Financial Freedom Guidance for you and your loved ones! continued....

Free Debt Plan Template

What Would You Do If Failure Was Not An Option

Step 3: Credit (pt3)

Now you’re probably wondering why there are so many parts to this Credit lark. But to be honest it is very important that you get to grips with managing your money before you will ever become financially free.

There are people who win huge jackpots all over the world daily, only to end up broke within a short period of time due to the lack of financial literacy they have. You will want to check your credit report at least once a week just to make sure that there is no weird information showing up.

And if there are any discrepancies on there you can dispute them immediately. Putting yourself in a better position to manage your accounts. I also recommend checking your bank statement every day online for the same reason. 'Every penny makes a pound'.

Keep on top of all your finances to ensure you’re not getting ripped off. Once you have cleared your debt with any creditor you can write to them requesting that they update your credit file as 'account satisfied'/ 'settled' if you had any defaults or CCJ’s, Bankruptcies these will still remain on the account for 6yrs.

Step 4: Building Credit

You may be at a stage in your life where you have damaged your credit rating by not repaying loans and other financial obligations on time which have left you with defaults and CCJ’s on your Credit file and you are now wanting to build up your credit again.

Or you may have no financial obligations what so ever either way, if you are in this position then your credit score is more than likely very low, meaning that it may be difficult for you to obtain any credit anywhere without falling victim to huge interest rate offers.

Either way you are now in a position where you can start building your credit. There are pay as you go type master cards where you can top up the amount you want to spend in cash meaning there are no upfront fees charges or no chance of you spending more than you have on it although there is a small monthly fee, under £5. You will want to go for the ones that offer a credit repair loan on the card. I recommend the Cash plus Master Card. Visit their website for more info.

Another option is a secured credit card. It’s the same as the pay as you go top up MasterCard except you pay an application fee of around £70 and an annual fee of up to £150.

There are similar benefits and both report to all major credit reference agencies. It’s therefore imperative that you make all repayments on time. I suggest going for both options to build activity on your credit file.

Do not apply for any other credit for around 12 months after managing these two methods. By now you should be in a responsible state of mind with your finances and confident that you can mange your money. After a year you could try and get a home shopping catalogue. There are no short cuts when it comes to credit repair it’s a bit like reputation, 'it takes a lifetime to build and one silly incident to tear it down'.

It will take patience on your part to start building up trust again, with the main financial institutions but little by little you’re learning and their noticing. When you fully understand the art of giving and receiving you will feel honoured to repay your debts in the knowing that you are ready to receive.

And lets be honest. If you are serious about becoming financially free then it is good practice to learn about the basics of keeping your credit file balanced. It will hold you in good stead when you really need to get out loan to help reach that goal for 'good debt' purposes of course.(see debt below)

Follow all of the 'Credit Section' steps in order for the best result and remember that for every problem we create in our life’s there are always infinite soloution’s and an abundance of lessons to learn.

Step 5: Debt

We have finally covered credit and the route you should take to stay on top of it 'phew'. This step is all about debt. If you are in debt at the moment then ask you’re self honestly how that came to be.

Maybe you bought a house and took out a mortgage, a luxury holiday abroad or a fancy new car. Whatever the case there were emotions you felt before you took on the debt.

At the time it may not of seemed like a big deal, but now maybe the pressures of staying in the 9-5 rat race to pay it off has you questioning your self ‘was it all worth it’. The house is a home but theirs probably 100 others like it on your road.

The holiday was superb but let’s face it as soon as you got back home it all seemed like a dream and the tan never lasts 'sigh'. The brand new car was only brand new until you drove it off of the forecourt and the price depreciated rapidly, and all that’s to show for it now it 'bad' debt.

I say 'bad' debt for a reason because funny enough there is such a thing as 'good debt'. 'what' I hear you exclaim. Well ill explain. I won’t exhaust this but there are two types of debt.

Assets and liabilities. Assets are things that we own that have a financial worth and that grow and in capital while creating cash flow. Cash flow is money that comes in every day, week, month quarter etcetera.

Assets are items owned such as things such as business’s, stocks and shares, and money that earns compound interest these can be easily turned in to cash if needed. If you’re not familiar with these terms then please look them up as home work and get to know.

If you want to be rolling with the big boys and girls you need to speak their language. (See language below in step 6)

Liabilities on the other hand are items that refer to money owed to complete a transaction or a debt that has yet to be paid. Liabilities include credit cards, loans, hp, mortgages etc. now you may be thinking 'hold on', but I own my house, surely that’s an asset?’.

And you would nearly be right. It is an asset. (to the bank) a mortgage is a debt and while you are contracted to pay it off it is there for a liability, after the mortgage term is up and the debt paid then yes your house becomes your asset.

If however you had a mortgage on a buy to let purpose, that property would be earning cash flow from your tenants (not you) making it an asset. Simply put Cash flow = Asset, Value owned that can be sold = Asset.

So be very aware the next time you consider going in to debt and have a word with your self. Is this an asset to me or a liability?

Step: 6 Language

'Show me your company and ill show you who you are' ever heard that before? Well it is a very true statement. Human beings are by nature chameleons, we adapt and blend to fit our environment, mirror others behaviours subconsciously, imitate and learn by example.

We therefore must endeavour to make sure that the information and surroundings we create for ourselves are in alignment with our purpose, this purpose being 'to get financially free'. We must read and study wealth if we want to become it. Learn financial terminologies and incorporate them in to your day.

Make knowing finances a fundamental part of your life until it becomes like second nature. Read biographies of billionaires and emulate what they do.

Buy the local financial times in your are and study the broad pages. You may not fully understand everything you see but eventually the power of your mind will process all the information it needs until every thing stats to fall in to place.

Find forums online and speak with people who are also interested in becoming rich they may have some good ideas or knowledge that will help you also.

See Steps 7 - 14 for Financial Freedom

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