Financial freedom can mean different things to different people. Regardless of how you feel about it, we all need money to get through life. The older I get the more I think about financial freedom, and it really makes me examine what’s most important in my life, and that’s time spent with my family and friends, and time to do the things I enjoy in life.
The journey to financial freedom does not happen overnight, it takes time and effort to get there. However, money shouldn’t keep you a slave to all the things you hate, and prevent you from doing the things that you love.
If you have been doing any research on financial freedom, you have probably heard of the guru “Dave Ramsey.” He has helped thousands of people get out of debt and freed them from living paycheck to paycheck. I highly recommend his book The Total Money Make Over, which helps you plan out, step by step, how to achieve financial freedom. In addition, I really enjoy the Dave Ramsey podcast, which is totally free!
I have gathered 7 of his best tips and tricks to start you on the goal to financial freedom!
Budget! Budget! Budget!
Ugh, we’ve heard this one before (insert eye roll), but it’s ESSENTIAL to achieving financial freedom! There’s no other way to get out of debt and save for the future, without budgeting. But Dave makes it so easy with his Every Dollar Budgeting App.
With this app you can easily make a budget, track your spending, and go through the baby steps to paying off debt, saving for retirement, and reaching financial freedom.
Only use cash!
Ditch the credit and debit cards, and make it a habit to use cash in all your transactions! Trust me when I tell you that paying with cash makes you way more observant on how you’re spending your money, and you’re less likely to waste money on unnecessary things.
What I hate about credit cards is the buy now and pay later mentality, it’s so dang easy to just charge it and worry about it later, but then when you get the bill, you have buyers remorse. By using cash for all of your purchases, you will only buy items you can afford.
Use the envelope system!
This one goes hand and hand with using cash, it’s the simplest and most effective way of handling your cash, and it costs next to nothing. All you need is a couple of envelopes and a pen. Label each envelope with a category: rent, bills, savings, groceries, etc.
Once you’ve spent all the money in the envelope, you are done spending in that category. This really helps you to spend wisely and stick to your budget. If you don’t want to use an envelope for all categories, try using it just for your groceries, and extra spending money. This totally prevents me from over spending each month!
Have your savings account at a different bank then your checking!
I don’t know about you but if I see that I have money in my savings, I start thinking of ways to spend it! Stop this bad habit by opening a separate savings account, preferably one that is harder to get money out of, and one you don’t see all the time.
Last year my husband and me opened a savings account with Ally Financial and we love it! They have one of the highest percentage yields, and offer savings accounts, CD’s, home loans, and more. What’s great about it is, if we do need to transfer some money to the checking account, it takes about 2 days; this gives us time to think about whether we really want to spend the money, and not make impulse purchases. Check out how we save a grand a month here!
Save for emergencies!
The first baby step of the Dave Ramsey program, and one of the most important! It always happens, the moment you think everything is going smooth, your car breaks down, you lose your job, or you end up sick in the hospital. Whatever the story, having $1,000 dollars set aside for these occasions can be a life saver.
Only buy what you really need and can afford!
This one is easier said than done, there is always going to be some amazing sale happening or cute little outfit that you want. If you see an item at the store you really want but don’t really need, why not give yourself a day or two before making the purchase. Nine times out of ten, you’re going to forget about the item, or reason that you don’t really need it.
Remember every single dollar counts and is allotted towards your budget, and if you stay on track you’re so much closer to financial freedom.
Snowball that debt!
If you’re not careful, debt can block you from financial freedom, and before you know it you are pushing retirement and still in debt. One of the most important tools Dave Ramsey uses is the snowball method. Start by listing all of your debt from smallest to largest, the Every Dollar app will help you do this.
The smallest debt is your priority, make minimum payments on the other debt, and put all your extra money towards the smallest debt. Once you have paid off the smallest debt, take that money and any extra, and put it towards the next debt, from smallest to largest. By the time you’re done paying off the smallest debts, you will have so much extra cash for the big ones, that you will pay them off in no time! If you want to learn more about the debt snowball, check out how the debt snowball method works.
Whether you apply a few of these methods or all of them, I hope they can motivate you to achieve financial freedom. I would love to hear from you, please comment below!
