Ditch the Debt, Live the Dream

Achieving Financial Freedom

Financial freedom may look like a land of endless vacations, dream cars parked in the driveway, and telling your boss “see ya later!” But for many of us, this may feel more like a distant mirage than a reachable oasis. Let’s look a this more realistically with a few less dream cars parked in the driveway. We’re thinking more along the lines of establishing some goals with specific amounts and timelines that allow you enough financial resources to cover those living expenses and being able to stretch to a desired lifestyle without completely breaking yourself through the process.

The Struggle is Real, and Common

Let’s face it, life throws financial curveballs, including the current state of inflation. From surprise car repairs or medical bills to leaky pipes in the basement that decide to “sweat.’ Unexpected expenses can derail even the most well-laid plans, especially without an emergency fund. But the real enemy of financial freedom is: debt. Credit card bills with interest rates so high that you feel stuck to the hamster wheel of “work, pay bills, repeat.”

Building Your Financial Fortress: Brick by Frugal Brick

Here’s the good news: financial freedom isn’t something reserved for lottery winners and tech billionaires. And, we would advise against using the lottery as a replacement for your 401K or IRA. But the truth is, it’s an achievable goal for almost anyone. It’s not about getting rich quick, but about building smart habits over time. Think of it like training for a marathon – it requires dedication, consistent effort, and maybe a few strategically placed energy gels (or, in this case, budget-friendly meals!). But the finish line is the beautiful vista of financial independence.

*If you’re not into running then just (insert) activity that aligns with you to drive the point across.

Step 1: Know Your Why

Financial freedom is a personal journey. This isn’t about the highlight reels you’re scrolling through on social media. You don’t even know those people! What does it look like for you? Is early retirement on a beach sipping margaritas your thing? Or, do you truly love what you do professionally and just want the freedom to be able to work where you want, when you want on the things that matter most to you? Heck, do you just want to work part-time? Any one of these are okay choices. Maybe it’s a project or side hustle you’ve been meaning to get started on that can help you generate revenue on your terms.

What if you found something on the side that generated an extra $500? That might not seem like a lot, but if you found this stashed away in an old pair of jeans you haven’t worn in a while you’d be psyched.

Whatever it is, write down your goals, including specific amounts and deadlines. The clearer you become on your vision, the stronger your motivation.

Step 2: Budgeting? There’s an App for That

This isn’t about cutting everything to the bone. This is more like a roadmap to your financial future. When you see where your money is going then you’ll start paying closer attention to where your money is being spent, and then wondering how you ended up with more streaming subscriptions than you have time for. I’ve even met someone that had more than one Netflix account because they didn’t remember previously signing up with an old email account that they rarely check, and also didn’t notice until they decided to search for a different expense on their credit card statement and happened to notice being charged twice in the same month. This apparently had been going on for years.

There are tons of budgeting apps and tools to make it painless.
YNAB: There’s a free trial and they also offer a family plan (up to six) for the same single subscription price
Monarch: There’s a free trial and you can also add collaborators (other family members), and others have said this is very similar to Mint
Copilot: This app is for Mac or iOS and does have a free trial with advertised “AI-Powered” spending categories

You might be asking yourself why should you pay to have an app track your finances, but honestly the answer is in your question. These apps have a development team that is constantly providing updates and features to help you better manage your finances. You can certainly set up an Excel Spreadsheet or Google Sheets if you’re someone that wants more control.

Ultimately, the focus here is to track your income and expenses, identify areas to cut back (think daily lattes or impulse online purchases), and prioritize saving. Something you can try with online purchases is that when you see something you want, just wait 24-48 hours before making a purchase. You’re likely to find yourself not wanting or needing that item and just forgetting about it altogether.

Step 3: Credit Cards? But, the Miles

We’ve all seen the commercials: sleek cards promising exotic vacations and double points on everything you buy. Sure, credit cards can offer tempting rewards in the form of miles, cash back, or travel perks. Earning miles towards your dream vacation or snagging discounts on everyday purchases sounds pretty sweet, right?

The Truth About Miles and Rewards

Here’s the deal: Miles and rewards can be valuable tools, but only if you use them strategically.  The key is to never spend more than you can afford to pay off in full each month. Those enticing rewards programs can come with annual fees and interest rates that can quickly turn a dream vacation into a financial nightmare.

