Welcome back to my series on building a foundation to have the freedom to follow your dreams. I introduced the idea behind this foundation in Part I. If you missed it, you can go back and read it here. So far, I’ve covered the first element of the foundation – Good Health and the second element – Supportive Relationships. The next step is to work on your financial fitness and that’s the topic of today’s post.
It’s difficult to make progress in the other three areas if you’re constantly worried about how you’re going to pay the bills. Unfortunately, reports indicate that close to two-thirds of Americans would not be able to cover a $500 repair bill without borrowing money.
But you don’t need to live like this. Earlier this year I launched a series on creating financial freedom. If this is an area you’re working on, I encourage you to go back and read the series. Start with Step One and work your way through, it’s filled with great information.
Just like the other elements, taking control of your finances will help you in all areas of your life. You will improve your health by reducing stress. Your relationships will flourish when money is no longer a tension point. And you’ll be able to accelerate your personal growth by taking calculated risks.
Financial Fitness comes down to one simple idea. Spend less than you make so you have the freedom to save and give.
Here are five steps that will help you build your foundation.
1 – Track Your Expenses and Budget
It’s impossible to manage your resources if you don’t know how much is coming in and going out. I covered how to track and budget in Step One and Step Two of my series on financial freedom. There’s a lot of flexibility to make this as simple or detailed as you like. What’s important here is that you’re telling your money where to go rather than wondering where it went.
2 – Save
Having a financial cushion is a game changer. As little as $1000 is enough to help you escape the cycle of debt. I cover all the different ways you can save in this post. The more you sock away, the more freedom you will have to go after what you want most in life.
3 – Ditch Debt
I have lived with debt and without. Knowing what I know, it’s very unlikely that I will take on debt in the future. I cover how debt limits your freedom in this post. And how to get rid of it here.
4 – Build a Foundation of Wealth
As you begin to clear up your debt and start building financial freedom, you’ll want to start thinking about building wealth for you and your family’s future. I cover the ins and outs of building a nest egg in this post.
I don’t know about you, but I don’t feel confident that I’ll be able to live off of Social Security when I can no longer work. Building wealth now will ensure I have a roof over my head and food on the table as I age. It will also allow me the privilege to give generously and leave the world a better place.
5 – Give and Enjoy
We are rewarded for our service to others by our income. It’s okay and expected that we use some of that money to enjoy life. My rule of thumb for spending outside of our needs is if it doesn’t bring you joy, say no. And if it does, enjoy it within your means.
Part of doing well with money is sharing it. Find organizations that align with your values and help them on their mission. It’s a lot of fun to make deposits that leave the world a better place.
Focusing on these five simple steps will change your financial future before you know it. As you begin to take charge of your finances, you’ll start to see positive changes in the other areas as well.
Creating the foundation to live our best lives if a lifelong journey. Give yourself the grace to be okay with where you are while finding the determination to keep moving forward.
Don’t miss the other five parts of this series. Here’s what you can expect.
Part I – Building a Foundation to Freedom
Part II – Freedom through Good Health
Part III – Freedom through Supportive Relationships
Part IV – Freedom through Financial Fitness
Part V – Freedom through Personal Growth
Part VI – Tying it All Together and Taking Action
