Financial freedom sounds great, right? Being debt-free, owning your home, not worrying about your bills or emergencies, and being all set for retirement are the basics. Depending on your vision for your future self, you may want more than that. Some people see financial freedom as not being tied to a 9 – 5 job, being able to travel the world, or going out for entertainment when they want.
These are all fine goals to have and completely achievable, but you need to have a plan. Read these steps to reaching financial freedom for some great ideas on how to start. Once you have a plan together and know where your priorities are, you can pick and choose your strategies from this list to help you along the way. Putting all of them together will give you the maximum benefit, and you will feel great knowing you are well on your way to the financial freedom you dream of.
1. Put Money in Your Savings Before You Pay Your Bills
It may sound counterintuitive, but you need to make saving money a priority, and you are more likely to stick to it if you save before spending money on anything else. You have to pay your bills, so you will find a way to do that any way you can. But when your savings strategy is merely tucking away what is left over after everything else gets paid, then there usually isn’t much to save. Designate an amount you want to put back per pay period, and find ways to generate more income if your bills are not covered.
2. Pay Your Bills on Time
Obviously you need to be realistic about how much money you put into your savings if you are going to use the first method on this list. You can generate more income to cover your bills, but do pay them on time. Late bills lead to late fees, which is a waste of money. Paying your bills late can also damage your credit score, making it more expensive to borrow money if you need to.
3. Stop Paying for Things You Don’t Use
These days, most of us have a subscription we either do not use or could split with someone else. For example, you don’t need to pay for both Netflix and Hulu even though you love to watch both Stranger Things and reruns of Brooklyn 99. You probably have friends who are also paying for both subscriptions, so ask around and see if any of them want to split the bill. You pay for one, your friend pays for the other, and you share accounts. Evaluate those small bills because they can add up quickly, then decide what goes and what can be reduced.
4. Stop Paying ATM and Other Banking Fees
If you are paying banking fees at all, you are paying too much for your banking. There are plenty of accounts out there that do not charge fees just to hold your money for you. Make sure you get a supply of cash when you have the opportunity to stop at an ATM associated with your bank, in order to avoid paying up to $10 just to have the cash you need for bus fare.
5. Use Cash
Speaking of ATMs, cash is harder than plastic to spend. When you use cash, there is a tangible amount of money leaving your hand instead of a casual swipe. Imagine having to count out $5.79 and deal with change every time you stop at Starbucks for that venti caramel latte. It might at least make you think twice before you buy.
6. Make Your Own Pizza
Blogger Mr. Money Moustache says pizza delivery is for millionaires and when you think about it, he’s right. Pizza delivery costs a minimum of $20, and that’s if you order the smallest one-topping pizza and barely tip the driver enough to cover gas. Making your own pizza at home costs less than half that amount, and it will likely be healthier too. Take care of your health and save money all in one swipe by making your own pizza at home.
7. Save Your Money For Experiences, Not Stuff
Having stuff is great, but experiences with people you love bring a more lasting happiness. Experiences create memories, teach lessons, push you out of your comfort zone, and help you grow as a person. Stuff breaks, wears out, and fades with time. When you share an experience with someone you love, those happy memories will stay with you for the rest of your life, and they are priceless.
8. Make Choices to Spend Money
When you have a handle on your spending, you can be more conscious about the choices you make. You no longer feel like you need that latte from Starbucks, but you can make the choice to treat yourself sometimes. And that is the difference between the impulsive spending that comes with being trapped in a cycle, and conscious choices that comes with financial freedom.