Money management is the action to effectively manage our expenses and savings to grow our wealth, so as to give us the financial freedomto choose how we want to lead our lives.
The flow chart on the left is the financial freedom plan that I recommend for anyone who is interested to achieve financial freedom. This was the path I have personally used to achieve my personal financial independence.
I have imparted it to my kids to adopt the process flow as part of their wealth management plan successfully. And now, it is part of Money Champ system.
The financial freedom plan on the left will only work well if our kids apply good money management as they execute each task (in blue boxes) towards financial freedom.
In addition, it is advisable to follow through each activity in the sequence shown in the flow chart, and not skip any steps. Only after we are financially educated, then we should proceed with money making options.
Once we select a money making option that we like or feel comfortable with, work on it until we successfully receive good income from it.
A good income can be direct or passive income.
As our kids work on the tasks in the financial freedom plan, there will be times they feel impatient, disappointed or the temptation to over-spend.
Thus, it is important to start developing our kids the habits to spend within their mean, while frequently save into their Bonus (Investment for us adults) accounts that can earn their bonus or passive income to gain financial freedom.
From all the parents’ experience, while our kids practice money management, they also develop strong emotional intelligence and winner mindsets.