Personal finance

3 Steps to Financial Freedom

Financial RecordsAre you financially free? Or are you a slave to your money? Financial freedom is something that everyone strives for, yet few actually get there. If you want to get to financial freedom, then you need to start working through the following three steps:

  1. Learn how to budget.
  2. Learn to save money.
  3. Learn how to get out of debt.

The first step towards financial freedom is learn how to budget. Budgeting is a big deal. If you aren’t already doing it…it’s time to get started. It takes a bit of time to set up and get going, but once it is, you will be grateful.

Make sure that your budget is written out somewhere; on paper, spreadsheet, or you can even use an app or software. But just having it written out doesn’t make it perfect. In fact, a budget is something that needs to be looked at often and tweaked to make sure it still fits your lifestyle. A true budget will help you assign each dollar to a category. It will also help you save money, step number two. In addition, it will help you to know exactly what your financial picture looks like. Budgets are good…it’s at the root of financial health. So get on board with a budget!

Second, learn to save money the right way. Saving money is such a common phrase these days. It doesn’t have any true action behind it. You need to learn how to save money by creating a savings plan. A savings plan is, just like a budget, something that is written out with goals and objectives.

Sit down and write how much you want to save in the next six months or a year; these are your goals. Then assign an action to each of your goals. If you want to save a certain amount in six months or a year, then make sure you are saving a portion of that each month. Make your goals actionable. Make them inspiring. Your goals should help you stretch, but not over-exert yourself. Once you know how to properly make goals, and then achieve them, you will start to see how creating a savings plan really can benefit you.

Finally, once you have a budget in place and you are saving money, now it’s time to get yourself out of debt. If you want true financial freedom, then you need to get out of debt…period. You cannot be financially free while still forking money out to other people. Getting out of debt is incredibly hard. You can’t just assume that you will get out of debt. No, it takes more than that. It’s like pushing a boulder up a mountain. You have to work at it each and every day and week.

Once you are saving money each month, put a little away for future emergencies. Take the rest of the amount that you have saved and put it towards your debt. Attack one loan at a time. Start with the loan that has the lowest dollar amount and work your way up from there. Keep attacking it with everything that you have! It will be hard, but I promise that it will be worth it. Once you have paid off the last loan, you will truly be free!

Now you know how to find financial freedom. Start budgeting, saving money, and getting out of debt. If you can do these three things, then you will have financial freedom one day! It will give you the peace of mind and satisfaction that you are ultimately seeking

If you have any questions, please ask below!