Financial Freedom

6 Steps To Achieving Financial Freedom With a Household CFO

Earning a high income is wonderful, but it’s attaining a healthy savings rate — not how much money you make — that actually creates financial freedom, flexibility, and peace of mind. The amount that you set aside for a rainy day, or to invest to provide for your future, is the best solution for financial stress and achieving stability, wealth, and security. Saving money is not a new concept. What most busy, high-income households in the U.S. struggle with, however, is committing to a realistic plan to save more, and adjusting that plan to your unique circumstances, priorities, and values. This is where Levanto Financial comes in. When you become a member, Levanto assigns you to work with a real financial expert: your own personal Household CFO who guides you through a proven method to achieve your financial goals and advance through the stages of financial freedom (they’ve identified six!). Here is just a sample of advice that Levanto’s Household CFOs help our members with. If you’re interested in learning more, please click here for a free consultation.

  1. Align your goals and values with your finances.

Before you devise your financial plan, you need to spend time thinking about what you really care about, what you really want in life. In the first stage of financial freedom, you’re in survival mode. That means you have to make trade-offs based on your true priorities. A powerful exercise in testing your spending choices against your values is to stack-rank your expenses in order of what’s most important. This forced prioritization will clearly distill what you’re spending money on that isn’t important, while allowing you to focus your resources on what you value most. Then, you’ll be ready to start planning.

  1. Create a plan and stick to it.

Many people don’t know where to start when creating a financial plan. Sometimes it’s easier to decide what you don’t want and work back from there. You don’t want to have credit card debt. Now, flip that “don’t” around and you’ve got your goal: You want to pay off your credit card debt. To build a plan, you need to clearly determine what you want to afford in life and what you don’t. Once you’ve established what you want, map out the steps you need to take to meet your goals and live by your personal values. Next is sticking to your plan. Your Household CFO will help facilitate the conversation around what needs to be done in order to improve your household finances — and also keep you accountable. This includes budgeting with your top priorities in mind, reviewing your spending regularly, and remaining realistic about your lifestyle. Once you’re able to budget for what you really want to spend money on, you’ll start building up savings that can go toward things you might need or want down the road.

  1. Create a buffer to cover the vitals.

35% of Americans who make more than $100K per year don’t have enough in their savings account to pay the deductible on their car insurance if they were to get into a car accident today. These people have not built up an emergency fund. This is vital because the unexpected will happen, and if you don’t create a fund to keep yourself set for those times, you’ll be in a very tough spot. In stage three, you will - create a buffer to fund the potentially unexpected, and important expenses.

  1. Start making the purchases you really want.

In stage four of financial freedom, you’ve moved from surviving to thriving. Because you thought ahead in the previous stages, you can make purchases that reflect what you really want in life. You can start doing things that really mean something to you.

  1. Live more with passive income.

Now that you have a good amount of savings built up, you can take the time to work less and live more freely. You’re earning a passive income, which is ideal because you no longer need to hustle to make ends meet and you’re safe for whatever life will throw your way.

  1. Share the wealth.

This step proves that it is very doable to attain wealth, even more than you need for yourself. Once you’ve acquired more savings than you can count, you have the option to share your wealth with others and contribute to society in a way that is truly fulfilling. While this is essentially “the dream,” Levanto’s program will help you make it your reality. Levanto’s unique approach combines the scale of software with the personal approach only a real financial expert can provide. By leveraging recent advances in technology including data analytics, mobile UI, and near real-time reporting, Levanto’s platform empowers its Household CFOs to focus on what’s most important: understanding the needs of members, and creating conversations about personal finance that software can’t do alone. To help make connecting to household bank accounts and credit cards easy and safe, our team at Levanto has chosen the Envestnet® | Yodlee®Aggregation API. This API allows Levanto Household CFOs and our members to look at checking, savings, and even loyalty rewards data to better plan cash flow and make financial decisions. Levanto was one of 7 companies in the latest cohort of Ynext Incubator by Envestnet Yodlee. To see highlights from the Ynext Incubator Demo Day, please check out the following videos:

If you’d like to dig deeper into the 6 Stages of Financial Freedom and learn how working with a household financial expert today can have a profound effect tomorrow, read Levanto Financial’s free guide! Progress happens in increments, and your first step can start right now.