Guest post from Trea S. Branch of Trea's Two Cents
- We dream of being able to support family financially without being set back
- We dream of traveling at will, all over the world
- We dream of sending our kids to college, completely paid for
- We dream of quitting the 9-5 gig waaaaay before we’re 65
- We dream of not having to work for money
- My husband and I dream of financial freedom, and here’s how we plan to get there
Wanting REAL Success
Getting on and enduring the path to financial freedom is 80% mindset and 20% behavior. That’s because our mindset determines our behavior, and if we don’t have the financial freedom mindset, it will be difficult to stick to the habits that will get us there.
So hubby and I had to mentally shift from spending carelessly without any planning, to controlling our money now so that it can do even more for us in the future.
Step 1: Define your financial freedom (list what it looks like to you)
No Debt Left Behind
It’s kind of hard to reach financial freedom when you owe money. Those monthly payments that our creditors receive could be going to savings, investments and other things will actually push us forward on the path to financial freedom.
I’m on a journey to pay off $180,000 of student debt, which is now down to $76,000. Like many other debt-free stories, I’m paying off my debt by making as much as I can and spending as little as I can, so that I can make huge monthly payments that pay down my principal. A budget is what helps me stick to this debt-free plan.
Paying down big debt forces you to prioritize where you spend (even as you make more money). Becoming debt free has to be more important than at least some of your other spending if you truly want to pay it off quickly.
Step 2: Starting with your smallest debt first, use a budget to free up as much money as possible to make your monthly payment as big as possible.
Beef'd Up Savings
Getting out of debt is a huge achievement, but avoiding going back into debt is just as important.
This is where emergency funds come in handy, and they are a must-have. An emergency fund is money set aside in savings for surprise expenses.
If you’re working your way out of debt, you’ll want a minimum of $1,000-$2,000 set aside to stop you from falling further into debt. And if you’re already debt-free, you can get to a hefty 3-6 months of your expenses.
Emergency savings aren’t the only savings that will help you on your journey to financial freedom. For example, my husband and I save for our vacations and will soon save for a car so that we don’t have to worry about starting another debt-free journey (#CashLife)
Step 3: Set aside money each month to build an emergency fund of at least $1,000-$2,000. What other big purchases should you start saving for?
The Good Kind of Interest
The real freedom comes when you don’t have to work for your money. I’m talking about when you’ve invested so much that you can completely live off of the interest that your money earns.
I’m choosing to focus first on my student debt goal, but believe me, as soon as that’s done, hubby and I will begin to invest like our future depends on it (because it does!).
Step 4: Find a trusted financial advisor to help you navigate the mix of investments that work best for your risk level.
The journey to financial freedom may be long, but with the right plan and a will that doesn’t quit, you’ll be there to see how it was so worth it!
Trea S. Branch is a money transformation coach and speaker who empowers individuals to break out of debt and into a life of freedom. Leading by example, she and her husband are paying off 6-figure student debt and building savings so they can move further on the path to financial freedom. She invites you to learn more about her personal debt-free story, coaching programs, and other resources at www.TreasTwoCents.com.