How to Be Smart with Money: 9 Best Tips

how to be smart with money

How to Be Smart with Money

An important part of winning at life is learning how to be smart with money because money touches nearly everything that we do in our modern society.

If you learn how to be smart with your money and manage it well, you will be able to accomplish some amazing things in life such as building wealth so that you can have security and do the things you enjoy doing, retiring in comfort, helping those in need, supporting worthy causes, and more.

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9 Must-Know Tips for How to Be Smart with Money

In this article I am going to discuss 9 things you must do related to how to be smart with money.

 

1. Determine your why and set financial goals.

The very first thing I believe you should do when you want to be smart with your money is to figure out your financial why. Why do you want your financial situation to change? Why do you feel you need to pay off debt or start saving more money or investing for retirement? What are your ultimate financial goals and dreams?

Your why is crucial because it will give you the motivation to set crucial financial goals that will change the trajectory of your life. With simple and realistic but amazing and far-reaching financial goals, you will be able to accomplish incredible things with your money that most people never will. That is sad, but it’s true.

Many people go through life half awake, never having the ambition or the discipline or dedication to really accomplish awesome things. But you are not that person! Or if you were, you are not anymore! 🙂

You are going to accomplish incredible things in your life by setting and steadily working toward simple but incredible financial goals like building up savings for emergencies and large expenses, getting out of debt (including paying off that mortgage!), investing for retirement. helping to pay for your children’s college educations so that they will not be saddled with debt, and building wealth so that you can achieve ultimate financial freedom.

 

 

2. Make a spending plan.

Once you have determined your financial why, get after it by creating a plan to accomplish your financial goals—a financial plan, otherwise known as a budget. 🙂 But just call it a spending or smart money plan or whatever you want if you don’t love the b word.

When you create your budget, make it a zero-based budget. In other words, allocate your monthly income down to nothing on paper. You may think that this seems odd; that it would be better to leave a little money as a buffer. And that is great, if you designate that money to be put into a particular savings account or something, like your emergency fund. But don’t just leave the money unaccounted for. The reason? It’s almost certain to get spent.

No budget? No problem! Sign up below to receive a free spending tracker and starter budget forms!

 

Figure out your monthly income.

Ready to start creating your budget? Great!

Your first priority as you create your spending plan is to figure out your total monthly income. If you (and your spouse, if he or she works outside of the home) have a steady, fixed income from an employer, this is really easy. Just look at your pay statements or your bank account where you deposit the money, and record how much you make on your budget.

If your income fluctuates because you work for yourself or work on commission or in sales, then look at your pay statement or bank deposits for the last two or three months, and make your best estimate of your monthly income.

 

Track your spending to determine your expenses.

Next, begin to track your spending or else review debit or credit card transactions and receipts to estimate your monthly spending.

If you buy and pay for most everything with your debit card or credit card, this is really simple. If you don’t, then carry a little notebook with you or jot down your purchases in a note-keeping app on your phone.

Either way, track your expenses for at least a week, but preferably a month so that you get a more complete picture of your spending. If you have not been following a budget or paying much attention to your spending before now, this will likely be very eye opening, and you will likely see some big leaks in your wallet that you will want to plug.

But the good news about that is that once you fill those holes, you will feel like you got a raise! You really will! (Yeah, I might just be speaking from experience. :))

Adjust your budget as needed.

As you are creating your budget and then as you are working to fine tune and follow your budget, be flexible and cut yourself some slack. You are going to find things that you need to adjust, and it will probably take about three months for your budgeting to really start to work. But once it does, the results can be amazing as your money starts to work for you and move you toward your awesome financial goals!

Learn more about how to create a budget (or how to tweak it to make it successful) with this post on the complete beginner’s guide to budgeting.

Tip: I recommend that you start budgeting on paper if you can so that you really have to write down and see where all of the money is going. But after that, you can sign up for an online  budgeting app such as YNAB, Mint, EveryDollar, or Personal Capital if you like to make things easier. But the most important thing is that you do it, so if that means being digital from the beginning, then do it!

 

3. Differentiate needs versus wants to ensure you are being smart with your money.

As you create your budget, begin to differentiate needs versus wants, and make adjustments to your budget as you go along. Sometimes we do a pretty good job of justifying wants by calling them needs. But to truly differentiate needs versus wants, remember this: you need housing (unless you can live under a palm tree or something), but you don’t actually need a fancy or new or even nice home.

Similarly, you need food, but you don’t need restaurant food or gourmet food or to always eat name-brand food. You need transportation, but you may be able to get around with one car for a while (or even possibly no car, if you can use bikes or your feet or public transportation). And you definitely don’t need a brand-new or ultra-safe or super fancy car.

The better you can differentiate needs versus wants and base your budget on your needs first and then the wants that you can truly afford while still saving and investing adequately to meet long-term, crucial financial goals, the better off financially you will be later in life.

As you create your monthly spending plan or budget, allocate money for your needs first. That means designate money first for reasonable food, clothing, shelter, transportation, utilities, and other true necessities.

Then designate money to build up an adequate (three- to six-month; I recommend six months) emergency fund, to create sinking funds to cover future larger expenses and larger purchases (such as app and so on), and to save adequately for retirement (save at least 10 but preferably 15 percent of your income for retirement as soon as you are financially able to).

Learn more about differentiating between needs and wants here.

 

4. See where you can reduce your spending to be smarter with your money.

To be smarter with your money and reach your financial goals, you are probably going to need to reduce your spending. Fortunately, you should be able to cut your spending in the categories below pretty easily by following the tips given for each budget category.

 

Save money on entertainment.

There are many, many ways that you can save money on your monthly or yearly entertainment and related costs. Here are some of the biggest ones:

  • Ditch your dish (satellite) or cable service.
  • Save money on your cell phones or smartphones.
  • Save money on your internet service.
  • Go to the movies less.
  • Buy fewer books and movies (go to the library instead :)).
  • Go to fewer and less expensive music concerts.
  • Go to fewer and less expensive sports games.
  • Spend less on video and computer games.
  • Spend less on electronic devices.
  • Cancel your subscriptions to magazines and paid TV services (Netflix, Sling, and so on—again, videos from the library are free!).
  • Consider canceling your memberships to the gym, rec center, museums, aquariums, zoos, and the like.
  • Spend less money on recreational activities like skiing, bowling, miniature golf, playing arcades, and so on.
  • Spend less on Christmas shopping.
  • Spend less on family vacations.
  • Reduce the amount allocated to your personal monthly spending money (your fun money or blow money).

 

Save money eating out.

The average family in America spends about $3,000 a year eating out. That means there is a lot of money that can be saved here! I know it probably sounds crazy, but we spend less than $300 a year eating out. And I don’t feel deprived! Want to know why? The reason is that that frugality has allowed us to be able to reach other financial goals that we have—and to do it on one average income.

The best thing you can do to save money eating out is to simply do less of it. 🙂 But there are lots of other ways that you can save money eating out, as well! Read this article to learn how to save money eating out.

 

Save money on groceries.

 There are so many—so many!—things that you can do to reduce your grocery spending. I discuss more than 70 ways that you can save money on groceries in this article.

But here are some of the things you can do to save the most money:

 

Check out these related articles:
31 Budget-Friendly Easy and Cheap Dinner Recipes for under $5
42 Cheap and Easy Budget-Friendly Meals for under $5
13 Ways to Save Big When Eating Out!
73 Easy Ways to Save Money on Groceries without Coupons!
59 Must-Know Tips to Slash Your Grocery Bill in Half!
151 Easy Ways to Save Money: Your Ultimate Guide to Saving Money! 

 

Save money on transportation.

 Another way that you really need to be smart with your money is with your spending on transportation. The average car payment in America is close to $500 a month! Is is any wonder that nearly 80 percent of Americans are living paycheck to paycheck? Our savings accounts and emergency funds and retirement funds are sitting in our garages!

So here is what you can do to turn things around and save money on transportation costs:

Find more than 30 tips for how to save money on transportation costs here

 

Save money on housing.

For many families, housing is their single largest expense. But there are also many things that you can do to save money on housing. Here are some of my best tips for saving money on your housing:

  • Shop around to see if you can lower your homeowners insurance premiums.
  • Look into refinancing your home if interest rates have dropped. (But don’t lengthen the term of your loan! If anything, shorten it!)
  • If you are renting, find a cheaper place.
  • If you bought too much house, look at downsizing.
  • If you really want to save money on housing, consider renting out a spare bedroom (or bedrooms) either long term or on sites like Airbnb and Booking.com.
  • Save money on alarm monitoring with inexpensive services like SimpliSafe. (I love SimpliSafe!)

Check out this article for more than 30 ways to save money on housing.

 

Save money on utilities.

You can pretty drastically reduce your utility bill if you want to. Years ago I heard about a professor of economics who just couldn’t bear to see the money spent on utility costs go down the drain because he knew what that money could grow to if it were invested, and so he kept his AC up and his furnace down, and his family wore sweaters and bundled up during the winter and found ways to stay cool during the summer.

We haven’t gotten that extreme in my family (not yet, anyway :)), but it’s a little tempting! Because I hate spending money on things that have no lasting value, too! Sigh. In any case, here are some free and easy ways that you can save money on your utility bill:

  • Turn down (to 62 degrees or lower, if you can) and turn up your AC (to 78 degrees or higher, if you can).
  • Wash all of your clothes in cold water. Washing machines are so powerful these days they will still get your clothes clean even with cold water.
  • Hang your clothes out to dry.
  • Use your dishwasher less. Wait till it is full to run it, and consider using your dish drain and washing the dishes by hand.
  • Turn off lights, TVs, computers, radios, nightlights, and so on when they are not in use.
  • Unplug appliances and electronics when they are not in use.
  • Open your curtains during the day to let in the sun to warm up your house during the winter or keep them closed to keep out the sun to help keep it from heating up too much during the summer.

Also, read this article for more ideas on how to save money on utilities during the summer and this article for more ideas on how to save money on utilities during the winter.

 

Save money on clothing and shoes.

Some people just love to buy designer clothes and shoes. And they look really nice! But so does a paid-for beach house in retirement. 🙂 So we buy most of our clothes, for us and the kids, either on sale or from thrift stores or the classifieds. For now our kiddos are young, so they don’t know the difference (and I hope that even when they are older, they won’t care—and I hope they never do :)).

My sisters and I also swap clothes back and forth for our kiddos that are the same ages, which is awesome! I love to see the clothes that my kiddos wore on my nieces and nephews; it brings back such fun memories! If you have family or friends with kiddos the same age as yours, see if you can set up a kids clothing co-op!

Read this article to learn easy ways to save money on clothes.

 

5. Comparison shop.

Another super smart thing that you can do to be good with your money is to comparison shop—on virtually everything. When I have done this, particularly with larger expenses like fairly major home and auto repairs, the difference in prices I have been quoted has sometimes been surprising! Get the most bang for your buck by calling several (I usually call at least five) places or checking several stores before making a purchase or spending money on a service like a car, plumbing, or home repair.

This year we wanted to do some fairly extensive home improvements. And one of the things we just got done was to replace our gutters (they needed it!). And like I always do, I called around to several contractors who came out and gave bids. We ended up paying just under $1,000, and I think they did a great job. (From what we can tell; but we’re no construction experts!)

But the difference between the highest bid we got and the lowest was over $500! So please, please, always comparison shop, and the more expensive the purchase, the more places you should compare.

Shortly after we moved into our home (which was a foreclosure and hadn’t been lived in for over a year, maybe two) we noticed that our water wasn’t draining from our showers. And someone at our church gave us the name of a local plumbing company. They came out, and they wanted us to spend $4,000 to dig up a big bush and snake our line and do I don’t remember what else. But $4,000!

So I called around to several other places, and we ended up paying around $400 for a smaller company to come out and just augur through our line and clear out the roots that had grown into it and put down some anti-root stuff.

Now, that first company isn’t a “bad” company, at least not according to Google and my neighbor. They have a 4.5 star rating, with over 2,500 reviews. But I will never use them, that’s for sure! Because they tried to way up-sell us and go for the most expensive option instead of the least expensive (or at least a less expensive option).

And don’t even get me started about auto mechanic shops and how important it is that you comparison shop when getting vehicle repairs done! (Find more than 30 ways to save money on vehicle repairs, maintenance, insurance, and other transportation costs in this article.)

So, again, even when you have recommendations from others you trust, comparison shop. Do your own research and due diligence! Call at least three or four companies (but half a dozen or more is what I do). Want to know other ways we save around the house? You can find more than 30 awesome tips for how to save money on housing here (from maintenance to homeowners insurance and more).

 

6. Put money where it needs to go to be smart with your money and build wealth.

To put your family on solid financial footing and to ultimately build wealth, make sure to do the following things.