Making Credit Cards Work for You

So, how can you leverage the benefits of credit cards without getting burned? Here are a few tips:

  • Only charge what you can afford to pay off in full each month. Avoid the trap of accumulating credit card debt – the interest rates will quickly devour any rewards you earn.
  • Choose a card that aligns with your spending habits. Do you travel frequently? A travel rewards card might be a good fit. Do you spend a lot on gas and groceries? A cash back card could be more beneficial.
  • Don’t be seduced by high credit limits. Just because your card allows you to spend a certain amount, doesn’t mean you have to. Stick to your budget.

Credit cards are financial tools that can offer leverage. Used responsibly, they can help you earn rewards, put money back in your pocket and build your credit score. Used irresponsibly, they can become a financial burden. The choice is yours.

Step 4: Automate Your Savings

Setting up automatic transfers to your savings accounts ensures consistent progress towards your financial goals. Think of it like paying yourself first – treat your savings like an essential bill that gets paid every payday. This removes the temptation to spend that money and frees you from the mental burden of manually transferring funds each month.

Now, for that “dream vacation” fund, you might want to set up alerts to celebrate milestones. Imagine the email or text notification: “Congratulations! You’ve saved enough for your flight to Costa Rica!” – a little financial dopamine hit to keep you motivated on your financial freedom journey.

Step 5: Investing: Your Money Working for You

Investing might seem like a complex world reserved for fancy suits on Wall Street. But as mentioned in this post, anyone can get started with investing, and it doesn’t require a ton of time or money. The key? The power of compound interest. Think of it as your money earning interest on its own interest – like a snowball rolling downhill, growing bigger and bigger over time.

Even small, regular investments can add up significantly in the long run. The best part? There are tons of online brokerage accounts with user-friendly interfaces and low fees. These platforms allow you to invest in low-cost index funds, which basically represent a basket of different stocks. This diversification helps spread out your risk and reduces the need for constant monitoring. Remember, you don’t need to be a financial wizard to benefit from the stock market. Start small, invest consistently, and watch your money grow over time.

Step 6: Guard Your Credit Score Like Your Social Security Number

Your credit score is the key that unlocks the best financial deals. A high score translates to lower interest rates on loans, better insurance premiums, and even approval for apartments or utilities. Protecting it is crucial for your financial well-being. Think of your credit report as your financial report card. Review it regularly for errors or suspicious activity. Early detection of fraudulent activity can save you a lot of time and trouble down the road.

Step 7: Negotiate Like a Boss

Channel your inner dealmaker. Companies want your business, so maybe have them work for it. Do your research beforehand, be polite but firm, and be prepared to walk away if the offer isn’t favorable. Every dollar saved adds up. Negotiation isn’t just about saving money. It’s also about building confidence and taking control of your finances. The more you practice, the more comfortable you’ll become advocating for yourself. And who knows, maybe you’ll even land a few unexpected upgrades along the way.

Step 8: Financial Fitness: It’s Not Just About Kale Smoothies

Taking care of your health isn’t just about feeling good, it’s also about financial well-being. Regular healthcare provider visits, healthier eating, and exercise can prevent costly medical bills down the road. You can make the investment now, or pay way more later. One way to invest now is to take advantage of clean eating by meal prepping each week. As far as the shopping goes, use coupons, but only those that are for items that you’d already be buying at the store. Buy in bulk and keep an eye on those sales for items you buy each week.

We also discussed the benefits of exercise and how this can influence your mental health. You’re going to need physical and emotional strength to stay focused on your goal of financial freedom.

Step 9: Live Below Your Means, But Still Enjoy Life

Financial freedom is about choices, not sacrifices. Sure, it might involve making the daily latte at home or opting for a staycation instead of a luxurious getaway. But the beauty lies in the fact that you’ll be making these choices consciously, not out of financial necessity. Challenge yourself to get creative with your entertainment. 

Explore free museum days, have potlucks with friends, stay in for some scheduled movie nights. Just make sure you’ve paired down those subscriptions you’re not using.

You’ll be surprised at how much enjoyment you can find without breaking the bank. Focus on enriching experiences with loved ones, pursuing hobbies you enjoy, and prioritizing your well-being. These are the things that bring lasting joy and fulfillment, and they often come at a much lower cost than the latest gadget or designer label.

If you still want to have small splurges here and there, then remember Step 1 (above) about your why and the potential to make a few extra dollars. If you can find ways to pay for these little splurges without sacrificing any of the above steps, then just add this to your budget.

Remember: Financial freedom isn’t going to happen overnight. There will be setbacks, but with dedication and these tips, you’ll be well on your way to building a life you love, without the financial burden. Now go forth and conquer your financial goals.

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