We have spent the past three weeks on The Stress-Less Show talking about how to manage your debt, budget and money mindset because let’s face it, money can be a touchy subject for a lot of us. We all wish we could live a life where money was not something that we had to worry about all the time. That’s why I brought on money expert Kristy Runzer of OnRoute Financial to share some tips on how to start working towards financial freedom.
Define What Financial Freedom Means To You
I know we all have had those moments when we sit and daydream about how much better life would be if we won the lottery and had millions of dollars. There is a probably a huge list of things running through your head of things you would want to do, experience or have if you did not have to worry about money. However, Timothy Ferris says in his book The 4-Hour Work Week, the goal is not to be a millionaire, but to figure out what you need in order to live the life you think you would have as a millionaire.
So while your list of what you would do might just be a passing daydream you revisit after a long day of work, Kristy’s first tip in working towards financial freedom is to start thinking about all of those daydreams and clearly outline what your life would look like after achieving financial freedom.
“Is [financial freedom] having the ability to get a massage every week or take your family on vacation a couple times a year? Or doing work that you love, get out of the corporate job, retire early? Really defining what is important to you, what you value, what your goals are - that would be step one.”
As you do this exercise of defining your version of financial freedom, you might find there some things you want to achieve or do when you are financially free that you can actually do now to start to feel closer to that goal. “You don't have to wait until this day in the future when you have more money to be able to do something that brings you joy and that you love. Start to find that freedom and that joy today and that can be financial freedom for you.”
Get Clear On Where You Are Today
After envisioning where you are heading, Kristy’s next tip is one that she knows is a scary one for most of us: facing the amount of money we spend, save, invest, and owe. When it comes to money, many of us have a fear of the unknown. When we don’t check our numbers, our minds start to spiral around how much debt we think we might be in. We become so overrun with that fear that the fear of our unknown numbers prevents us from doing anything at all to get to a place of financial freedom. Kristy noted though, that often, the fear of looking at the numbers is worse than what the numbers actually are.
“When I'm working with clients who are in that fear mode and they're avoiding [their numbers]... end of the meeting comes around, they're like, ‘Oh. That wasn't too bad and actually, that was kind of fun and I feel really empowered now because I know and it wasn't as bad as I thought it was going to be.’”
Tracking your numbers doesn’t have to be super involved to start either. Kristy suggested starting with a budgeting app or program first to begin tracking your monthly income and expenses. Whatever you can do to lessen that fear of the unknown and understand your financial situation is going to help you craft a plan towards the financial freedom you have defined for yourself.
Take Small, Easy and Fun Action
Kristy’s last tip is my favorite step in accomplishing your financial goals. Now that you have defined financial freedom and gotten familiar with your current financial situation, it is time to start making small and manageable changes based on your current situation that will get you to your vision of financial freedom over time.
“My philosophy is around keeping it simple easy, fun, and just doing a little bit over time. Maybe [do] one thing a month, one thing a quarter, whatever your pace is, but just being consistent so when you are taking action, it doesn't feel like this big heavy scary thing.”
Reaching financial freedom can seem like an overwhelming hurdle to try to reach. However, keeping the steps you take simple, understanding where you are, and setting clear end goals will help you stay focused on your financial journey and feel less afraid and overwhelmed by your finances. The path to financial freedom may seem long and stressful, but you can get there if you take it one step at a time.
If you are unsure of how to start setting financial goals for yourself so you can get to a place of financial freedom, you can sign up for Kristy Runzer’s free online six-day money goal course here. This course will help you to start to define what financial freedom looks like to you and put a number to see how much money you would have to save towards your different goals.
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