 

Build an emergency fund.

As I mention briefly above, it’s important for your family’s well-being that you have a substantial emergency fund. I recommend at least three but preferably six months’ worth of expenses saved in your emergency fund.

If you haven’t already, make your emergency fund its own separate savings account. You may even want to open an account at a different bank so that the money is not too easy to access, if you think you might be tempted to use it for other things besides true emergencies.

Learn more about emergency funds here.

 

Check out these other related articles:

 

Get out of nonmortgage debt.

Once you have at least a starter emergency fund of at least $1,000, another very smart thing to do with your money is to pay off all nonmortgage debt as quickly as possible.

To get out of debt, first figure out how much you owe on your various debts such as credit cards, student loans, car loans, department store loans, and so on.

Then, decide which method you would like to use to get out of debt. Depending on your disposition and what motivates you, I recommend you use either the snowball debt payoff method or the avalanche debt payoff method. Briefly, with the debt snowball method, you pay off your smallest debts first to gain momentum and keep up motivation. With the debt avalanche method, you pay off the debts with the highest interest rates first, and knocking out those higher interest rates could be what keeps you most motivated.

Personally, I recommend the debt snowball method because I think it is a better way to gain momentum, and that is the debt payoff method that we personally used.

Once you are out of nonmortgage debt and are adequately saving for larger expenses and purchases (more on that below) so that you can stop taking on new debt, work to pay off your mortgage early! Being mortgage debt free is amazing, and it is one step closer to ultimate financial freedom!

 

Save for larger purchases and expenses.

After you have paid off your nonmortgage debt, start saving toward large purchases and expenses so that you can pay for them with cash and avoid going back into debt. Debt freedom = financial freedom = peace and joy 🙂

To save for these large expenses, I recommend that you set up several separate savings accounts (also known as sinking funds). We personally have more than 20 different savings accounts for our various financial goals. You certainly do not have to be that detailed, but I would recommend that every family set up these nine savings accounts:

  • Emergency fund
  • Vehicle maintenance and repairs
  • Vehicle purchase
  • Home down payment
  • Home repairs
  • Furnishings and appliances
  • Christmas and gift giving
  • Vacations
  • Miscellaneous/other short-term savings

By having these nine savings accounts and consistently working on funding them, you will have the cash you need to take care of all of the expenses that that occur.

 

Start investing for retirement.

Once your nonmortgage debt is paid off and you are saving toward the necessary expenses above, start investing for retirement. I recommend that once you are out of nonmortgage debt you start to save 15 percent of your income for retirement as soon as you can, but at least save 10 percent.

Remember the incredible power of compound interest and start saving as much for retirement as you can as soon as you possibly can.

 

Check out these related articles:

 

Start saving for kids’ college (if applicable).

If you have children, also start saving for their college educations as soon as possible to take advantage of the power of compound interest and to help ensure that they are not burdened with student loans later in life.

 

7. Consider doing overtime, getting a second job, starting a side hustle, and finding other ways to earn more money.

I believe that there are more ways to make money today than there have ever been before. And many of these you can do from the comfort of your own home after you get back from work! Some of my favorite ways to make more money are those listed below.

 

Do overtime.

Working overtime is one of the simplest ways to make extra money. If your employer offers overtime, then consider taking advantage of it. Especially if you are in a situation where you are working to pay off debt, save up your emergency fund, or save for a large and necessary purchase, working overtime is an excellent option to help you reach those goals more quickly.

Ask for a raise or promotion.

One of the benefits of asking for a raise or promotion is that you receive additional income for (potentially) doing the same amount of work!

If it’s been a few years since you received a significant raise and especially if you’ve been an exceptional employee at work, make a list of your contributions and your accomplishments, and schedule a meeting with your supervisor to request a raise or a promotion. Focus on ways that you’ve earned the company money or saved them money.

If you learn during the meeting that a raise or promotion isn’t going to happen right away, ask what specific steps you can take in the next year or two to make it a reality. Read this article for more information on how to seek a raise or promotion.

Do freelance work.

If you work in a field that lends itself to doing freelance work, consider taking advantage of that opportunity to earn extra income. I have been doing freelance writing, editing, and proofreading since before I graduated from college with my English degree and editing minor, and doing freelance work has not only helped me gain experience in other areas besides what I do for my full-time job but has also at times (when I wanted to give the time to it) brought in significant additional income.

If you similarly enjoy and have a knack for writing, look into freelance writing jobs. You can find ideas for close to 30 freelance writing jobs here.

Freelance proofreading is another great option if you love to read and have a good eye for detail. If freelance proofreading might be a good opportunity for you, then check out this awesome general proofreading course by my friend Caitlyn at Proofread Anywhere!

Look at indeed.com, monster.com, or your favorite job search site for opportunities.

Do consulting or coaching.

Similarly, if you have job experience or a skill that lends itself to it, consider putting that skill to use to do consulting or coaching work. Popular areas for consulting include human resource (HR) consultant, public relations (PR) consultant, marketing consultant, business management consultant, and accounting consultant.

Popular areas for coaching include financial coaching, job coaching, personal fitness coaching, and leadership coaching.

Look for consulting and coaching opportunities on indeed.com or your favorite job website.

Start a side hustle.

If you would rather earn money without working another regular job, there are a lot of things you can do to earn a little extra income with a side hustle. Some ideas include starting your own small business where you turn a hobby into a money-maker, being a virtual assistant, or driving for Uber or Lyft. Learn how to start a side hustle and find out about many side hustles that you can explore.

Start a money-making blog.

The potential for significant income is one of the reasons that I started this blog. If you love helping people and enjoy writing, being a blogger might be a great fit for you. In addition to great income potential (check out these amazing income reports of bloggers who make $10,000 to $100,000 or more per month!), there are many other benefits of being a blogger, such as being able to be your own boss and work on your own schedule. Learn how to start a blog for less than $5 a month.

Make money with affiliate marketing.

Affiliate marketing is where you recommend a product or service to others, and in return for your sending business their way, a company pays you a percentage of the sale that they made because of your recommendation. Affiliate marketing can be an excellent way to make extra income; those who do it well can make thousands of dollars a month (or much more).

For an excellent course on affiliate marketing, check out Making Sense of Affiliate Marketing by Michelle Schroeder, who makes more than $50,000 a month with affiliate marketing! When I decided to start blogging, Michelle’s course is the first one that I bought.

Interested in finding out more about this truly amazing money-making opportunity? Learn more about affiliate marketing here.

 

Get a (second) job.

If you are in a situation where money is tight or where you have a lot of debt or where you simply want a bigger hammer to pound out your financial goals, then look into the possibility of one of you getting a job or a second job.

If one spouse is not working outside of the home, for example, then consider whether it would be worthwhile for that spouse to start earning an income (perhaps with a job that could be done exclusively from home).

Similarly, if one of you works only part-time, you might want to consider  going full-time at least temporarily in order to reach your financial goals more quickly.

Or consider if one spouse is available to get a second job in the evenings or on Saturday, for example, and earn more money that way.

Earn passive income.

Some options for earning passive income are to create a product you can sell, write a book, create a money-making podcast or vlog, or develop an online course. Read this article to learn more ideas for earning passive income.

Use rebate apps like Ibotta and Ebates.

With rebate services such as Ebates and Ibotta, you can earn money by shopping for things and at places where you would shop anyway. With Ebates, you generally buy items through their website to save up to 40 percent on purchases. It is primarily an online service. Ibotta, on the other hand, is an app you use primarily after you make purchases at brick-and-mortar stores. Because of this, you can actually sign up for and use both apps to save on purchases.

Sign up for a free Ebates account here, and sign up for a free Ibotta account here. You can literally sign up for both in just seconds and let the savings start stacking up.

Sell stuff on eBay, Amazon, or your local classifieds.

If you have a good eye for a bargain, you can buy items at thrift stores or garage sales and sell them for a profit on eBay, Amazon, Craigslist, or your local online classifieds.

Sell your clothes to consignment shops.

If you’re like most people, you probably have more clothes than you need. So use them to bring in some extra cash!

Have a garage sale (or regular garage sales).

Declutter your home and earn money, all at the same time!

 

Check out this article to learn more about and find more ideas for increasing your income!

 

Would you like to start making more money? Sign up below to participate in the free 10-day Earn More Money, Change Your Life challenge and learn actionable steps you can start taking today to really increase your income!

8. Automate your finances.

Another smart thing that you can do with your money that will really help you to be successful with your finances is to automate your finances as much as you can. By automating your finances, you’re not left so susceptible to temptation. And you are able to effortlessly work toward reaching your financial goals and can do so without having to make the conscious decision to save or invest or pay off debt every time you get paid.

Right after you get paid, transfer money directly to pay extra toward debt, into your emergency fund and other savings accounts, and into your  401(k) or Roth IRA. Take care of your financial goals effortlessly by funding them automatically! And then live on what is left.

You should automate your finances in order to get paid (through direct deposit); save for emergencies, large purchases and expenses, and so forth; pay off your debt (as long as you are not in an adversarial relationship with anyone you owe money to); pay bills; invest for retirement; save for kids’ college; and more.

Read this article to learn more about automating your finances.

 

9. Stay out of debt to be smart with your money.

The best way to be able to build wealth, and one of the best ways to be smart with your money, is to first get out of debt and then stay out of debt. That is because when you get out of debt—as one of my favorite personal finance gurus, Dave Ramsey, says—you free up your biggest wealth-building tool: your income.

By paying off all of your debt—including eventually paying off your mortgage—and then staying out of debt you will have all of your income to use to meet your needs and build your wealth, instead of the bank’s. And ultimately, you will be able to achieve financial freedom.

 Learn how to get and stay out of debt.

Conclusion

As you follow these steps for how to be smart with your money, you will be able to move yourself and your family steadily toward financial freedom. First you will be able to achieve freedom from overspending, then freedom from living paycheck to paycheck, then freedom from the stress of having no financial cushion (savings), then freedom from being in debt, and then ultimate financial freedom—from having to work.

With ultimate financial freedom, you will get to the point where you can choose when and how you want to work, or if you want to work. Your time will be your own to accomplish the amazing things that you want and maybe even were meant to do in your life.

So be smart with your money and go after your amazing financial goals!

 

What do you think are the most important steps related to how to be smart with your money? Did one of the steps above inspire you to try something new? Where are you on the journey to financial freedom? Let me know your thoughts in the comments below! I would love to hear your best ideas for how to be smart with your money!

Invitation to Share

Was there something in this article that inspired you to change something about your money? Are there ideas or tips that you feel could help others? Would you please take a minute to share this article via email or social media? I would love your help to share these principles of financial well-being. Thank you!

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What Is Financial Freedom?

what is financial freedom

 

What Is Financial Freedom?

Financial freedom can be defined in many ways, but I believe that financial freedom is being able to do what you want to do when you want to do it without having to worry about how to pay for it.

I think that is the ultimate definition of financial freedom, but there are other important elements of financial freedom, as well. Below I will give several more practical answers to the question, what is financial freedom?

 

Tip: Pin the image above so that you can easily refer to this article about what is financial freedom later!

 

7 Simple Ways to Answer the Question “What Is Financial Freedom?”

In addition to the answer above, there are several other helpful answers to the question of what is financial freedom. Here are my top 7.

 

1. Financial freedom is freedom from credit card debt.

The first answer for what is financial freedom is that it is freedom from credit card debt.

If you have ever felt trapped by credit card debt or other obscenely high interest rate debt, then you know why I list this definition next. If you do not pay off your credit card balance every month, then you yourself are ensnared to an extent by this merciless captor.

If you have gotten into a financial bind where you feel dependent on credit cards, know that there is a way to get out and there is a better way to live! Find out how to stop relying on credit cards. Also learn how to save up to pay for large purchases with cash to end the debt cycle forever! Free yourself from bondage!

 

2. Financial freedom means having an emergency fund.

An adequate emergency fund is a crucial part of financial freedom because you need an emergency stash to be able to pay for life’s unexpected (but inevitable) financial troubles.

Most families will have a major financial setback of $10,000 or more in a 10-year period, and if you don’t have the cash and you continue to rack up debt, then that emergency becomes debt that adds up to tie up all of your money.

Having an adequate emergency fund of at least three months (but I think six months is even better and recommend that amount) is crucial to your family’s financial well-being and their financial peace.

Learn how to create a starter emergency fund of at least $1,000, and learn how to build a full emergency fund as quickly as possible.

 

3. Financial freedom is freedom from all nonmortgage debt.

Another facet of being financially free is to be out of all debt except for the mortgage. In our credit-loving society, this is an amazing feat in and of itself; it really is!

