Achieving financial freedom doesn’t have to feel impossible. Even if you don’t have a savings account and are in over your head in debt, there are ways to feel financially free.

 

Here’s how.

 

Face the Problem

 

The first step to financial freedom is admitting you have a problem. Fortunately, budget and spending problems are fixable, but like any issue, you must admit the problem exists first.

 

Once you admit you have a spending or saving problem, you can take the necessary steps to fix it and achieve financial freedom.

 

Steps to Financial Freedom

 

After facing or admitting the problem, you’re ready to implement these steps to achieve financial freedom.

 

Decide to Stop Using Credit Cards

 

If you live on credit cards, it’s time to stop. Even if you use them for everyday spending or only for large purchases, stop using them, at least temporarily.

 

When you know where your money goes and how much you have to spend, it’s much easier to stick to a budget. Unfortunately, swiping a plastic card makes it far too easy to overspend, and before you know it, you’re in over your head in debt.

 

Track your Spending

 

It’s important to track your spending, so you know where your money goes. You can do this with a spreadsheet you create or by using an automated app that tracks your spending in real-time, such as Mint.

 

The key is to know how much you spend in each category and to adjust your spending as needed. For example, if you spend too much money on food, find ways to cut back so you can stick to your budget. For example, you could clip coupons, shop sales, and create meal plans to eat out less and only spend money on food on sale that week.

 

Save Money

 

With your spending intact, you can start saving. This is the most important part of your budget and ranks up there with paying your housing and transportation expenses.

 

Saving money should be non-negotiable in your budget, and it’s always best to pay yourself first, aka save money on payday, not at the end of the month. You risk not having any money to save if you do it that way.

 

When you save money, here are the goals to prioritize.

 

Start with an Emergency Fund

 

Everyone needs an emergency fund. If you have high-interest debt, focus on saving $1,000 for a minor emergency and then focus on paying off your debt. We’ll return to the emergency fund after you get out of debt.

 

Pay off Debt with Debt Snowball Method

 

The debt snowball method helps you get out of debt fast. It’s easy to follow with these steps:

 

·      Arrange your debts in order of balance, lowest to highest

·      Make the minimum required payment to each debt

·      Apply any extra funds you find in your budget to the debt with the lowest balance

·      Keep doing this until you’ve paid the first debt in full

·      Take the same amount and apply it to the second debt

·      Continue until you’ve wiped out your debt

 

Continue Saving

 

Once you’re out of debt, focus on saving three to six months of expenses in your emergency fund and then save for the future.

 

Consider saving for:

 

·      A down payment on a house

·      A new car

·      Retirement

·      Having a baby

·      Medical expenses

·      Any personal goals

 

Final Thoughts

 

Achieving financial freedom is possible for anyone. It requires a consistent plan you can stick to and use, including both spouses. Continually revisit your budget and financial goals to ensure you’re on track.

Remember that a budget is flexible and can be changed as your needs change. The key is to stay on top of your goals and spending so you can achieve the financial freedom you desire now and in retirement.

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