When you think about “financial freedom,” what does this mean to you?  Do you think about buying expensive things like cars, boats, 4-wheelers, clothes, shoes, purses, etc.?  Or do you think about a stress-free life with no debt, no bills, no debt collectors calling you?

When I think about financial freedom, I start to imagine my life without debt, in a home that is paid for and if I want to leave a $200 tip for a kind waiter/waitress to bless them in some way, I CAN!

Financial freedom means something different to everyone, but at the core, it requires the same thing for everyone.  Financial freedom does not exist if you are in debt. You are not free to make whatever money decisions you want to make if you owe somebody else money.

Do you have what seems like an insurmountable pile of debt?  Are you behind on bills? Do you feel like you can’t catch a break?  I have been there friend!

The biggest hurdle to conquering your debt is believing you can.
Guess what?!  YOU CAN!!

No matter what your debt burden is or your personal circumstances are, you can begin to get your debt under control.  The first thing you have to do is change your mindset.

You want to get out of debt.
You can get out of debt.

Where should you start to get financial freedom fast?

Let me introduce you to a man who will change your life.  Dave Ramsey.

This man is incredible.  He went from losing everything and being completely broke (with a family) to getting himself out of debt and changing his family tree for generations to come.  He is a man with a plan.

He breaks down how to change your handling of money and how you view your money, to allow you to become debt free.  There are tons of resources at the Dave Ramsey website to set you up with books, DVDs, audio books, budgeting forms, etc.

His format/belief is there are “7 Baby Steps” to getting out of debt and achieving financial freedom.  The first place to start is reading his book The Total Money Makeover.

What are the 7 Steps to Financial Freedom?

Step 1 – Set up an Emergency Fund

Save $1,000 FAST!  Have you ever been planning to make a payment on something and then BAM!, your car breaks down or your bathtub starts leaking?  Emergencies will ALWAYS sabotage your budget! What’s silly is, you know you will have emergencies (ie. things that were not planned for), so why not plan for the emergency?

Most things can be covered by $1,000 pretty easily.  I personally have had to dip into our emergency fund for some car repairs a couple of times, an air conditioner that went out in July when I was 9 months pregnant (yes, that happened), and a basement that flooded from a tree root growing into one of our pipes.  I was always so thankful to have an emergency fund so I could fix what needed to be fixed and not be stressed out by it.

Step 2 – Get rid of debt!

This step is probably the hardest, but most satisfying.  In Baby Step 2, you should be paying off all of your debt except your home.  The best way to do this is by using the “Snowball Method.”

What is the snowball method?

Glad you asked!  The snowball method is all about momentum.  Some people think “logically,” that you should pay off your debts from the highest interest rate to the lowest interest rate.  This makes sense from a purely financial standpoint, however, lots of people fail at this.

The reason for the failure is the plan didn’t take into account our emotional, human brains.

The snowball method process works like this:

First, you list all of your debts from smallest to largest.  Then you pay off your first small debt = WIN! You just knocked out some debt!  Then you take the money that you were applying to that payment and roll it into the payment of your second smallest debt.  Then you pay that debt off = WIN!

Can you guess the next step?  That’s right, you take that payment you were making and roll it into your third smallest debt payment…..see how you can pick up momentum with this??

When you start small, you get some early “Wins” that will keep encouraging you and start to help you build up the ability to make bigger and bigger payments on the next debts, until one day…..YOU’RE DEBT FREE!

This method helps you out emotionally to stay motivated with those early quick wins.  This method is more effective because of that.

This step can also be the longest for some people depending on their debt load and income available to make progress with.

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Step 3 – Save 3-6 months of expenses

This is the ULTIMATE emergency fund.  Imagine looking in your bank account and having 6 months of living expenses just hanging out there.  What a fantastic feeling that would be! This step allows you to never have to worry if you suddenly can’t work or you have lost your job unexpectedly.  This is your safety net in case of a terrible emergency that causes you to lose an income.

Step 4 – Invest!

Step 4 is all about retirement, and don’t we all look forward to retirement??  I know my husband and I are just in our 30’s and we talk about retirement a lot.  I’m not sure if we are just lazy at heart or really just want to do whatever we want.  Either way, this is an important step to ensure we get there.

Invest 15% of your household income into retirement.  It’s very simple, but over time, this will afford you a very nice retirement.  Wouldn’t it be incredible to be in your 60’s and be a millionaire? You can totally achieve this!

Step 5 – Start college funding for your children

How amazing would it be if you could pay for your kids’ schooling?  I had to pay for school on my own…..and by pay for it, I mean I borrowed a CRAP TON of money (poor decision).  I think about my classmates from vet school who had their parents pay for their entire education. They got to graduate debt free.  I can’t even comprehend that.

They have complete control over what happens to their income.  I will be paying off my schooling for the next 10 years….and that’s a fast pace if I throw everything I have at it, while still trying to grow my family and take care of them.  This isn’t even trying to live above our means. The general public has this perception that doctor = rich. Well, let me tell you….not the case.

If I can provide a paid for education for my children so they don’t have to feel this burden for years to come, I will do that for them.  Don’t you want to do the same?

Step 6 – Pay off your house early

What?!  This is such a foreign concept in our culture.  Everyone and I mean EVERYONE, has a house payment.  This is “normal” in our society. Car payments, house payments, credit card payments, loan payments…I could go on.

Take a minute and imagine you don’t have a house payment….what would that feel like?  Pretty FREAKING AWESOME! With no debt and no house payment, your income is truly is yours!  That home that you clean….you OWN that! That yard you mow…you OWN that!

What could be cooler than that?!

Step 7 – Give

This is hands down THE best step.  At this point in the program, you are building wealth.  This will allow you to give more generously than you could have imagined.  This is the step for dreamers. I’m pretty certain my husband and I talk about this 3-4 times a week.  We can’t wait to be able to give to others. We dream of when we can bless someone else in a time of need

We want the Lord to use us to help others.  What an amazing thing that will be! Until then, we do what we can within our means.  We are trying very hard to be honoring in our financial choices since starting this plan.

We made a few bad decisions on our debt acquiring journey that we are trying to make right.  Lucky for us, we have about 10 years to think about what we did that got us there in the first place.

Why do I know this plan is for you?

Are you feeling lost?  Are you feeling overwhelmed?  Do you struggle with getting on the same page as your spouse?  We were feeling all of those things too. I believe this plan WILL WORK for you.

It isn’t easy, people will question your choices because they don’t look like “normal” choices and you will face challenges.  However, if you are truly committed to turning things around and getting out of debt, this can be your guide and motivation.

My husband wasn’t on board at first, but after enough persistence from me, he understood the principles and we are now in this together.  That has strengthened my marriage in so many ways. Dave Ramsey has changed how my husband and I look at, communicate about and handle our money.  It has put us on the same page in our marriage and allowed us to set goals that we are both on board to achieve…..AND WE BELIEVE WE CAN!

If you have never heard of Dave Ramsey, please look into who he is and his teachings…they work!  Find The Total Money Makeover and READ IT. Borrow this book, buy it inexpensively on Amazon or buy it brand new….just get your hands on it and be prepared for a change in how you approach your finances.

To start it all, you are going to need a budget.  Get my Basic Budget Set Up Worksheets for FREE to get started today!  Just sign up below to get these forms instantly.

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