If you have had tens of thousands of dollars of debt, rest assured that your situtaion is not unique. Many people have been in the same circumstances, including yours truly. The $60,000 of debt that we had before we bought our first home was one of the main impetuses that set me on a quest to learn all I could about personal finance.

You can get unburied from all that debt, just like we did. It probably will not be easy, but it will be simple—and I promise that it will be worth it! Being consuming debt free feels amazing once you get there!

Learn how you can get out of debt (and stay out of debt)! Yes, you can even avoid car loans by saving up to pay for your vehicles with cash. Learn how to never have a car payment again!

 

Check out these related articles:

Learn How to Get (and Stay!) Out of Debt!

How to Stop Relying on Credit Cards

How to Use Sinking Funds to Build Your Savings and Avoid Debt

4. Financial freedom means not living paycheck to paycheck.

Just like having lots of credit card and other consumer debt, living paycheck to paycheck is a scary way to live. Being broke all the time is no fun!

One very important and powerful level of financial freedom (and financial peace) is not having to constantly worry about how you will pay your bills or put food on the table.

If you are always running out of money and constantly living paycheck to paycheck, look at ways to reduce your spending. You may also need to honestly differentiate between needs and wants. And also consider ways that you can increase your income!

There is only so much you can do to spend less money (but there is a lot that you can do!), but your potential for increasing your income is virtually limitless. One way to make more money that can be a lot of fun is to start a side hustle. Find 19 awesome side hustles that you can do from home. And learn 11 simple steps to start a successful side hustle.

If you are tired of living paycheck to paycheck, read this article with simple steps to stop living paycheck to paycheck for good!

 

5. Financial freedom means paying off the mortgage and becoming completely debt free!

The day that we paid off our mortgage was honestly one of the best days of my life! After going through a time when I was seriously afraid (as in, often had knots in my stomach and sometimes found it difficult to sleep at night) that we would never be able to get out of all of the debt that we had, becoming completely debt free was something I looked forward to like a freshman looks forward to graduation. 🙂 (Actually, maybe even more than that!)

We had been working very diligently toward that goal ever since we learned about Dave Ramsey and this whole crazy part of society that seeks for and then lives debt free (what an amazing concept!), and when it finally happened and we became debt free ourselves, it was amazing! It was life changing! And we plan to never go back! #debtfreeforlife #100percentdownplan

By following the financial principles that I teach on this website, we were able to pay off our home (on one income!) in less than 6 years! Learn 7 simple steps to take to pay off your mortgage early!

 

6. Financial freedom means being able to retire and work only if you want to!

According to one oft-quoted study, close to 70 percent of employees are either unengaged or actively disengaged at work. That is really sad to me. I am fortunate enough to have a full-time job (as an editor) that I love (most of the time :)).

And yet I still look forward to the day that we have enough money that I can choose to stop working and can spend more time with my children or volunteer more in the community or pursue other interests or a different line of work that may not pay well.

In order to retire with comfort and dignity, you have to save a significant amount of money. And because of the amazing power of compound interest, the sooner you start to invest for retirement, the better.

Are you ready to get serious about investing for retirement so that you can have an awesome financial future? Join the 5-day Invest Your Money, Change Your Life challenge to learn how to invest, the kinds of investments that I recommend, the amount that I recommend you invest, how we choose the mutual funds we invest in, and more! Sign up now! 

 

7. Financial freedom means being able to afford whatever you want to whenever you want to. 

Now we are back to my first, and I believe the ultimate, way to answer the question of what is financial freedom.

Very few people will ever have the money to do 100% of whatever they want whenever they want, but by investing a good amount (at least 10 percent but preferably 15 percent of your income) early and continually, you will by the time you retire be able to do most of what you want when you want.

 

Conclusion

What is financial freedom to you? To me, financial freedom is financial peace. And financial freedom is being able to work doing something that I love only when I want to (or not at all, if I don’t want to).

Since we live on my one good but average income, with my husband as our stay at home parent, that level of financial freedom may take several (or many) more years, but I do believe we will get there as we follow the financial principles that I teach on this blog.

And if you follow them, I wholeheartedly believe that you will get there, as well! Best wishes to you as you pursue your own financial freedom!

 

How would you answer the question,what is financial freedom? And where are you on the path to financial freedom? I would love to hear your thoughts and cheer you on! Leave a comment below and let me know!

Invitation to Share

Was there something in this article that inspired you to change something about your money? Are there ideas or tips that you feel could help a family member or friend or people in general? Would you please take a minute to share this article via email or social media? I would love your help to share these principles of financial well-being with others. Thank you!

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Join our closed Families for Financial Freedom Facebook group to get support and share ideas for how we can all improve our financial well-being by earning more, spending less, saving more, and investing more and reach our financial goals. You can do this! And we are here to help.

Financial Independence Challenge: 31 Simple, Daily Actions to Take toward Financial Freedom!

how to achieve financial freedom

The July 31 Day Financial Independence Challenge!

In this article I am going to share tips and steps for how to achieve financial freedom. Learn 31 simple ways that you can work toward your financial independence this Fourth of July!

What is your financial freedom worth? To me, it is worth a lot! I hate the fear that comes with being a slave to debt (and I have been there!). I want control of my money; I don’t want to have to give all my money to the bank and the credit card company and the car loan company. I (eventually) want the financial freedom to work when and where and how much I want (or not at all, if I want)!

I want the freedom to spend my days volunteering in my community or spending time with my family or serving in my church or pursuing other worthwhile goals. I want the freedom to travel and to see the world. What do you want the financial freedom to do? 

With the 31 Day Financial Independence Challenge, you can take measurable steps toward building up an emergency fund, catching up on bills, pay offing debt, starting to budget effectively, or reaching other financial goals! With these 31 genius money tips you will be able to take small steps each day to work toward achieving your financial freedom!

Join the July 31 Day Financial Independence Challenge today! Read on to learn the challenges for each day.

 

Tip: Save the image above to Pinterest so that you can easily refer to this article on the 31 Day Financial Challenge later! (And share it with others!)

 

 

31 Simple Steps for How to Achieve Financial Freedom 

With the July 31 Day Financial Independence Challenge, you can take a solid step each day to move you toward your own financial freedom! Sign up to receive the free Financial Independence Challenge calendar! Start your path to financial freedom today!

 

Day 1. Discover your financial why.

Understanding your financial why is crucial to achieving financial freedom.

I’m starting with this point because in some ways it is the most important. Without a huge why, there’s a good chance you’ll quit before you reach your financial goals.

There’s a reason that most people (yes, unfortunately, most people—most adults in the U.S., at least) are overweight and in debt. And it’s because eating ice cream is easier than working out, and spending money is easier than having the discipline to save it and learning how to properly invest it. But a strong why can change all of that.

Take the time today to figure out your why. Why is it worth it to spend less than you earn?Why is it worth it to save money? Why is it worth it to invest? Why is it worth it to have an emergency fund and to get out of debt?  Why is it worth it to save for retirement? Why is it worth it to save to help pay for your kids’ college?

Discover your financial values and your financial priorities, and then set goals and plans that align with your why and your financial values.

Day 1 Challenge: For this first day of your financial independence challenge, identify one financial why that will propel you toward your goals.

 

Day 2. Recognize the power of being content.

One of the main secrets to building wealth and being financially successful is to be content with what you already have. Of course there are other important factors, but if you can’t be content with what you have and if you always feel a driving need for more gadgets, more toys, more stuff—better stuff—then you’re going to struggle at winning financially.

And simple math is the culprit. As much as virtually all of us would like to have all the money in the world to both buy the things we want and do the things we really should do for our financial stability and success, the truth is that most of us simply don’t have the money for both.

While we may live in one of the wealthiest—and the wealthiest, in many respects—eras of the world, we also have no limit to the sheer number of things we can spend our money on. It can be mind blowing and soul numbing at times.

Advertisers do all they can to make us give up all of our hard-earned money—and then some—by spending more than we make and going into debt. But if you want to be wealthy, if you want to be financially independent when you’re older, then contentment is one of the most important factors, and in some respects may be the most important factor for attaining success.

That is because no matter how much money you earn, if you don’t save and invest a substantial amount of it, you’re likely to always be broke. You will always be living paycheck to paycheck, never getting ahead in this financial game we all get to play. To learn about (honestly) differentiating needs versus wants, read this article.

The Apostle Paul taught, “I am not saying this because I am in need, for I have learned to be content whatever the circumstances” (Philippians 4:11). That is one of my favorite scriptures because of the simple and beautiful principle it teaches: “I have learned to be content whatever the circumstances.”

Now, that doesn’t mean that you shouldn’t be ambitious at all or that you don’t need to continually strive to make your situation better. It just means that while you work to make your situation even better, be happy with what you have.

And especially when it comes to money and the stuff that it buys, be careful that you don’t get into the downward spiral of never quite being happy or fulfilled because things could always be a little better, your home a little bigger, your car a little nicer, your clothes a little trendier, and so on.

Day 2 Challenge: For your day 2 financial independence challenge, commit to being content with what you already have, no matter your financial situation.

 

Day 3. Create (or reevaluate) your spending plan.

I truly believe that if you fail to plan, you plan to fail. Most Americans (60 percent) don’t budget. And most Americans (more than 60 percent) also live paycheck to paycheck. Is there a correlation? I think so.

A budget, or spending plan, is basically a list of monthly goals for your money. It is where you decide what you want to spend for each area of your finances. If you are living paycheck to paycheck, you might want to estimate a little high for the different budget categories right at the beginning, just to give yourself a little wiggle room. (I’ll share the best ways to find more money in your budget below). As you create your first budget and then work to tweak it, don’t shoot for perfection and don’t be too hard on yourself.

It will take a few months for you to get most of the kinks worked out and for you to start really budgeting effectively. But when you do, chances are that you will feel like you got a raise, even before you start adjusting your budget in order to spend less and save more. Find tips and steps for creating your first budget here. You can also learn how to stick to a budget here.

Want help getting started with budgeting? Sign up to receive my free spending tracker and starter budget forms below!

 

Day 3 Challenge: For your day 3 financial challenge, take your first steps to creating a monthly spending plan. Or review your current budget to see what adjustments you could make to better reach your financial goals.

 

Day 4. Commit to creating a starter emergency fund, and take a small step toward that goal.

Another crucial point related to how to achieve financial freedom is to have a financial buffer between you and Mr. Murphy. To do so, you need to begin to build a small emergency fund.

If you do not already have an emergency fund, I recommend building up a starter emergency fund of at least $1,000 as quickly as possible by taking on extra work, selling stuff around the house, reducing your spending on things like food and entertainment, or (ideally) all of the above.

At first you may feel like you can put only $50 or $100 a month toward your emergency fund, but increase this as quickly as you can. Try to have $1,000 (or $500 if you make a household income of less than $20,000 a year) saved within a couple of months. If you feel more comfortable with a little more of a safety net, then you can increase that to up to one month’s worth of expenses.

And then work to save a fully funded emergency fund once you are out of consumer debt. Learn here how to build a three- to six-month emergency fund.

Day 4 Challenge:  Figure out how much you can realistically allocate in your budget to begin to save a starter emergency fund of at least $1,000. Set up automatic transfers (even if you set them to start next month or in a couple of months) to begin funding your starter emergency fund.

 

Day 5. Make a commitment to get out of debt.

One of my favorite financial gurus often says that it is impossible to dig yourself out of a hole when you keep filling it. And it is impossible to build wealth when you continually give all of your money to the auto loan company, the furniture store, the credit card company, and the mortgage company.

That is why a crucial part of achieving financial freedom is to get (and stay!) out of debt. To get out of debt as quickly as possible, I recommend using either the debt avalanche method or the debt snowball method.

You will save some money on interest if you use the avalanche method, but for most people, I would recommend the snowball method, or else a combination of the two, where you begin with the snowball method and then switch to the avalanche method once your commitment level to getting out of debt is rock solid.

The snowball method is the one we used, and I feel that it works best in most cases because it keeps your motivation high because you have more frequent debt payoff wins. Read this article to learn more about how to get (and stay) out of debt.

Day 5 Challenge: For your day 5 challenge, dig into your finances (even if it might be scary; you can do it!) to figure out exactly how much debt you have. Then decide whether you would prefer the debt snowball method or the debt avalanche method, and decide which debt you will pay off first. Set a goal to get it paid off within a specific amount of time. (Then work on paying off your other debts, as well.)

 

Day 6: Review your recent spending, and see where you can make cuts.

Review all of your recent purchases and expenses to see where you can reduce your spending.

By examining your debit card or credit card transactions online and your recent receipts (especially when you used cash), you will likely see areas that you can quickly cut. Many of those might be in the areas I will discuss below.

(Note: If you don’t currently keep your receipts, consider doing so! Just stuff them in a large manila envelope or binder, at least, so you will have them to review later as needed.)

