8 Game-Changing Financial Freedom Tips

1. Understand Where You’re At

You can’t achieve financial freedom without knowing your starting point. Looking at how much debt you have, how much savings you don’t have, and how much money you need can be a depressing reality. But this is a valuable step in the right direction.

Compile a list of all your debts: mortgage, student loans, car loan, credit cards, and any other debt you may have accumulated. Don’t forget to include any money you may have borrowed from friends or family members over the years.

Now, take a deep breath. And another one. Then add up all the numbers.

How much debt do you have?

If it’s a big number, don’t freak out, I promise I’ll share some ways to pay that down later in this article. If it’s a small number, congratulations! Feel free to share your financial freedom tips in the comments below.

Next, take a look at all the money you have saved up.

Compile a list of all your savings: savings accounts, stocks, company stock-matching programs, company retirement-matching programs, and retirement plans. Then we’ll add the recurring monthly payments you receive such as salary, side hustle money, and so on.

Keep these numbers in mind as we work through the next few financial freedom tips.

2. Look at Money Positively

Debt can definitely be a little bit discouraging.

But remember that money is a good thing, even if it seems to carry a lot of burden right now.

You deserve to achieve financial freedom.

According to You Are a Badass at Making Money by Jen Sincero, people who don’t make a lot of money often feel shame when it comes to making money. And so the biggest obstacle that many people experience when it comes to making money is that they feel like having money is bad. Many feel guilty for having it and guiltier for wanting it.  Sincero has said about money, “We use it everyday to enhance our lives, yet we always seem to focus on the negative about it.”

Money is simply a necessity like food or water. It helps you buy the things you need and live the life you want.

To experience financial freedom, you’re going to need to look at money as a tool to help you achieve your dreams, fuel your energy, and live a stress-free life you can enjoy.

Because if you view money negatively, you’ll subconsciously sabotage your chances of making it and keeping it.

3. Write Down Your Goals

Why do you need money?

Do you want to get rid of debt for good? Are you desperate to escape the 9-to-5 grind? Is there a place you’ve always wanted to travel to? Do you need to save for a wedding, kids, or retirement?

When I achieved financial freedom, it was because I tied it to an emotional goal. My goal was to get out of student loan debt and save for my first home. And honestly, it was a euphoric experience watching the debt dwindle away and my savings rise.

I got so excited by seeing the numbers change that I worked harder to make more money to see a bigger change in my personal finances. Would I have achieved my goal of financial freedom if I hadn’t tied the goal to something emotional? Probably not. I was desperate to get out of debt and move out of my parent’s house. That desperation kept me motivated throughout my journey.

Another interesting thing happened. In February 2016, I wrote on a scrap piece of paper a few of my goals:

Make $100,000 selling products online

Save $20,000 for a down payment

Pay off $24,000 worth of student loans

I ended up misplacing that paper and completely forgot about it. And then one day, just over a year later, when I was already living in my new home, I found the it in my notebook. Sure enough, I had accomplished all three things. The funny thing was that I wasn’t even consciously thinking about those goals.

You might not accomplish everything you want in a month. But a year is a long time to make progress on your goals. Make sure your goal is tied to a specific number that you want to hit. Believe it or not, you’ll start working towards those goals without even realizing it.

Knowing exactly what you want to achieve makes achieving financial freedom a million times easier.

4. Track Your Spending

An important step toward financial freedom is tracking your spending.

You can use a tool like Mint, which will let you know how much money you’re spending, which categories you’ve overspent in, how much money is in all of your accounts, and how much debt you have.

5. Pay Yourself First

You’ve probably heard the expression “pay yourself first” before. But in case you haven’t, “pay yourself first” means putting a specific amount of money in your savings account before paying anything else, such as bills. And the act of paying yourself first has helped countless people inch closer to achieving financial freedom.

Why?

Because if you want to pay yourself $1,000 per pay period first, then whatever’s left over needs to go towards bills. And if you don’t have enough to cover those bills, then you’re forced to pick up a side income to make up the costs.

By paying yourself first, you guarantee that you’re always putting money aside to invest in yourself. By doing the opposite, you only get whatever is left over, which usually isn’t substantial enough to help you experience financial freedom.

You can pay yourself first in other ways too. For example, if your company has a retirement savings program, you can ask to have money withdrawn for your retirement. That way you’re investing in yourself and your future first. The money gets deducted from your pay so everything that’s left over is money that you can put aside for your bills and expenses.

6. Spend Less

In 1958, Warren Buffett purchased a five-bedroom home for $31,500 and hasn’t moved out of it since. His net worth? An astounding $90.3 billion. He can afford a bigger and more expensive home. But his frugality might very well be the reason why he’s one of the world’s richest people.

7. Pay Off Debt

Some people will tell you it’s wiser to invest your money in stocks instead of paying off your debt. If you’re an expert stock picker, maybe that’s true. But if you’ve never invested in stocks before, you could wind up with more debt.

A lot of people feel the same thing after finishing their last debt payment: relieved.

If you have $50,000 of debt, even if you have $30,000 cash in the bank, you can’t really call yourself financially free. You’re still $20,000 in the hole.

While paying someone else isn’t as glamorous as having money in the bank, it does bring you closer to financial freedom.

There are two main methods of paying off debt: snowball and avalanche. Snowball is when you pay off the smallest debt first. Avalanche is when you pay off the debt with the highest interest rate.