How to SWOT Your Way To Financial Freedom

Everyone wants financial freedom, but not everyone knows how to accomplish it. You have to understand your current situation, have a plan to improve, and then execute your plan. A financial SWOT analysis (Strengths, Weaknesses, Opportunities, and Threats) is just the process to help you understand your current financial status and help you brainstorm for the future financial improvement. Typically used in business as a strategic planning tool, a SWOT can tell you where you're doing well, where you need to improve and give you some ideas on the ways you can achieve your financial freedom goals.

Instructions

1. Identify your financial Strengths. What things are you doing well with respect to your finances? Focus on the things you can control that highlight the positive aspects of your financial situation. These items have a favorable impact on your overall financial health. You may be saving for retirement, maximizing your tax deductions or have a home based business that supplements your current income. List all the items that contribute to your financial strength.

2. Analyze the Weaknesses in your current financial situation. These are the areas within your control that could use some fine tuning. Maybe you have too much credit card debt or just too much debt period. Maybe you don't have an emergency fund for those unplanned major events. Write down all the areas that detract from your overall financial success.

3. 

   Look for Opportunities that can change your financial status. These are external things that you can take advantage of to help your financial situation. Does your employer offer matching 401k contributions? Is there training available that can update your skills and put you in line for a pay increase? Maybe there's an organization that provides financial help and information that could be of benefit to you.

4. Determine the Threats that can potentially derail you on your way to financial freedom. These are things that are out of your control, but could put your financial plan at risk. Credit card companies could reduce your credit limit. That's one example. A higher than expected rent increase might be another example. These threats need to be mitigated to reduce their impact on your plan.

5. 

   Put the analysis to use. Now that you have all the Strengths, Weaknesses, Opportunities and Threats listed, you can take action to secure your financial future. The idea is to brainstorm on building more strengths and exploiting the available opportunities. By doing so, you can come up with contingency plans to eliminate / deal with threats to your finances. You can overcome the weaknesses that are holding you back. An example would be taking advantage of the training opportunity to get an increase in pay. Then you could apply that extra money to reduce the credit card debt weakness.

6. Give it a try. Take an hour one day and try the process. The results will not be as obvious as you may think. The mere fact that you write all of these items down gets your brain working to try and solve the problems. Jump start your wealth building and get on the road to achieving financial freedom through this simple exercise.

Tips & Warnings

• Work on each step separately. Spend one day on strengths, another day on weaknesses, etc. Come back to each area after a weeks time. By then, your subconcious will have developed more ideas to add to your analysis.