Day 6 Challenge: For your day 6 challenge, review your bank statements or transactions online and your receipts, and list places where you can spend less money.

 

Day 7. Consider how you could cut entertainment expenses.

Now, specifically take a look at your entertainment spending.

When I talk about ways that people can spend less money, the first place that I suggest that they look is at their entertainment spending. Consider whether you could save money in any of the following areas:

  • Your cable or satellite bill.
  • Your internet bill.
  • Your cell phone bill.
  • Going to the movies.
  • Going to music concerts.
  • Going to sports events.
  • Video gaming.
  • Purchasing electronic devices.
  • Paying subscriptions to magazines and paid TV services (Netflix, Sling, and so on—again, videos from the library are free!).
  • Paying for memberships to the gym, rec center, museums, aquariums, or zoos, and the like.
  • Participating in recreational activities like skiing, bowling, miniature golf, playing arcades, and so on.
  • Christmas shopping.
  • Going on vacations.
  • Your personal monthly spending money (some people call it fun money or blow money).

Find even more ideas for how to save money on entertainment.

And don’t worry! Just because you are looking to save money in order to reach your financial freedom doesn’t mean that you can’t have a great time! Check out this article with 90+ fun, free activities you can do without spending any money!

Day 7 Challenge: For your day 7 financial independence challenge, look at your entertainment spending, and see if you can make spending cuts in at least 3 areas.

 

Check out these related articles:

12 Best Tips to Save Money on Entertainment
91 Fun, Free Activities to Do during a No-Spend Challenge!
151 Easy Ways to Save Money: Your Ultimate Guide to Saving Money!
5 Super Simple Steps to Save $1,000 for a Debt-Free Christmas
11 Ways to Save Big on Your Christmas Shopping
4 Powerful Principles of Gratitude to Change Your Financial Life
Contentment: 9 Powerful Principles That Will Help You Save More Money and Reach Financial Success

 

Day 8. Find ways to save money on eating out.

Another one of the easiest ways to save money is to spend less money eating out. The best way to save money on eating out is to eat out less!

To start saving money eating out, take small steps from where you currently are. So, for example, if you eat out most days (or even every day) for lunch at work, start bringing a lunch from home. Keep things simple, especially at first. Bring leftovers you can easily reheat in the break room microwave. Bring a sandwich or simple salad.

Similarly, if you eat out every week as a family, cut back to eating out once a month or every other week. And go to less expensive restaurants when you do eat out.

You can also save money eating out by finding deals online, eating appetizers or smaller meals, save half of your meals for lunch the next day, share an entrée with another person, order water instead of a drink, skip dessert, and more!

There are lots of other ways that you can save money eating out, as well. Find more ideas to save  money when eating out here.

Day 8 Challenge: For your day 8 financial independence challenge, make a goal to spend less money eating out. This might mean brown bagging your lunches at work most days, going out to eat less as a family, going to less expensive restaurants, or all of the above.

 

Day 9. Make a simple meal plan.

One of the best ways that you can save money on food in addition to reducing how much you spend eating out is to make a weekly or even monthly meal plan. Find out how to plan a month’s worth of meals in less than an hour!

As with many things in life, one of the most powerful things you can do to save money on groceries is to start with a solid plan.

Get this awesome free weekly meal planning worksheet (sign up just below) to get organized and plan your week’s or month’s worth of meals! The meal planner comes with awesome meal planning tips that will help you save a ton of money (and time!) on your grocery shopping!

 

 

Day 9 Challenge: For this challenge, create a simple meal plan (the free meal planner above makes this a snap!) for at least a week to help you save time and money!

 

Day 10. Find other ways to slash your grocery budget.

As I mention above, you can save a ton of money by reducing your grocery budget. I talk quite a bit on my blog about finding ways to save money on groceries, and the reason is that there are so many ways to do it, and food is such a big part of most families’ budgets. Read this article to learn more than 70  ideas to save money on groceries (without having to use coupons!)

Some of the biggest ways that you can save money are by doing the following things.

Shop with a grocery list.

Another way that you can save money on groceries is to shop with a grocery list. This tip goes right along with making a plan.  In fact, my free weekly meal planner (that you can get by signing up with the form just above) includes a shopping list as part of it.

Once you have created your meal plan, use it to create your shopping list for the week (or two weeks) by seeing what grocery items you need (what you are out of or low on) and adding those items to your shopping list.

Be sure to look in your fridge, freezer, cupboards, and pantry and to consult this week’s grocery store ads while you create your grocery shopping list!

Use a price comparison cheat sheet!  

One of the things that saves us a lot of money on groceries throughout the year is to comparison shop. I comparison shop on virtually everything, so of course I am going to comparison shop on one of our biggest yearly expenses! And you should, too!

Use this awesome, super handy grocery price comparison cheat sheet to help you spot great deals and pass over grocery items that are overpriced.

Eat the food you already have on hand.

Another thing that can help you save money fast is to eat the food you already have in your house in order to slash your grocery spending. Most of us have enough food in our houses that we could go for a significant amount of time, if we had to, without buying any food.

So clear out your fridge, cupboards, freezer, and pantry. There’s a good chance you have a week’s worth or more of food in your home (many people have more than a month’s worth of food on hand in their house, which is a great thing in case some kind of emergency happens and you need it!), and using that food up periodically is a good idea to make sure nothing goes bad.

But, also, if you do find food items that have expired, don’t automatically toss them out. The expiration or best by/use by dates are just guidelines, and you can eat most things months past the best by date without any noticeable loss of quality.

 

Cut down on sweets, snacks, juice, beer, and so on.

You can save a ton of money by just sticking to the main food groups. Eat fewer packaged and overly processed foods. Focus on your whole wheat grains, vegetables, fruits, and inexpensive lean meats and proteins. (And both your wallet and your waistline will thank you!) To help you save money fast, leave the rest of the junk (food) on the grocery store shelf.

Plan to have a few meatless meals each week.

Meat is one of the most expensive foods you can buy, so by eating more meatless meals you can save a lot of money. Consider going meatless for a few dinner meals a week, or even plan a whole week or two week’s worth of meatless meals if you want to save money even faster.

Buy only items that are in season.

To save money on produce, buy fruits and vegetables that are in season.

Buy grocery items that are on sale.

Check the week’s grocery ads, and then plan what you buy for that week’s meals around that.

Eat unconventional and smaller meals.

If you really want to save money on groceries, then plan really simple meals like egg omelets, fried eggs with toast, grilled cheese sandwiches, peanut butter and jelly sandwiches, fried eggs with rice, cereal with milk, pancakes or waffles, chicken with rice, spaghetti, macaroni and cheese, ramen noodles with vegetables, pasta alfredo, tacos, bean and cheese burritos, and so on.

Want more ideas for how to save money on your grocery shopping? Read this article for more than 70 suggestions for how to slash your grocery bill without needing to use coupons!

Day 10 Challenge: For your day 10 financial challenge, list at least 5 ways that you can immediately cut your spending the next time you go grocery shopping.

 

 

Day 11. Brainstorm ways that you could spend less money on transportation.

Another solid step toward your financial independence is to spend less money on transportation-related expenses.

 Here are some easy ways that you can save money on your transportation costs:

  • Drive the speed limit. 😊
  • Drive less by carpooling, biking or walking, taking public transportation, telecommuting, combining errands, and more.
  • Use apps like GasBuddy to save money when purchasing fuel.
  • Shop around to make sure you are getting the best deal on auto insurance.
  • Wash your car yourself rather than spending money at the car wash.
  • See if you can get rid of your car payment(s). (Could you get by with one car? We were a one-car family for years. Or could you buy a less expensive car and sell your more expensive car with payments?)
  • Find ways to save money on car maintenance and repairs by looking for a reliable and trustworthy but less expensive mechanic. Also save money on auto parts by shopping at places like online parts store RockAuto. (They truly have amazing prices!)

And save in other ways on your transportation costs with more than 30 ideas for how to save on transportation costs.

Day 11 Challenge: For your day 11 financial independence challenge, figure out at least one way that you will save money on your transportation costs.

 

Day 12. Save money on housing-related expenses.

For most families, housing is their largest expense. Fortunately, there are a lot of things that you can do to save money on housing, even if you own your home and so your mortgage is fixed.

To save money on housing expenses, look at these ideas:

  • Consider refinancing your home if interest rates have dropped significantly. (But don’t lengthen the term of your loan! Keep it the same or, even better, shorten it! :))
  • Talk to your insurance agent and find ways to lower your homeowners or renters insurance.
  • Save money on alarm monitoring. Check out SimpliSafe; you can get inexpensive (but awesome) alarm monitoring through them for just $15 a month!
  • Rent a cheaper place.
  • Consider moving in with family or friends.
  • Get a roommate (or roommates).
  • Rent out your spare bedrooms on sites like Airbnb and Booking.com. If you are able to do this, you could earn well over the cost of your monthly mortgage or rent payment. And you can meet some amazing people in the process.

For even more ideas for saving money on housing costs, read this article with 30+ simple ways to save money on housing and related expenses.

Day 12 Challenge: For your day 12 financial freedom challenge, write down at least one way that you will save money on housing-related expenses.

 

 

Day 13. Find ways to save money on your utilities.

You can also save money by cutting your utilities costs.

 To reduce your utility bill so that you can save money fast, try these free and easy tips:

  • Turn down (to 62 degrees or lower, if you can) and turn up your AC (to 78 degrees or higher, if you can).
  • Wash all of your clothes in cold water. Washing machines are so powerful these days they will still get your clothes clean even with cold water.
  • Hang your clothes out to dry.
  • Use your dishwasher less. Wait till it is full to run it, and consider using your dish drain and washing the dishes by hand.
  • Turn off lights, TVs, computers, radios, nightlights, and so on when they are not in use.
  • Unplug appliances and electronics when they are not in use.
  • Open your curtains during the day to let in the sun to warm up your house during the winter or keep them closed to keep out the sun to help keep it from heating up too much during the summer.

Read this article for more ideas on how to save money on utilities during the summer and this article for ideas on how to save money on utilities during the winter.

Day 13 Challenge: For this challenge, find at least 3 ways that you can reduce your energy bill this month. 

Day 14. Find ways to save money on clothing, shoes, and accessories.

Another thing you can do to save money is to not spend so much on clothing and shoes.

My favorite tip for saving money on clothing if you have kiddos is to set up a clothing co-op of sorts. If you have children, see if you can swap children’s clothes with your nieces and nephews or with children from your neighborhood or church.

My sisters and I share clothes for our kiddos, and it is an awesome way to save money (and help out the environment just a little)! Plus, I just love seeing my nieces and nephews in clothes that my kiddos wore! It brings back such fun memories!

You can also save a bunch of money on clothes by shopping the sales (such as the after-season sales) and by shopping at discount clothing stores, thrift stores and second-hand stores, garage and yard sales, websites like eBay and Craigslist, and more!

Want even more ideas? Check out this article with 13 must-know ideas to help you save money on your clothes buying.

 Day 14 Challenge: For your day 14 challenge, write down at least one way that you will commit to spending less money on clothes, shoes, or accessories.

 

Check out these related articles:

How to Get (and Stay) out of Debt!
17 Must-Know Tips to Rock Your Budget
13 Top Tips to Help You Stick to Your Budget
16 Best Tips to Help You Stop Living Paycheck to Paycheck
15 Top Tips to Help You Finally Stop Overspending
31 Budget-Friendly Easy and Cheap Dinner Recipes for under $5
42 Cheap and Easy Budget-Friendly Meals for under $5
73 Easy Ways to Save Money on Groceries without Coupons!
151 Easy Ways to Save Money: Your Ultimate Guide to Saving Money!

 

Day 15. Find ways to make more money.

Though this article focuses on ways to spend less money in order to achieve financial freedom, finding ways to make extra money can be even more effective to help you reach your financial goals.

The reason is simple: there is only so much that you can realistically do to save money (though there is a lot, for sure!), but your potential to earn more money is virtually limitless!

There are more ways to make money today than there have ever been before, and many of these you can do from the comfort of your own home after you get back from work. Some of my favorite ways to make more money are below.

