Financial Freedom is possible for UK Business Owners
Is financial freedom an achievable goal for every UK business owner in 2018?
Laurence Duncan, ActionCOACH Loughborough believes it is, if you follow three simple rules and don’t give in to ‘Lifestyle Creep’ This is the tendency to increase your spending in tandem with your increased earnings, the new Gym Membership that you never use – but really mean to, the bigger or higher status car when there was nothing wrong with your old one.
Lifestyle Creep
The biggest problem with spending everything you earn, is that when your income falls; your spending does not follow. You continue spending as you used to and the credit card debt slowly gets bigger and bigger. How can you tell Harry and the Golf Club chums that you can’t go for that meal? Or go on that weekend to Munich to watch the match? It’s not unusual for business owners to have a Credit Card debt of between £12,000 and £24,000
Here are 3 Top Tips that will help you to break free of the debt trap forever:
1 Save 10% of your income every month
You may be surprised to know that most people living well above the poverty line cannot afford to do this. So, start with 5% of your monthly income and over time, it will allow you to pay for those unexpected emergencies without throwing you into turmoil.
Don’t be tempted to view this as an investment; but instead, view it as a safe cushion. If you find yourself needing money for any unexpected reason, it’s there for you.
2 If you go into debt to buy it, you can’t afford it
I’m not referring to major investments – very few people can afford to buy a home in cash. I’m referring to the smaller things that aren’t essential for survival like that new TV or 3-piece suite that would go on the credit card.
If you eat out frequently and use your credit card to do so, then you are spending money you don’t have. The annual percentage rate of credit card interest means that you pay far more for that dinner out if you don’t clear the balance each month.
If you charge something to your credit card, make sure that you could afford to pay for it in cash if needed. Following this simple rule will help you avoid a lot of unnecessary purchases in the future.
3 Make a budget and track everything you spend
It’s easier to spend when you are putting things on a credit card, because you aren’t seeing physical money leave your hand when you buy.
One night might cost £30, but several times a week could cost 20% of your monthly pay.
Measure every £1 you earn, and measure every £1 you spend.
This will allow you to measure what you are spending as a percent of your income, and if you are positive or negative in finances each month.
At every free 2-hour meeting Laurence guarantees to give you at least three ways of increasing your bottom line THIS MONTH… not in 6 months’ time. What’s that worth to you?
