Most people think “budget” is a dirty word.
It sounds restrictive… like a process that will take away all the money earmarked for fun and enjoyment.
In reality, it’s the opposite… And if you want to become financially free this year, it’s a skill you need to learn.
Once you understand how much money you’re spending – and where – you can streamline your life and place greater focus on the activities and goals that matter the most.
More than that, when you earmark a specific amount of money for the things you truly love, you can enjoy them guilt-free.
Start with your necessary fixed costs – housing, utilities, car payments, insurance, etc.
From there, tally up the more discretionary categories – clothing, restaurants, golfing, and so forth.
Be as granular as possible, using actual bills, receipts, and invoices. Look back a full year or two to get an accurate long-term picture of your outlays and spending habits.
Now create an accurate picture of your income from all the possible sources – regular employment, side hustles, investments, retirement plans, etc.
Once you have that, start asking some questions:
How much of your earned money is going to necessities versus discretionary items?
Are there changes you could make without real consequences?
And are there different priorities you should emphasize going forward?
You also might find some easy adjustments can be made, including recurring items like:
Memberships and subscriptions you aren’t using all that much or could easily be downgraded.
Landline or cable bills that are redundant with other services you now have.
And regular indulgences that don’t meaningfully improve your life or create lasting memories.
You might also start contemplating bigger changes that could seriously alter the equation going forward – even things like switching up where you live.
The critical part is having a complete inventory of your past habits so you can tweak them and get closer to the picture you outlined in the first step.
Make sure your necessary expenses are covered.
From there, allocate money to the discretionary items and pursuits that really give you the most pleasure.
And try to carve out as much money as possible for positive financial maneuvers like debt reduction or increased savings.
Going forward, monitor your progress regularly. Monthly or quarterly would be great. But at the very least, revisit your budget once a year.
You can do this whatever way suits you best – pen and paper, spreadsheet, or an app on your phone.
The key is consistency.
And even if your current life is still far away from that future ideal, don’t get discouraged.
The sheer act of defining your goals and honestly evaluating your finances already puts you way ahead of most other people.
Once you do those things, it’s time to start making more of your money work for you.
Make Sure You Prepare for Emergencies
You’ll hear experts talk about different approaches, and a lot depends on individual circumstances.
But it’s critical to have a solid emergency fund set aside – anywhere from a couple of months of expenses all the way up to a year or more.
This money gets put into something very liquid and conservative – cash, a savings account, a money market, or something similar.
Your goal isn’t earning a return on investment. It’s making sure you’re ready for any curveball that life throws your way.
After all, if you go ahead and put your extra money into a more volatile investment only to be forced to pull it out at a moment’s notice, you might find doing so either unprofitable or downright impossible.
And reducing high-interest debts should also be high on the list – especially credit card balances.
The reason is simple: Paying down debt with an interest rate of 15% or 20% is equivalent to investing your money and earning the same type of return. The only difference is paying down the debt is risk-free.
Now, assuming you’ve tackled – or are actively tackling – the other two, it’s time to start putting more money into ideas that can rapidly move you toward true financial independence.
The Path to Financial Freedom in 2024
At Palm Beach Research Group, we call this strategy “asymmetric” investing.
Put simply, it involves investing relatively small amounts of money into opportunities that have the chance of producing truly life-changing gains.
One of the best asymmetric strategies we know of is investing in cryptocurrencies. And if you want to reach financial freedom this year, you should consider betting on them now.
Last week, the Securities and Exchange Commission approved 11 new spot bitcoin exchange-traded funds (ETFs).
The companies behind these new ETFs have a combined $17 trillion in assets under management. That’s a lot of demand coming into crypto.
Meanwhile, the bitcoin halving is coming up in April. The halving is when the supply of incoming bitcoin to the market is cut in half.
So we’re about to witness an avalanche of new demand hit a brick wall of supply cuts. If history is any guide, bitcoin’s price will continue to skyrocket.
And when bitcoin rises, it takes the smaller altcoins even higher. And no one we know of has made more money from altcoins than Daily editor Teeka Tiwari.
Since 2016, 27 of his crypto picks have jumped at least 1,000%. No other newsletter editor comes close to that type of success.
That’s why Teeka recently held a special briefing to share details about five tiny cryptos he believes can help you turn $1,000 into a retirement nest egg.
If you want to put yourself on the path to financial freedom this year, stream the replay of Teeka’s briefing here and consider adding these five tokens to your portfolio today.
Editorial Director, Palm Beach Daily