  • Work overtime. If you have the opportunity to do so, working overtime is a great way to help you to save money quickly.
  • Ask for a raise or promotion. If it’s been a few years since you received a significant raise and you’ve been an exceptional employee at work, make a list of your contributions and your accomplishments, and schedule a meeting with your boss to request a raise or a promotion. Focus on ways that you’ve earned the company money or saved them money. If you learn that a raise or promotion isn’t going to happen right away, ask what specific steps you can take in the next year or two to make it a reality. Read this article for more information on how to seek a raise or promotion.
  • Do freelance work. If you work in a field that lends itself to doing freelance work, take advantage of that opportunity to earn extra income to help you save money fast! I have been doing freelance writing and editing since before I graduated from college with my English degree and editing minor, and doing freelance work has not only helped me gain experience in other areas besides what I do for my full-time job but has also at times (when I wanted to give the time to it) brought in significant additional income.
  • Do coaching or consulting. Similarly, if you have job experience or a skill that lends itself to coaching or consulting, put that skill to use! Popular areas for consulting include human resource (HR) consultant, public relations (PR) consultant, marketing consultant, business management consultant, and accounting consultant. Popular areas for coaching include financial coaching, job coaching, personal fitness coaching, and leadership coaching. Look for opportunities on indeed.com or your favorite job website.
  • Get a (second) job. If one spouse is available to get a second job in the evenings or on Saturday, for example, then this is another great potential way to earn additional income. And if you are a one-income family, or if one of you works only part-time, you might want to consider reentering the workforce or going full-time temporarily in order to save money more quickly.
  • Earn passive income. Some options for earning passive income are to create a product you have someone sell, write a book, create a money-making podcast or vlog, develop an online course, or participate in affiliate marketing. Read this article to learn more ideas for earning passive income.
  • Sell stuff on eBay or Amazon. If you have a good eye for a bargain, you can buy items at thrift stores or garage sales and sell them for a profit on eBay, Amazon, Craigslist, or your local online classifieds.
  • Sell your clothes to consignment shops. If you’re like most people, you probably have more clothes than you need. So use them to bring in some quick cash!
  • Have a garage sale. Declutter and earn money, all at the same time!

Check out this article to learn more about increasing your income!

Day 15 Challenge: Find at least one way that you can work toward increasing your income starting this week. Write down your goal, and put it where you will be reminded of it often.

 

Day 16. Look at possible side hustles.

If you would rather earn money without working another regular job or working freelance or doing consulting or coaching related to your full-time job, there are a lot of things you can do to earn a little extra income with an unrelated side hustle.

Some ideas include starting your own small business where you turn a hobby into a money-maker, walking dogs, babysitting, being a virtual assistant, or driving for Uber or Lyft.

Another idea for an awesome side hustle is to start a money-making blog. The potential for significant income is one of the reasons that I started this blog. If you love helping people and enjoy writing, being a blogger might be a great fit for you. In addition to great income potential (check out these amazing income reports of bloggers who make $10,000 to $100,000 or more per month!), there are many other benefits of being a blogger, such as being able to be your own boss and work on your own schedule. Learn how to start a blog for less than $5 a month.

Discover how to start a side hustle and find out about many side hustles that you can explore.

 Day 16 Challenge: For this financial challenge, come up with at least one side hustle that you would enjoy doing in your spare time to bring in a little extra cash.

 

Are you ready to start making more money? Sign up below to participate in the free 10-day Earn More Money, Change Your Life challenge and learn actionable steps you can start taking today to really increase your income!

Day 17. List stuff to sell on your local online classifieds or with Craigslist.

Many of us (myself included :-\) have more stuff than we know what to do with. So why not sell some of that stuff, declutter your life a little, and have a little more money in your pocket? Here are some ideas of things you might sell on your local online classifieds or through Craigslist or Facebook Marketplace:

  • Clothing and shoes
  • Electronics
  • Furniture
  • Computer and cell phone equipment and accessories
  • Appliances
  • Game consoles and video games
  • Outgrown baby and kids’ clothes, toys, and gear
  • Unused pet supplies and gently used paraphernalia

Day 17 Challenge: Find at least one thing you can sell through your local classifieds, Craigslist, Facebook Marketplace, or a similar app.

18. Plan to do a no-spend challenge.

I love no-spend challenges because they are an excellent way to save money fast! We have done a few no-spend challenges now in our family, and they have been great. You can learn all about how to do a no-spend challenge here.

If you have never done a no-spend challenge, give it a try! A no-spend challenge is where you go for a week, two weeks, or even a month or more either without spending money or without spending money on anything besides the bare essentials. 

Or you could do a no-spend challenge in just a particular category, if you have a particular area where you could fairly easily save a bunch of money because you spend a lot in that category, such as clothing, eating outor entertainment.

To save the most money quickly, do a complete no-spend challenge. You could start with a one-week no-spend challenge the first time, and then do two weeks, and then go for a whole month. Or if you really want to turbocharge your savings and short-circuit your spending habits, you could go all in and start with a one-month no-spend challenge. 

Learn more about how to do a no-spend challenge here. And learn about many of the benefits of doing a no-spend challenge here.

Day 18 Challenge: For your day 18 financial challenge, commit to do either a no-spend challenge in a specific budget category or a complete no-spend challenge, and plan to do it for at least a week. Plan to do your no-spend challenge within the next month or two. (This would be a great way to start your finances with a bang after the summer, for example.)

 

Day 19. Automate your money and your savings.

Automating your finances is another great step that you can take toward achieving financial freedom. I am also a huge fan of automating your money. Automating your money is an easy and painless way to ensure that you are sending your money where you want it to go.

Automating your money can help you to save money fast by allowing you to send money directly to savings accounts, credit card companies, car loan companies, and more. This will help you save up money quickly and pay off debt quickly. Automating your money can help you to easily save up for a purchase, pay off a debt, pay for an expense, and more.

You can (and should! :)), as soon as you can, automate your finances to save more money, pay your bills, pay off debt, save for retirement, save for large purchases, fund your children’s college educational savings accounts, and ultimately find financial freedom.

Learn all about how to automate your money here.

Day 19 Challenge: Automate at least one area of your money (by tonight if you can, or at least by this weekend).

 

 

Day 20. Sign up for a free rebate service such as Ebates or Ibotta.

With rebate services such as Ebates and Ibotta, you can earn money by shopping for things and at places where you would shop anyway. With Ebates, you generally buy items through their website to save up to 40 percent on purchases. It is primarily an online service.

Ibotta, on the other hand, is an app you use primarily after you make purchases at brick-and-mortar stores. Because of this, you can actually sign up for and use both apps to save on purchases (like I do!). Sign up for a free Ebates account here, and sign up for a free Ibotta account here. You can literally sign up for both in just seconds and let the savings start stacking up.

With rebate services such as Ebates and Ibotta, you can earn money by shopping for things and at places where you would shop anyway. With Ebates, you generally buy items through their website to save up to 40 percent on purchases. It is primarily an online service. Ibotta, on the other hand, is an app you use primarily after you make purchases at brick-and-mortar stores.

Because of this, you can actually sign up for and use both apps to save on purchases! Sign up for a free Ebates account here, and sign up for a free Ibotta account here. You can literally sign up for both in just seconds and let the savings start stacking up.

Day 20 Challenge: Sign up for a money-saving app like Ebates or Ibotta.

 

Day 21. Check out a personal finance book (or books) from the library. And then read it.

As one of my favorite financial experts, Dave Ramsey, says, leaders are readers. I work full-time as a professional editor, so I literally read all day long, and I’ve been a bookworm for as long as I can remember. One time, when I had a long commute to work, I even started reading all of the personal finance books that our library had, from A to Z. I made it more than halfway through the alphabet before something else eventually caught my interest and I started reading other things, but it was a lot of fun and a great experience to read all of the differing perspective on money. Some of my favorite personal finance books are these:

The Total Money Makeover by Dave Ramsey. Possibly my favorite personal finance book, this is the best one I have read as far as laying out a simple plan that you can follow to save, get out of debt, and invest to build wealth.

The Automatic Millionaire by David Bach. This book explains the benefits of automating your finances so that you can set up systems to help you win with your money. By automating your finances you can save and invest in order to build wealth and retire in style. Set it and (almost!) forget it!

Rich Dad, Poor Dad by Robert Kiyosaki. Though I don’t believe in all of the principles that the author follows (such as being highly leveraged [using a lot of debt] to build wealth), I definitely do believe in his entrepreneurial spirit and the importance he places on gaining financial literacy.

Love Your Life, Not Theirs by Rachel Cruze. This book emphasizes that if we always focus on what we don’t have and on comparing ourselves to others, then we will always be unhappy and broke. Rachel teaches the importance of getting out of debt in order to avoid the worry and stress of living paycheck to paycheck and teaches sound financial principles such as living on a budget and saving for the future that bring joy and build a solid financial foundation.

Your Money or Your Life by Vicki Robin and Joe Dominguez. This book takes a different approach from most of the personal finance books out there. It emphasizes discovering your values and then aligning your life to follow those values. It also shares the intriguing idea of looking at everything you buy in terms of number of hours worked, and it suggests considering whether the things you buy are really worth the number of hours of life energy spent to pay for them. The authors suggest the idea of potentially working less, and living more.

Day 21 Challenge: Put at least one personal finance book from the library on hold tonight, and then check it out and read it.

 

Day 22. Read another one of my articles here on this personal finance blog. 🙂

This is a shameless plug here. But if you’re interested in learning how to earn more, spend less, save more, and invest more, then you’ve come to the right place—this blog is for you! Some of my favorite blog articles are listed below.

Day 22 Challenge: Read at least one additional blog article this evening to help you learn more about personal finance and reach your awesome financial goals.

 

Day 23. Pay a little extra money toward your credit card debt, car loan, or home loan.

Become debt free is a wonderful step to take toward achieving financial freedom! If you have debt, work to pay it off as quickly as possible. Take a few minutes to look at your budget right now (if you don’t have one yet, download a simple one above that you can start using today!), and find areas where you can save money in order to start paying down your debt.

The more debt you can pay off as quickly as possible the better, but for now if all you have is a little room in your budget to start making small extra payments, that extra principal toward your debt will really add up over time. For more information on how to stop relying on credit cards and pay off your credit debt, read this article. And read these articles for more information on paying off your car loan or paying off your home loan (become mortgage debt free! woo hoo!).

Day 23 Challenge: For this challenge to help you achieve financial freedom, choose at least one debt you have, and transfer money or set up an extra or larger than usual payment to pay a little extra toward that debt.

Day 24. Donate to charity or do an act of service or act of kindness.

Even though this may actually cost you a little money or time rather than saving it (unless you choose to use your charitable donation as a tax deduction—double win!), I believe there is a strong correlation between being a generous giver and managing your money well in order to build wealth. I feel that any money we give or time we give will be returned to us, and then added upon.

Day 24 Challenge: Find at least one person that you can serve, or sign up to volunteer with one of your favorite nonprofit organizations.

 

Day 25. Sign up for term life insurance.

This, too, costs money in the short-term, but in the long-term it will save your family from likely financial disaster if you ever need the insurance protection if you or your spouse passes on.

If you are a parent of dependent children, then you need life insurance. To find good term life insurance agencies, check out Zander Insurance, a firm that will shop around among the different insurance companies to find you the best price for your life insurance. It’s the company we used to get our own life insurance.

 Day 25 Challenge: Especially if you have children, get a free term life insurance quote from Zander Insurance or another insurance broker or agency, and begin the process to get term life insurance for you and your spouse.

Day 26. Cut up your credit cards and close the accounts, and get a rewards debit card, instead.

Getting out of credit card debt is an important part of how to achieve financial freedom. I know credit cards may feel like nearly a necessity for many people in our society, but you really don’t need them. And if you have credit card debt (if you don’t pay off your credit card bill every month), you’re really much better off without them. If you love the rewards that you get from your credit card, try these reward debit cards, instead:

The PayPal Debit MasterCard is the rewards debit card that I have had and used for years now. It earns you 1 percent cash back on all signature-based purchases (where you don’t use a PIN). Opening an account with PayPal is free, and another advantage that I really like is that you can link your PayPal card to various checking accounts and transfer the money from whichever account you want into your PayPal account to cover your purchases. There are no minimum balances (in fact, you don’t have to keep any money in your PayPal account at all; it will just pull the funds from whichever account you have set up as your default backup account) and no fees.

Discover Bank has a checking account that pays 1 percent cash back on debit card purchases. There are no monthly fees or minimum account balance requirements.

American Express Serve cash back debit card offers 1 percent cash back for every $1 you spend with your prepaid debit card. There is no cap on the amount of cash back you can earn.

The SunTrust Delta SkyMiles World debit card offers 1 mile for every $1 you spend on PIN point-of-sale transactions and 2 miles for every $1 you spend on direct purchases from Delta.

The Key Bank rewards debit card offers one reward point for every $6 you spend on qualifying purchases, and there is no cap on the amount of points you can earn.

Though there aren’t nearly as many debit card rewards programs as there used to be, they still exist, and if you love the rewards but have trouble managing your spending with credit cards (that is, you carry a balance on your credit card), then they’re a great alternative.

Read this article for information about additional rewards debit cards available.

For information about how to stop relying on credit cards, read this article.

