What does financial freedom mean to you? This is a question that many people ask themselves. The answer isn’t always easy and can be different for everyone. For some, financial freedom might mean being able to afford anything they want without worrying about money. For others, it might mean being able to retire early and travel the world.
Still others might see financial freedom as the ability to provide for their family and give them a comfortable life. There are many different ways to define this important concept. At the end of this post, you'll find some journal prompts to help you explore what it means to you.
Where do you start when it comes to financial freedom?
For me, financial freedom means not feeling limited by what I can do. Right now, that means focusing on lowering my debt level. Debt payments really limit what I spend my income on, because so much of my income must first go to pay the mandatory monthly debt payments on things like my mortgage, student loans, a business loan, and even credit card debt. (I'm not proud of that last one, but I want you to know where I'm coming from.)
For many people, the first step to financial freedom is getting out of debt. This can be a difficult task, but it's important when focusing on your long-term goals. If you have a lot of debt, it can feel overwhelming to come up with a payment plan that will get you out of debt faster. Take a deep breath and start where you are now. Let me explain.
Many people, including myself (at one point in time), don't know how much money is currently going in and out of their bank and credit card accounts. Before you can start creating a debt payment plan, you need to know these details. The first step in what I like to call my TREE Method for improving personal finances is tracking your income and expenses.
Once you know how much money is going in and out of our accounts, you will be in a much better position to start paying down your debt. When you're on your way to paying off your debt, you can start working on building your savings. This will give you a cushion in case of unexpected expenses and help you reach your financial goals faster.
How can you pay down debt faster?
You might be wondering how tracking your income and expenses can help you pay off your debt faster. The answer is simple: By knowing where your money is going, you can make changes to your spending habits that will free up extra cash to put towards your debt.
For example, let's say you spend $50 a month on coffee. If you were to cut out this expense and put the $50 towards your debt, you would have an extra $600 that you paid off over the course of a year. This extra money can really add up, and it can make a big difference in the amount of time it takes to pay off your debt.
Of course, you don't have to cut out all of your expenses in order to pay down your debt faster. But by tracking your income and expenses, you will be able to see where you can make changes that will lead to big results when it comes to your debt and your goal of becoming financially free.
There are a few other methods you can use to pay down debt faster. One method is consolidating your debts into one loan with a lower interest rate. This will help you save money on interest and make it easier to keep track of your payments. Another method is negotiating with your creditors for a lower interest rate or a payment plan that works better for you.
If you're really struggling to make ends meet, there are organizations that can help. These organizations offer debt counseling and assistance with creating a debt repayment plan. They can also help you negotiate with your creditors and lower your interest rates. Make sure you do your research before working with an agency like this. Government websites are a good place to start.
Unfortunately, some companies will take advantage of people who are already in dire financial situations by doing things like charging too much for their services and not following through on their promises or granting loans with extremely high interest rates. These types of things would make your task of getting out of debt much more difficult.
How do you start a savings plan?
You can start saving for your future at any time, but it does become easier once you no longer have the burden of debt payments. There are a few different ways to save money. One way is to create a budget and stick to it. This will help you track your spending and make sure you allocate a certain amount to savings every month.
Another way to save money is by making changes to your lifestyle that will lead to long-term savings. For example, if you usually eat out for lunch every day, you could start bringing your lunch from home. This is another reason I recommend you track your income and expenses. When you do this, it becomes so much easier to see where you can make beneficial changes.
If waiting until you've paid off your debt before you start saving money doesn't feel right to you, you can start saving at any time. Even if you can only save a little money each month while you are paying off your debt, it will add up over time. Remember the example above where cutting back on coffee resulted in an extra $50 per month. You could put $25 towards your debt and $25 per month in savings (or any combination you come up with). The key is to have a play that is doable for YOU.
Affirmations are positive statements that can make a huge difference in helping you achieve your goals. Here are several I like for financial freedom.
- I am worthy of financial freedom.
- I am in control of my finances.
- I am open to new opportunities for financial growth.
- I release all fears and doubts about money.
- Every day, I am closer to financial freedom.
- Making more money is easy for me.
- My relationship with money is healthy and supportive.
If you enjoy using affirmations and want more ideas that are specifically about attracting money, check out my Prosperity Prompts card deck where you'll find many more affirmations like those above.
Journal Prompts for financial freedom
At the beginning of the post, I mentioned journal prompts to help you discover the meaning of financial freedom as it relates to you and your situation. Here are a few to explore to help you get clear on financial freedom and how you can start working towards achieving it.
What does financial freedom mean to you?
Open your journal to a new page and write about the meaning of financial freedom. There is no right or wrong answer here and nobody will see your writing if you don't want them to. So, be honest with yourself. What is your vision of financial freedom? How does it feel? What are you doing? What does your life look like?
How would your life change if you were financially free?
This question is for you to discover the reasons why you want to be financially free. Maybe there is something in your life right now that you're unhappy with and you think this would be different if you were financially free. Is that really the case? Is there something you can do about it right now?
What steps can you take today to start working towards financial freedom?
Even changing your mindset can help you achieve financial freedom. You'd be surprised at the big difference small steps make. Brainstorm all the things you can do now to take small steps in the direction of your goal of becoming financially free.
For more journaling prompts like these, check out the Financial Freedom Journaling Challenge where you'll learn how to let go of money blocks and work towards your ideal financial future.
Financial freedom is something that means different things to different people. For some, it might mean being debt-free. For others, it might mean having enough money saved for a rainy day. No matter what financial freedom means to you, it's important to start working towards it today. You'd be surprised at how far small steps will take you on the road to your financial goals.
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Author bio: Michelle Cornish is the author of Prosperity Planner: Manage Your Personal Finances and Get Out of Debt, an undated planner where she shares more about her personal financial journey and her TREE Method for keeping her personal finances in check.