A 10-step plan to achieving financial freedom
Gail Vaz-Oxlade is well known among Canadians as a straight-talking, no-frills financial advisor. She is a best-selling author of numerous books on the subject of money and financial management. Her tips for achieving financial security are down-to-earth and easy to implement. In honor of her recently announced retirement, we reflect upon 10 of her most potently simple instructions for securing financial health.
Discover what is most important to you. Do a deep personal assessment of your financial goals and dreams. Vaz-Oxlade cautions against going with the flow, setting your priorities according to what is trending at the time. Being an individual when it comes to establishing spending priorities is the key your financial freedom.
- Establish a “fast-food” tax
Every time you pop into Starbucks or other favorite fast-food outlet, add a dollar to a cup that you keep in your car or a special pouch that you keep in your bag. You will be surprised how fast the money adds up. Vaz-Oxlade says that if you have the budget for cappuccinos, then you also have the budget to save up for those big-ticket items such as a vacation or honeymoon.
- Share financial responsibilities
Some have a natural affinity for accounting and managing money and others prefer not to know. But, Vaz-Oxlade stresses that couples must make every effort to share the burden. If only one spouse is in control of all money management duties, the other can feel oppressed, or disempowered. The one doing all the work can begin to feel that he or she is shouldering all the responsibility. Should the marriage end through divorce or death, the surviving spouse could be left facing a pile of fiscal surprises. Share the duties according to your likes and strengths, and be sure to sit down together to prepare the budget, discuss spending priorities, especially big items, and to review fiscal accounts.
- A $10 bottle of wine from Chile is perfect
If you want to enjoy a bottle of wine, or entertain your guests, you do not need to spend a fortune. Don’t be persuaded that the price corresponds to the taste. One can find excellent $10 bottles of wine that everyone will enjoy, and you won’t go broke.
- Don’t let shopping be your drug
Vaz-Oxlade cautions against using shopping as an anti-depressant. You might attain a temporary high, but like all drugs, you have to face the downer. Deal with the depression rather than a pile of credit card bills that will rob you of your financial freedom.
- Have coffee at home
If you think about it, a regular cup of coffee from your favorite coffee place could cost you around $2.50 a day. If you prefer lattes or cappuccinos, then you are looking at dishing out close to $4.00. At the end of the week, you have spent almost $30. Skip the coffee house and brew it up at home.
- Be honest with each other
Vaz-Oxlade commented that she was surprised by the number of couples who are dishonest about their spending, such as hiding purchases, or altering items to make them look like they are not new. Dishonesty only brings disaster and a certain end to the relationship. Also she stresses that it is imperative to have a sincere and in-depth financial discussion before the wedding.
- Forget about early retirement
It may look enticing, especially in the face of media images that glamorize retirement, but Vaz-Oxlade says skip the early retirement, remain in the workforce longer, adding not only to your bank account but also to the quality of the world.
- Be careful with that line of credit
When we open up that line of credit, we think of it as an emergency back-up. But the unfortunate truth is, that open credit is incredibly alluring, and many consumers end up tapping into it even when it is not an emergency. Before you know it, you have maxed out on all of your lines of credit and your financial freedom is gone. If you have a true emergency, then use it. Otherwise, pretend you don’t have a credit line.
- Slow and steady to the debt-free zone
The only way to become debt free is to have a plan, stay focused, go slowly, set reasonable goals and don’t lose sight of the end zone.