Day 26 Challenge: If you have credit card debt, cut up your credit cards (be sure to still pay them off!), and sign up for a rewards debit card, instead.

  

Day 27. Download a personal finance app to help you manage your money.

There are several great personal finance apps that are worth checking out. Here are a few:

Mint. We used Mint for years to get a good idea of our overall financial situation because it allows you to link all of your bank accounts and shows you how much you spent overall and your individual and overall bank balances. It is a good, free budgeting tool. It also does link to your investment accounts, but Personal Capital is much stronger in this area. And so now that we are investing more in nonretirement accounts (for one thing, we’re working on our 100 percent down payment for our next house! :D), we’ve switched to using Personal Capital. However, if you’re focused primarily on budgeting and monitoring your overall bank balances and you want a good, free app to do that, then this is a good choice.

EveryDollar. Created by Dave Ramsey and team, this is another popular budgeting app. EveryDollar is a zero-based budgeting tool, which means that it requires that you designate all of the money you earn into the various budget categories you create, without having any money left over (which is what you should do when you budget, by the way, so that there’s no leftover slush money that just sort of evaporates into thin air). There are both free and paid versions of this app (the paid version integrates with your checking account and categorizes your spending automatically).

You Need a Budget (YNAB). Another popular budgeting tool, one benefit of You Need a Budget is that it notifies you if you don’t follow the budget you created and helps you to adjust in other categories to keep your overall budget balanced. Like EveryDollar, it is a zero-based budgeting tool. It’s designed to help you stop living paycheck to paycheck by encouraging you to work toward spending last month’s paycheck rather than this month’s (so cool; a $1,000 buffer in your checking account can also help accomplish the same thing). The app is easy to use and is a good tool for those new to budgeting. It is available for desktop and mobile devices. You can also sign up for online classes to help you start to budget effectively. As of 2018, it costs $6.99 per month.

PayPal. PayPal is a great tool that allows you to request payments from others as well as pay others. If you use it to pay or receive money from friends or family, there are no fees. Otherwise, there is a small fee for each transaction. You can also get a PayPal debit card to use to make purchases. One benefit of PayPal is that if you use it for your business, you can connect a rewards debit card to your account that pays 1 percent cash back. I’ve had their rewards debit card for years, and I love the guilt-free rewards (since I don’t like credit cards).

Venmo. Popular among millennials, the app Venmo was purchased by PayPal and is another app that lets you pay people and share payments among family and friends.

Acorns. Acorns is an easy-to-use investment app that automatically invests your spare change (by rounding up to the nearest dollar after purchases), a one-time contribution, or a recurring amount you designate in a wide range of diversified stocks and bonds.

Personal Capital. If you want to be able to track your financial progress—such as your debt repayment, your progress toward a financial goal, and the growth of your retirement and other investment portfolios—then you should sign up for a great free app called Personal Capital. It’s fun (for nerds like me) to be able to see all of that financial information together in one place in order to easily see our overall financial picture and be able to look back over time to see how our savings and investment accounts have grown. This is (at least so far) my favorite personal finance app. Sign up here to open your free account today.

Day 27 Challenge: Download at least one personal finance app that will help you better manage your money.

 

Day 28. Open some high-yield savings accounts and set up automatic transfers.

If you don’t already have a high-yield savings account, I recommend opening a checking account and savings accounts with Capital One 360 or a similar online bank. Yes, that’s right—savings accounts, multiple. We opened our accounts with them back when they were ING Direct, and though I was pretty sad when they were bought by Capital One, I have to say that the couple of times that I’ve needed to have something resolved (both were minor user errors on my part), their customer service was great. We’ve never had a problem with them.

And the fact that you can super easily open multiple savings accounts to save for things like vehicle purchases, vehicle maintenance, house maintenance, auto insurance payments, life insurance payments, Christmas, other gift giving, vacations, and so much more is just awesome. These funds to save for various larger expenses are sometimes called sinking funds, and they are an important part of getting and staying out of debt and building wealth.

If you don’t have an emergency fund, start building your initial, starter emergency fund now before saving for larger purchases you will eventually need. So with the money from your first paycheck (if you get paid twice a month, for example), set up automatic transfers with your bank to transfer $150, for instance, directly into your emergency fund savings account.

After you have a fully funded EF, you should open various other savings accounts (see the list above) and set up regular automatic transfers to transfer a certain amount of money each paycheck into the various accounts.

Day 28 Challenge: If you don’t already have high-yield savings accounts, open a savings account at an online or other bank or credit union with good interest rates. And then open several more savings accounts (at the same bank, linked together). Then start to fund the various savings accounts so that they can serve as sinking funds you can use to pay cash for expenses like vehicle maintenance and repairs, vehicle purchases, home maintenance, vacations, Christmas shopping and gift giving, and more.

 

Day 29. Set a retirement goal.

Investing regularly for retirement is a wonderful way to work toward achieving financial freedom.

And to have an awesome retirement, you need to plan for it! Most people have never taken the time to consider how much they should have for retirement. But you are not most people! (Not anymore, anyway! :)) So take a little time today and figure out how much you should have saved by the time you retire.

In order to determine how much you should have saved for retirement (and the awesome thing is, it’s probably less money than you think you will need), first do this: Determine what you feel like your annual salary will need to be to provide a comfortable living. As you consider this number, keep these things in mind:

  • You should plan to not have any consumer debt during retirement. That means no car payments, RV payments, credit card debt, and so on.
  • You should also have your mortgage paid off long before you retire (don’t plan on having to make a mortgage payment during retirement).
  • You should have a good-sized emergency fund so that financial difficulties do not completely derail what might be a fairly fixed income. (And you should plan to have one because having a three- to six-month emergency fund is just a good idea for everyone because life happens.)

If you have around 20 years left till you hope to retire, an approach you might take to get a rough idea of your needed retirement savings could be to take the amount of your current monthly expenses (if you anticipate that they will stay about the same, adjusted for inflation), multiply that amount by 12, and then double that number.

So if your monthly expenses are $5,000, you would multiply that by 12, which is $60,000, and then double that to $120,000. Then multiply that number by 10 to 12, and that would be the rough amount that you could aim to have in your retirement accounts. So, for our example, that would be $1.2 to about $1.5 million.

In calculating these numbers, we are going to assume that you will keep your retirement money in good growth stock mutual funds throughout retirement so that they can average about a 10 percent return (really over the long-term they can average higher than that, but 10 percent is a nice round number). So as long as you keep your money in the stock market in good mutual funds with good, long track records, you can earn on average about $120,000 a year in our hypothetical situation.

And you would never even really have to touch the principal in your retirement accounts (so you would always keep the original $1.2), so you could have it as money you could draw on for occasional fun splurges or to slightly increase the amount you draw out each year to keep up with inflation.

If you have about 30 years till retirement, you could use the same formula, but multiply your monthly expenses by 12 and then multiply that number by 2.5 to 3. So if you predict you would need $50,000 to pay for your expenses each year, you could multiply that number by say 2.75, and that would be about $137,500 a year you would need in retirement. And you could then multiply that number by 12 (to give yourself a little more cushion), and so you would need about $1.65 million in your retirement account.

Another great option to try to determine how much you should save is to use an online retirement calculator. Especially if you have longer than 30 years till retirement, try an online retirement calculator found by Googling “how much should I save for retirement.”

When you’re willing to keep your money in the stock market during the span of your retirement, the risk over the long-term really is quite low, but you’re able to maintain your nest egg (principal) and not deplete it.

 Note: These are my rough estimated calculatioins, but I am not a retirement planner or investing professional! Please do your own research with an investing professional! 🙂

Day 29 Challenge: Do your best to calculate how much you  should have saved for retirement. And then figure out, by calculating backwards, how much you should be saving each month to reach that goal.

 

Day 30. Begin contributing to your company 401(k) or other retirement plan or increase your contribution to at least 10 percent (and preferably 15 percent).

If you are wanting to do something that will have amazing results for your future, start regularly contributing to your company 401(k) or other retirement plan, or increase your contributions to at least 10 percent (if you can manage 15 percent, increase it to that). Because of the awesome power of compound interest, you’re relatively small efforts now can have huge dividends in the future (literally!).

And because most employers also contribute to their employees’ retirement plans by matching a portion of what employees save, the results are even better (often twice as good—when the company matches dollar for dollar!).

Let’s say, for example, that you make $40,000 a year, or about $3,333 a month, and that you contribute 10 percent of your income and receive a 3 percent match on your contributions from your employer. So you would invest $333 a month into your Roth 401(k) (because you would pay taxes now before you invest but all future earnings are tax free!), and your employer would invest $100.

If you did that from age 25 to age 60, because you decided to retire a little early, and you earned a reasonable 10 percent average annual return, you would have $1,549,066 in your retirement account. Even with inflation and $1.5 million not being what it used to be, I think you could get by on that. 🙂

Day 30 Challenge: For your day 30 financial freedom challenge, make a solid plan to begin investing in your company retirement plan if you have not done so yet. Once you are out of nonmortgage debt, start investing at least 10 percent of your income toward retirement as soon as you are able, and 15 percent is even better for an awesome retirement. 🙂

Even if you can contribute only 1 percent or only $100 a month, start there, and then slowly increase your contributions over time. (We started by contributing 2 percent to retirement way back when, and we felt that we were doing great! :))

 

Are you ready to learn more about investing and start seriously saving for your retirement? Do you want to change your financial life? Do you want to be able to invest like you need to to save for the retirement you dream of? Do you want to be able to travel extensively, pursue hobbies passionately, and give generously? Are you ready to build wealth and work toward financial freedom? My new, free Invest Your Money, Change Your Life 5-day challenge will show you how. Sign up below!

 

Day 31. Open and begin to fund an IRA or Roth IRA.

If you are already contributing in your Roth or traditional 401(k) up to the maximum amount that your company will match (say, for example, that they will match your contribution up to 5 percent of your income), then the next best thing you can do after you contribute that 5 percent to your Roth 401(k) may be to contribute the rest of the money you designate for retirement savings into a Roth IRA. (Unless you are a very high income earner and think you will be in a lower tax bracket in retirement than you are now, in which case you may want to invest in a regular, or traditional, IRA).

Save enough more in your Roth IRA that you are saving at least 10 percent of your income toward retirement, and if possible, contribute 15 percent of your income toward retirement.

Ready to start investing in a Roth or traditional IRA but not sure where to start? Get the Roth IRA cheat sheet to get simple step-by-step instructions for how to open a Roth (or traditional) IRA in about 10 minutes!

 

The reason to invest the remaining amount of your money for retirement in a Roth IRA rather than contributing everything in your company 401(k) is that when you contribute to an IRA, you have a much wider array of options to choose from as far as the mutual funds available to you to invest in.

Where most company 401(k) plans probably have at most 20 mutual funds that you can choose from (my company 401(k) doesn’t even have that many), with a brokerage firm such as Schwab (where we do our Roth IRA investing as well as the bulk of our nonretirement investing) you have literally thousands of mutual funds that you can choose to invest in.

That means that the rate of return for the mutual funds you can invest in through an IRA could likely be higher than those offered by your company retirement plan. When choosing your funds to invest in, choose funds that have a good track record—that have performed well for at least the last 5 to 10 years (and longer is even better). I recommend dividing your contributions equally between large cap, mid cap, small cap, and international mutual fund investment accounts.

If you want to know how we choose the investment accounts that we are personally invested in for our Roth IRA, fill out the information below, and I’m happy to send you the information. (There are no strings attached, and I don’t make any commission or anything if you follow this information; it’s just the kind of information that I really wish I would have known before we started investing for retirement more than 15 years ago.)

For more information about the differences between a traditional IRA and a Roth IRA, read this article.

Day 31 Challenge: If you are currently contributing at least up to the employer match in your comparny retirement plan, strongly consider opening a Roth (or traditional) IRA so that you will have more investing options for retirement. If you are not yet contributing up to the company match, work steadily toward that goal, and make a plan to open a Roth (or traditional) IRA once you can contribute more than the company match to your 401(k) or similar plan .

 

Conclusion

The information above really will help you know how to achieve financial freedom—if you follow it. 🙂 In as little as 30 minutes each day for a month, you can do so many things that could help you to earn more, spend less, save more, and invest more money—the possibilities are endless! You can start to change your financial future today—right now—by making small steps to work toward financial security and to build wealth over time.

Join the new Families for Financial Freedom community Facebook group to receive encouragement and ideas for how to manage your money and reach your financial goals and dreams.

 

What are your best tips for how to achieve financial freedom? What steps are you taking now to reach that awesome goal? Leave a comment below and let me know—I would love to know your ideas!

