Achieve Financial Freedom

Financial freedom is the ability to

“make financial decisions without being overly stressed about the financial impact because you are prepared.”

Dave Ramsey, How Do I Achieve Financial Freedom

Financial freedom is when you do not worry about how you are going to pay for that?

Need to make an unexpected trip home? Sure it is a dent in your budget. However, financial freedom means you can afford it.

Financial independence is

✈ Want to go for a vacation with your family? You can plan ahead and start saving for it without straining your monthly budget.

? Thinking of Christmas and gifts? Luckily you don’t need to go into debt because you have prepared ahead for the holidays.

?Considering quitting your job and look for an alternative career? Financial independence will spare you those sleepless nights.

“When you are financially independent, you have options. You don’t have to wonder if your bank account can handle replacing your hot water heater or buying groceries for your single mom who just lost her job.”

Chris Hogan

You think this is too good to be true? Let me tell you it is definitely possible. Yes, it is important to start right and then be disciplined along the way.

In this article we will talk about the things you need to get the right start. After all as they say, a good start is half the job done.

Your First Steps To Financial Independence

Track Your Expenses

Before you start a journey, you need to know where you are right now. In order to gain control of your money you need to be aware of where it is going. Girl, you need to track your expenses.

The underlying principle of tracking expenses is to note down every dollar that goes out.

There are many expenditure trackers available to help you. If you prefer being online, then download one of the many apps available for the purpose on your phone. Or use a spreadsheet on your laptop. There are templates available or you could make one customized for your requirements.

If you are the pen and paper kind of person, a quick search on Pinterest will throw up many ideas that you can make your own. You will find tonnes of free printable templates there.

I have made a Pinterest Board of expenditure tracker templates just for you. Follow my board for some inspiration. I keep adding new ideas from across the internet over there.

Have a Plan For Your Money

Living on a budget means having a plan for your money according to your financial priorities. It mean living large on a budget you can afford.

Your monthly budget is your plan for your money. You decide how you want to spend your money.

Yes, there are bills you have to pay and certain variable expenses (food, personal expenses, household stuff, etc) you have to plan for first.

Once you have allocated funds for these two, you start to think of your financial priorities and goals. If your debt keeps you awake at night, repaying it off first would be your financial goal. Want to take your kid to Disneyland? Use sinking funds to save for it.

Read More:
How To Close This Month’s Budget and Set Up Next Month’s.

Build an Emergency Fund

An emergency fund is a stash of money you put aside to deal with curve balls that life throws your way.

A broken bone, lay-offs, a burst water heater – any of these events means unplanned expenses which are costly and stressful.

Your emergency fund can help you get over these situations without having to worry about unpaid medical bills, overdrawing your checking account or being late on your mortgage payment.

Building a basic emergency fund should be among the first financial priorities you set out for yourself.

How much should you save in your emergency fund? There is no one answer. It depends on your situation. Head over to this article where I go over the question of what amount you should target for your emergency fund in some detail.

Use Sinking Funds

Let us be honest. We all have dreams. Have a big celebration for our child’s birthday, go for a family vacation, upgrade to larger car.

Not all of us are able to afford these out of a single month’s income. We gotta plan ahead and save up for them.

Sinking funds are a life saving budgeting tool that allow you to do just that. Christmas and holidays are meant to be fun. Setting aside a small amount each month in a saving account earmarked for it helps you avoid credit card debt and heartburn during the holidays.

You can save for multiple goals. Use a sinking fund tracker helps you to know what amounts you have saved towards each goal and how much more you have to go.

psssst….. A FREE printable sinking fund planner and tracker bundle is available in my resource library. Sign up below to get access.

Stay Away From Credit Card Debt

A credit card is a convenience. If you are unable to pay your bills at the end of the month then you are living beyond your means.

Use a credit card as a tool for the convenience it offers while making payments or for the benefits it offers like discounts and reward points.

What if you have incurred credit card debt or need to do so?

Make yourself aware of the cost of your credit card debt i.e. what you will actually end up paying for keeping amounts outstanding after the due date. This includes interest as well as fees. This bumps up the cost of your purchase significantly. Does it still make sense for you to carry on with this debt?

Start small. Start Investing.

In order to achieve financial freedom or to retire early, it is important to invest regularly, even if it is a small amount.

Plan to save for your financial independence or even your (early) retirement. The importance of starting early cannot be overemphasized.

Take full advantage of any matched investment schemes (like 401K) that your employer offers.

What else would you do when you start out on your path to financial freedom?

path leading to rainbow


  1. Marina Smith

    May 28, 2019 at 6:56 pm

    hey bhavna, I really liked your ideas in this article. keep writing..

    1. pennies4cents

      June 7, 2019 at 12:10 pm

      Thank you, Marina. Glad you liked it. Hope you come back for more.

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