set aside at least 10% of your income every time you receive a paycheck. If you’re already doing that, try to increase the percentage that you save. Ten percent may seem small, but five years from now you’ll be surprised at how huge your savings account would be if you practiced this step strictly. Further, the amount you accumulated over the years can be used to build an investment portfolio. To some people, savings and a retirement plan just don’t cut it. If you’re one of those people, then work your way towards having an investment portfolio to increase your assets. And what better way to start than having a savings account.

Plan for retirement

If your employer doesn’t provide a 401(k), visit your local bank and set one up right away. Planning for retirement is crucial because the money you bring in is only temporary. Once you leave the company, you’re salary goes along with it. To cushion this sudden disappearance of income, you should have a retirement plan like a 401(k) or a life insurance annuity policy.