In a culture where we are constantly bombarded with messages to buy, buy, buy, so a budget can feel like a prison. When we see our neighbor drive up in a shiny new car or our best friend rocking new designer shoes, it can make us feel like our budget is designed to keep us from living the life we want.
This kind of thinking is a trap. What you don’t see is the debt that possibly comes with those purchases. The reality is that budgeting doesn’t limit your freedom. It actually sets you free—free to have control over your work-life balance, free to pursue your biggest dreams, free from a cycle of constantly working to pay off money spent on things you don’t even own or care about anymore.
How do you get this freedom? I did it by using good ole discipline, setting goals, and Dave Ramsey’s course (Financial Peace University). This is not an affiliate post. I don’t earn a penny by endorsing his program. I just know that it works because I am walking proof of it, and I want to share it with anyone else who is looking for a way out of debt and into financial freedom.
How do you get financial freedom?
Dave Ramsey offers several practical tips for making his plan work, and I want to take a closer look at the ones that worked for me.
- Prioritize Your Needs– Ramsey calls the most essential elements of your budget the “Four Walls”: food, shelter/utilities, basic clothing, and transportation. These are the elements you need to remain safe, healthy, and productive, so budget for them first. As a minimalist, one of my goals is to pair down to the essentials. This concept touches on not just the items we have in our homes, but what we purchase and bring into our homes. Create a list with your partner on what are the absolute items needed to survive. When we lived in Houston and Kris commuted everyday toll roads were a part of our transportation essentials to have a job. I hate paying tolls but it was part of the necessary budget.
- Use Zero-Based Budgeting– To get control of your money, sit down each month and assign every dollar you have to a specific goal. That could be paying a bill, going into a savings account for a specific purpose, going into a “fun money” category, or going into a general savings account for emergencies and unexpected expenses. Are you rolling your eyes, don’t worry I am too. “Glenda, ain’t nobody got time for that”. BUT if you want to gain financial freedom in your life, you have to make changes. Changes in your everyday behaviors and one of those changes are sitting down every week, every month and monitoring this zero-based budget. I promise you, when you do this it will take you from “I don’t have any money for vacations” to “I have money for vacations”. This is a powerful step! This is how smart people take vacations!
- Be Attentive– Be mindful. You can’t just make a budget for one month and let it carry through for the whole year. Expenses change. Emergencies happen. You need to make going over your budget a regular part of your life. Again, I am stressing in order to see results you have to make changes to your routine. Your old routine didn’t work, that is why you are here right?
- Get Debt-Free– If you’re like many people, you are carrying debt. Maybe it’s credit card debt, a car payment, medical bills, student loans, or a mortgage. Getting debt-free is key to your financial freedom, but it can feel overwhelming. Use the Snowball Plan and Ramsey’s 7 Baby Steps to make it more manageable. This isn’t simple and it takes time. And if you are serious about getting out of debt I highly recommend taking Ramsey’s Financial Peace class. Yes, it’s about $100 but it’s well worth it. If you are so strapped for cash, check out Dave’s website. There is TONS of free information there to get you started.
- Schedule Your Spending– Rather than let expenses be a surprise, take control of when they will happen. Using autopay to schedule all recurring bills and setting specific recurring dates for ongoing shopping like groceries gives you more control over your money. I love auto pay because it saves me time and money from late fees. There is no reason to have a late fee because you forgot to pay a bill. Period.
- Plan for the Unplanned– One mistake people make is thinking too optimistically when they make their budget and not leaving themselves a buffer for emergencies or simply spending too much in a category. Give yourself some wiggle room by building it into the budget from the beginning. This is a hard step and it takes time to master it. I am going, to be honest, I don’t feel like I have mastered this yet. Health issues bring on a lot of new expenses Kris and I didn’t have when we were in our 20’s. I am glad to have my emergency fund and 3-month savings because life takes all kinds of weird turns.
- Use Technology– There are a whole host of programs and websites that will help you manage your money and see everything at a glance. Mint.com is an excellent choice for planning and monitoring your finances, and this is what we use. I believe Dave uses Everydollar.com to check them both out.
- Find Contentment– This is probably the most philosophical and least tangible of the tips, but it is absolutely necessary. You have to stop looking at other people’s possessions and comparing them to your own. You have to learn to be content with what you have and separate a genuine desire from a moment of envy. If you don’t, you’ll fall back into poor spending habits. When I feel the stuff envy creeping up, I mindfully take a step back and begin saying what I am grateful for at that moment. For example, if I see someone our age with a brand new RV, I start to dream of what our life can look like without so many maintenance issues with our older RV. I stop and remember, I am grateful for the RV I have for there are A LOT of people out there who don’t have a home or RV. I am grateful for all of the work we did over the last 10 years to get out of debt and build online businesses to live this life. I am grateful this RV is paid off, and I don’t have any payment burdens. This step is so important in our mindful journey, and we’ll address it over and over. This is the golden ticket to freedom, in my opinion, is to be content with what you have now.
- Set Goals– One of the ways to keep comparisons and jealous spending at bay is to know why you’re saving money in the first place. Are you hoping to build your dream house? Take an amazing vacation? Fund a wedding? Go scuba diving? Whatever it is, set goals and use them to keep you focused and motivated. Remember setting goals isn’t enough. You need to need to add measurable action items on HOW to achieve that goal if you actually want to achieve it. For example, you are dreaming about scuba diving in Iceland. Doesn’t that sound aaaaamazing? You need to figure out all of the costs it will take to travel, sleep, eat, rent out equipment, do all of the things for that trip. Let’s say that comes out to $7k (I just made up this number) and you want to go in 12 months. That means 7,000/12 is $583.33. You need to save/make/do what you need to do an extra $583.33 for 12 months so you can take this trip with peace of mind. Break it down and figure out what you need to actually do each month to achieve this goal, and then do it!
- Be Kind to Yourself– Switching your entire approach to finances is a process, and if you are like me you probably aren’t going to get it right on the first try. It takes trial and error, and you need to be patient with yourself while you figure it out. We are so hard on ourselves in general, and I like taking the gentler approach of being kinder to myself. I used to beat myself up when I made mistakes and that got me nowhere except Depressedville. I don’t like visiting Depressedville, so I choose a different path to be kinder to myself and it has worked ever since.
Those are the tips that really helped me get control of my money and find financial freedom. I love what Dave says “you have to live like no one else, in order to live like no one else”. This statement is so powerful. We have to put in the work now, let go of instant gratification and be more mindful and focused on the goals we want to achieve.
Let me know in the comments which ones resonated the most with you.
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