 

Invitation to Share

Was there something in this article that inspired you to change something about your money? Are there ideas or tips that you feel could help a family member or friend or people in general? Would you please take a minute to share this article via email or social media? I would love your help to share these principles of financial well-being with others. Thank you!

Join Our Facebook Group!

Join our closed Families for Financial Freedom Facebook group to get support and share ideas for how we can all improve our financial well-being by earning more, spending less, saving more, and investing more and reach our financial goals. You can do this! And we are here to help.

How to Become a Millionaire in 20 Years—from Nothing!

how to become a millionaire with no money

How to Become a Millionaire with No Money

In this article I am going to explain how to become a millionaire with no money! Read the simple steps below to learn how!

A million dollars is a magic number for a lot of people. And even though a million dollars is not what it was 50 years ago, $1 million is still enough to allow you to retire in comfort if you manage your money well. Find 9 simple tips to be smart with your money here.

You can become a millionaire in as little as 20 years by following the simple steps outlined below—it’s not as hard as you think!

 

How to Become a Millionaire with No Money: 7 Simple Steps!

Are you looking to make $1 million? Though $1 million isn’t what it used to be, having a million dollar net worth will still allow you to live a comfortable and very enjoyable retirement.

How can you become a millionaire fairly easily in just 20 years? It won’t be as hard as you think! The answer is compound interest. Albert Einstein called compound interest the eighth wonder of the world. You can learn more about the amazing power of compound interest here.

Read on to learn how you can use compound interest to become a millionaire even when you have no money—in just 20 years!


 

 

 

Tip: Pin the image above to Pinterest so that you can easily refer to this article on how to become a millionaire with no money in just 20 years later!

 

 

Become a Millionaire When You Have No Money—in Just 20 Years!

If you want to become a millionaire in just 20 years, you probably think you have to have a huge income and be able to save thousands of dollars a month. But the awesome truth is that you don’t! You can have a good but ordinary household income and still become millionaires in just 20 years!

 

How Much Do You Need?

In order to become millionaires in just 20 years, you do need to invest a significant amount of money—but not a huge amount of money. If you and your spouse will each invest just $500 a month, for $1,000 a month total, and you will do that for 20 years, then you can reach this goal!

And all that that requires is that you each max out your Roth IRA or traditional IRA each year. (The max contribution for an IRA or Roth IRA in 2019 is $6,000, or $500 a month.) Easy! Or, at least relatively easy, anyway, given the amazing reward that you get if you do it. 🙂 Can you imagine being a millionaire in just 20 years by saving just $1,000 a month? Difficult? Yes. But doable if you really want it? Definitely!

Learn simple changes you can make to your finances to be able to fully fund your Roth IRA or traditional IRA each year.

 

How Can You Get to $1 Million in 20 Years?

If you invest your combined $1,000 a month and receive an average annual rate of return of 12 percent, which is definitely possible if you invest for the long term in good growth stock mutual funds, your investments would have an estimated value of about $970,000.

Keep contributing your $1,000 a month and letting the money grow, and in just 3 more months you would have an estimated $1,000,904! So in just 20 years and a few months, you would have over $1,000,000! And that doesn’t even include any other investments you might have acquired over the years such as your home or other real estate, business net worth, and so forth.

So you definitely can become a millionaire in 20 years starting with no money by investing just $1,000 a month! Becoming a millionaire is a great goal to help ensure you reach financial freedom later in life!

 

Do You Want to Make That $1 Million Go Even Farther?

Are you investing yet in a Roth IRA or Roth 401(k)? If you make those monthly contributions into a Roth 401(k) or Roth IRA, then all of that money will be tax free when you withdraw it too! That means no paying Uncle Sam again in retirement. Woo hoo! Learn how you can fully fund your Roth IRA or traditional IRA each year.

Note: Are you new to investing and want to know how to start saving for retirement? Do you want to know, generally, what kinds of retirement plans to invest in, how much to invest, what types of investments I would recommend for retirement, and more? Then check out this article with 5 simple steps to start investing for retirement.

 

Check out these related articles:

 

How to Invest Your $1,000 a Month

If you have a company 401(k) or other retirement plan where you receive a match, take advantage of it, and invest at least enough money to receive the full match in your company plan.

If you don’t receive a company match, then you will probably be better off investing in a Roth IRA than investing in your company 401(k) because you will generally have many more options in an IRA. (And with many more options you are likely to find mutual funds that offer a track record of better long-term rates of return.)

To help you adequately diversify your retirement account, I recommend spreading your investing equally among four categories: large cap (large company), mid cap (mid-sized company), small cap (small company), and international mutual funds.

We have investment accounts through both Schwab and Vanguard, and they are both good brokerage companies. My Roth IRA is with Schwab, and personally I prefer them over Vanguard. Fidelity is another good option.

To find out how we choose the mutual funds that we invest in, fill out the information below, and I’d be happy to send you the information. No strings attached, and I don’t sell anything related to stocks or make any money off of sending you this information. It’s just the kind of thing I really wish I would have known almost 15 years ago when we started investing for retirement.

Ways to Save $1,000 a Month to Become a Millionaire Starting with No Money

In order to find $1,000 a month in your budget, see if you can reduce your spending or save more money in one or more of the following areas.

1. Cut back on eating out to help you become a millionaire.

The average American family spends about $3,000 a year on eating out. Even though you’ll have to replace some of that cost with the cost of buying groceries to eat at home, the savings here can be amazing. (To learn how to save money on your grocery shopping, read this article with more than 70 tips for slashing your grocery spending.)

For more than 10 years we’ve spent less than $300 a year on eating out for our family, and even though that may seem extreme to some, I know that that has been part of the reason that we’ve been able to reach other financial goals that we’ve set even though we have a single, average income. Read this article to learn how we save money eating out (when we do eat out :)).

2. Slash your grocery budget.

The grocery budget is one of the areas where most people can save a lot of money if they choose to because there are so many options involved and because the difference between what is expensive and what is cheap is so drastic sometimes.

For example, the local discount store where we buy most of our groceries regularly sells frozen boneless skinless chicken breasts for $1 a pound. And yet you can also easily spend $5 to $10 a pound or more on expensive cuts of meat. The same goes for produce in season versus produce that is not in season. People spend a lot of money (a lot of money) on junk food and soda and alcohol and other nonessential items; that’s another area where you can likely trim substantially.

 

Grocery Price Comparison Cheat Sheet

One of the best ways that you can slash your grocery budget is to use a grocery price comparison cheat sheet. With a grocery price comparison cheat sheet you have at your fingertips the information you need to spot great deals and pass over grocery items that are overpriced. Sign up for this free, super handy cheat sheet below!

 

Plan Your Meals

Another important way to save a ton of money on groceries is to meal plan. Get this free weekly meal planning worksheet (sign up below) to get organized and easily plan your week’s worth of meals! The meal planner comes with helpful meal planning tips that will help you make the most of your grocery shopping budget!

 

Read this article for more than 70 suggestions for how to slash your grocery bill without needing to use coupons!

 

3. Cut your entertainment spending and invest the money toward becoming a millionaire.

Another area where you can reduce your spending is with entertainment. Fortunately, there are tons of ways that you can save money on entertainment.

 

Find Free and Cheap Activities to Enjoy as a Family 

First, find things to do with your spouse or family that are free or cheap. There are so many fun activities that you can do for little or no money that reducing spending in this area really isn’t very hard. Check out this huge list of over 90 free activities you can do with your family.

 

Cut Your Cable or Satellite Bill

There are a lot of free or cheaper alternatives to cable and satellite, so try pulling the plug on these services and banking the savings. The average cost of paid TV in the U.S. is close to $70 a month, so if you will cut your cable or satellite and invest the money each month instead, you will be one-third of the way to saving your $200 a month to become a millionaire right there!

With digital TV through a standard antenna, there are many channels available just on your regular TV—for free. If you haven’t checked them out for a long time, you should. And if you can be a little patient, the library also carries many of the programs and movies you regularly watch, for free. But if neither of those options works for you, you can try Netflix, Hulu, Sling, or other similar options

 

Slash Your Cell Phone Bill

Also, as part of saving money on your entertainment, don’t forget to take a look at the money you spend monthly for your cell phone plan. The average family in the U.S. spends over $1,000 a year (about $90 a month) on their cell phone bill. And I know a family that spends (or used to spend—I really hope that it is used to spend) $500 a month on their smartphone plans!

You can save a considerable amount if you’re willing to reduce the amount of data you use (or research new data plans with your carrier in case prices have dropped) or switch carriers.

Since September 2018, we’ve been using Xfinity Mobile for our cell phone carrier! If you’re in an area with Xfinity high-speed internet and mobile, you’ve got to check them out! We’re paying an introductory price of $40 per month for our internet (same price as the much slower internet that we used to have from a different provider; it is then set to go to $65 a month, but you can bet we’re going to try to negotiate that down!), and the cell phone plan is virtually free.

Since we’re such light data users (especially given the fact that Xfinity Mobile has free hotspots it seems almost everywhere!), we pay only $3.16 a month for taxes and fees for each smartphone line. (That’s the price if you use less than 100 MB of data per month, which we do; then it’s $12 per GB per month after that, or $45 per month for unlimited.) It’s such an awesome deal!

And Xfinity Mobile has the same coverage as Verizon, which reportedly has the best cell phone coverage in the U.S. You do need to sign up for Xfinity internet in order to use Xfinity Mobile, at least initially. You can then drop the internet service if you want, but then you’ll pay an extra $10 per month per line for the mobile service. Interested in learning more or signing up? Use this referral code to save up to $100 when you sign up: 1RQ4SP 

Don’t have Xfinity in your area? Before Xfinity we were with Republic Wireless for over two years. They were a great company, and they are so much cheaper than having service with one of the Big Four cell phone carriers. I spent about $13 a month for my smartphone data plan. Isn’t that amazing? Check out their website to learn about their plans and pricing, and start saving today!

If you use more that 1 or 2 GBs of data, also consider Mint Mobile, which offers plans starting with 2 GB of 4G data and then unlimited LTE data for just $15 per month. That’s an incredible deal. Visit their website to learn more.

Also find ways you can save money on your current cell phone plan with these ideas to slash your cell phone bill here.

 

Save Money on Vacation

Another area where you can save a lot of money on entertainment is with your family vacations.

 

Do Family Staycations!

To save money when vacationing, try going on a staycation, where you vacation at or near your home. No matter where you live, you can still find tons of fun things to do in your own backyard! Chances are there are tons of things that travelers come to your area to do that you have never do—so check them out! 

Read this article to find more than 50 awesome ideas for things to do during a staycation!

 

Save Money through Services Like Airbnb and VRBO.com

You can also save money by staying at people’s homes through Airbnb and by staying in hostels. And by camping.

We’ve been staying at places through Airbnb for the last couple of years, and it’s been great. It’s how we’ve done most of our vacationing during that time—even more than camping. I love using Airbnb because the hosts are wonderful and the price is awesome. And so are the amenities (my favorite places are those with pools and hot tubs :)). Read five awesome ways that you can save money by using Airbnb here.

Sign up now for an Airbnb account and receive $40 to use toward your first stay. Pretty sweet 

 

Save Even More Money on Family Vacations

Save even more money on vacations by choosing many fun and inexpensive (or even free!) things to do while you vacation, using discount websites, traveling in the off or shoulder season if you can, comparing prices when you bundle services like airfare and hotel, and more!

You can find many more ideas for ways to save money on your family vacations here.

Read this article for even more ideas on how you can spend less on entertainment in various areas to help you become a millionaire.

 

Check out these related articles:

4. Save money on transportation.

Another area where families can save a ton of money is on their transportation costs.

 

Get Rid of Your Car Payments to Really Make Progress toward Becoming a Millionaire

One of the best things you can do to build wealth is to get rid of your car payments (and all debt payments).

The best make and model of car to own is the one that doesn’t have a car loan. 🙂

If you have car payments on a vehicle and it’s squeezing your budget and you can’t increase your income soon, you should look at selling it. Especially if you won’t likely be able to pay off the car in the next 18 to 24 months at the most, I would strongly encourage you to sell the vehicle.

Even if that means selling the car at a little bit of a loss (when you’re upside down on it) and taking out a small loan for the difference if needed, I would recommend you do it. And then sell some stuff or work extra or even borrow a little extra money from your credit union or local small bank to be able to buy a $1,000 to $3,000 car that you can get around in for a while till you can save up money to buy a more expensive vehicle with cash.

Because having $3,000 to $5,000 of debt on a personal loan and inexpensive car is a better option than keeping a large debt and having to make large monthly payments on your current automobile. And then you can save up and buy a nice vehicle you can afford—with cash! Learn how to buy a (nice) car with cash here.

If you will commit to buy cars with cash from now on and invest some of the money you were spending on car payments in your own awesome financial future instead, you will be well on your way to becoming a millionaire. Let’s work on building your wealth instead of the bank’s, shall we? 🙂

Upside down on your car? Learn how to turn things around and get out of an upside down car payment.

Learn how to get (and stay!) out of debt here.

 

Try These Other Ways to Save Money on Transportation

You can also save money on transportation by driving less through carpooling or biking or telecommuting, saving money on gas with apps like GasBuddy, saving money on car maintenance and car repairs, driving the speed limit :), finding cheaper auto insurance or saving money on your current auto insurance by taking advantage of discounts, and more. Find more than 30 ideas on how to save money on transportation here.

 

More money-saving tips: Do you want even more ideas on how to reduce your spending in order to find your $200 a month to invest? You can find ways to save money on housing, save money on utilities, and save money on clothing.

Also read this article that has more than 20 ideas for ways to reduce your spending in nearly every budget category.

 

5. Increase your income to help you become a millionaire.

Even though I spend a lot of time teaching people how to spend less money, and I honestly feel that learning to control your spending is the more important of the two factors when it comes to gaining financial stability and building wealth, I feel that earning more income has the greatest potential impact. And let’s be honest—it’s just more interesting and more fun. Because there are only so many things that you can do to reduce your spending (but check out this article to learn more than 20 ways to reduce your spending), but the opportunities to increase your income are nearly limitless!

Here are some simple ideas for things you can do to make more money starting today:

  • Work overtime. If you have the opportunity to do so, working overtime is a great way to help you to save money quickly.
  • Ask for a raise or promotion. If it’s been a few years since you received a significant raise and you’ve been an exceptional employee at work, make a list of your contributions and your accomplishments, and schedule a meeting with your boss to request a raise or a promotion. Focus on ways that you’ve earned the company money or saved them money. If you learn that a raise or promotion isn’t going to happen right away, ask what specific steps you can take in the next year or two to make it a reality. Read this article for more information on how to seek a raise or promotion.
  • Do freelance work. If you work in a field that lends itself to doing freelance work, take advantage of that opportunity to earn extra income to help you save money fast! I have been doing freelance writing and editing since before I graduated from college with my English degree and editing minor, and doing freelance work has not only helped me gain experience in other areas besides what I do for my full-time job but has also at times (when I wanted to give the time to it) brought in significant additional income.
  • Do coaching or consulting. Similarly, if you have job experience or a skill that lends itself to coaching or consulting, put that skill to use! Popular areas for consulting include human resource (HR) consultant, public relations (PR) consultant, marketing consultant, business management consultant, and accounting consultant. Popular areas for coaching include financial coaching, job coaching, personal fitness coaching, and leadership coaching. Look for opportunities on indeed.com or your favorite job website.
  • Get a (second) job. If one spouse is available to get a second job in the evenings or on Saturday, for example, then this is another great potential way to earn additional income. And if you are a one-income family, or if one of you works only part-time, you might want to consider reentering the workforce or going full-time temporarily in order to save money more quickly.
  • Start a side hustle. If you would rather earn money without working another regular job, there are a lot of things you can do to earn a little extra income with a side hustle. Some ideas include starting your own small business where you turn a hobby into a money-maker, being a virtual assistant, or driving for Uber or Lyft. Learn how to start a side hustle and find out about many side hustles that you can explore.
  • Start a money-making blog. The potential for significant income is one of the reasons that I started this blog. If you love helping people and enjoy writing, being a blogger might be a great fit for you. In addition to great income potential (check out these amazing income reports of bloggers who make $10,000 to $100,000 or more per month!), there are many other benefits of being a blogger, such as being able to be your own boss and work on your own schedule. Learn how to start a blog for less than $5 a month.
  • Earn passive income. Some options for earning passive income are to create a product you have someone sell, write a book, create a money-making podcast or vlog, develop an online course, or participate in affiliate marketing. Read this article to learn more ideas for earning passive income.
  • Use rebate apps like Ibotta and Ebates. With rebate services such as Ebates and Ibotta, you can earn money by shopping for things and at places where you would shop anyway. With Ebates, you generally buy items through their website to save up to 40 percent on purchases. It is primarily an online service. Ibotta, on the other hand, is an app you use primarily after you make purchases at brick-and-mortar stores. Because of this, you can actually sign up for and use both apps to save on purchases. Sign up for a free Ebates account here, and sign up for a free Ibotta account here. You can literally sign up for both in just seconds and let the savings start stacking up.
  • Sell stuff on eBay or Amazon. If you have a good eye for a bargain, you can buy items at thrift stores or garage sales and sell them for a profit on eBayAmazonCraigslist, or your local online classifieds.
  • Sell your clothes to consignment shops. If you’re like most people, you probably have more clothes than you need. So use them to bring in some quick cash!
  • Have a garage sale. Declutter and earn money, all at the same time!

You can find even more ideas for increasing your income in this article.

And learn about side hustles you can do from home here.

 If you are ready to earn more money (and who isn’t?!), then sign up for my free 10-day Earn More Money, Change Your Life challenge below.

6. Automate your investing.

Automating your investing will help ensure you become a millionaire even starting with no money. This is so important! So just do it! 🙂

If you have a 401(k), make sure you have a percentage of your income at least equal to the company match automatically withdrawn from the paycheck and invest in your 401(k). If you don’t have a 401(k) available, then open and set up automatic investing for your IRA through a brokerage company such as Schwab.

When you automate your finances it not only saves time but makes life much simpler—and it helps you stick to your financial goals!

To learn more about how to automate your finances to simplify your life, get out of debt, begin to save, and start to build wealth, I recommend The Automatic Millionaire by David Bach. It’s one of my favorite personal finance books because it gives simple, actionable steps you can follow.

Learn how to automate your finances to build wealth.

 

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7. Track your progress as you work toward your goal of becoming a millionaire, even with no previous money.

Even if you have no money saved yet, you can still become a millionaire in just 20 years by following the recommendations above! And tracking your progress is a great way to help ensure that you reach that goal.

Tracking your progress will help you see that reaching your goal really is possible, it will help you stay motivated, and it will allow you to make course corrections if and when you need to.

One important way to track your money is to do a monthly budget or spending plan. Another important task is to monitor your progress as you work to get out of debt. And especially once you are out of nonmortgage debt, another is to periodically review your net worth, including reviewing your retirement and other investment account balances.

 

 

Want a Great (Free!) Way to Track Your Financial Progress?

Check out the free app Personal Capital, which allows you to track how your investments as well as checking and savings accounts are doing and also view your account history to see how your accounts and overall portfolio have done over time. It’s a great tool! Sign up for your free Personal Capital account here.

 

Conclusion

If you are looking for how to become a millionaire with no money, the tips in this article will help you to accomplish that awesome goal! Becoming a millionaire in 20 years, even with an ordinary income and even when you currently have no money invested, definitely is possible!

To learn more about how to become a millionaire by investing for retirement, read this article.

 

What are your best tips for how to become a millionaire with no money? What questions do you have about how to become a millionaire in just 20 years starting from scratch? Leave a comment below and let me know your  questions and thoughts!

 

Invitation to Share

Was there something in this article that inspired you to change something about your money? Are there ideas or tips that you feel could help others? Would you please take a minute to share this article via email or social media? I would love your help to share these principles of financial well-being. Thank you!

Join Our Facebook Group!

Join our new, closed Families for Financial Freedom Facebook group to get support and share ideas for how we can all improve our financial well-being by earning more, spending less, saving more, and investing more and reach our financial goals. You can do this! And we are here to help.

How to Retire Early: 11 Easy Steps!

how to retire early

How to Retire Early

In this article I am going to teach you practical steps for how to retire early and achieve financial independence, no matter your current financial status. If you are longing to know how to retire early, then this is the article for you!

Tip: Save the image above to Pinterest so you can easily refer to this article on how to retire early later!

 

How to Retire Early: 11 Simple and Surefire Steps to Make the Dream a Reality!

The idea of being able to retire early is a truly awesome possibility to think about. It was actually reading a FIRE—which stands for Financial Independence, Retire Early—blog (and then several more FIRE blogs) that gave me the idea of blogging about personal finance in the first place. I can definitely appreciate the FIRE bloggers’ desire to retire early and, even more, to have financial freedom.

Since I’m already in my late 30s I learned about the FIRE movement a little late to be a super early achiever of FIRE, but I still plan to retire early—by 55 if possible, or even earlier than that if I can. If you too love the idea of retiring early, then the information below can help you reach that goal! Success to you! (And if you’re already on your way to retiring early, let me know in the comments below how you’re doing!)

Here are 11 simple steps for how you can retire early, even if you haven’t started saving for retirement yet!

 

1. Start investing for retirement as soon as possible in order to retire early—but get your financial house in order first.

Because of the amazing power of compound interest, you should start investing for retirement as soon as you possibly can—no matter what age you want to retire. But that is particularly true if you hope to be able to retire early.

There is a saying among financial experts that the best time to start investing was 20 years ago. But the next best time to start investing is today. So work to begin investing for retirement as quickly as possible.

But, so that you will be on solid financial footing, build up an emergency fund and pay off as much nonmortgage debt as quickly as possible first. Otherwise, when you have a financial setback (and statistically, it is a matter of when and not if that you will have financial hardships), you might have to pull money from your investment funds to pay for the emergency, and that is a bad idea because of the potential penalties and fees and the ability you then have lost for that money to grow.

You can learn how to create an emergency fund here and how to get out—and stay out—of debt here! And learn 5 simple steps to start investing here.

Once you begin investing for retirement (or if you already have), you should check out a great free app called Personal Capital in order to track your progress toward reaching your retirement and other financial goals. With Personal Capital, you can see not only all of your bank checking and savings accounts and even your credit cards and other finance accounts, but you can also link your retirement and regular nonretirement brokerage accounts.

This allows you to have a complete, overall picture of your current financial situation. And you can also view your account history to see how your accounts and overall portfolio have done over time. I love this very helpful tool and use it regularly! Sign up for your free Personal Capital account here.

 

2. Begin to save at least 10 to 15 percent of your income toward retirement (and then save even more when you can in order to retire early!).

As quickly as you can, arrange your monthly budget so that you can invest at least 10 percent of your income toward retirement (15 percent if you can). And if you are starting a little late saving for retirement or you want to have a more comfortable retirement given the many years you will likely live after you retire, and as your income increases over the years, you should strive to invest at least 15 percent of your income toward retirement. And then increase that amount as soon as you can to help you retire sooner!

To do that, continue to examine and adjust your budget (learn how to set up a simple budget here), and work to both cut your living expenses and increase your income.

As long as you are pretty young (say, mid-20s to early 30s), then if you want to retire by age 55 or so (and you expect to have about the same lifestyle as you have now), saving 15 percent of your income in a Roth 401(k) (or even traditional 401(k) if a Roth 401(k) isn’t available) and Roth IRA should get you there.

So, for example, if you are pretty early on in your career and you earn $50,000 a year and have saved $20,000 so far for retirement, if you invest 15 percent of your income every month from age 30 to age 55, you would have $1,460,005. If you will keep your money invested in good stock mutual funds throughout your retirement years, you will be able to earn enough to live on about 10 percent of your retirement fund (nest egg) and never touch the principal.

So you could live on about $140,000 per year, which even adjusted for inflation, should be enough for you to scrape by on. 🙂 And that’s if you never got a raise in that 25 years and therefore never increased your monthly retirement contribution amount.

And of course, you could choose to take out more and draw down the principal at some point, as well.

Also, as an important FYI, if you work for a company that offers a retirement account such as a 401(k), you can actually start pulling from your 401(k) at age 55, as well, penalty free—pretty awesome, right? Retiring at age 55 really is doable if you’re willing to sacrifice just a little bit to reduce your spending in other areas of your budget. And it’s even more possible if you’re willing to work to increase your income.

 

 

3. Determine roughly how much you will need to live comfortably when you retire.

As you are making your plans for how to retire early, calculate to the best of your ability how much you will need to save each month toward retirement. This number will likely get more accurate as you get closer to (early!) retirement age, but you can get a pretty good idea of what you will need to contribute by using this retirement savings calculator.

 

4. Be willing to work harder to increase your income, live on less in retirement, or else invest even more aggressively if you want to retire earlier than age 55.

If you want to retire earlier than age 55, then you can either reduce the amount you are willing to live on each month in retirement or increase the amount you invest each month.

This means you will either need to increase your income or reduce the amount you live on now. Or, for a double whammy, do both! To learn how others have been able to retire early, read this article on the fascinating FIRE—Financial Independence, Retire Early—movement.

If you could live on $70,000 per year in retirement (a little less than $6,000 per month), for instance, and keeping the rest of the numbers the same as our earlier example above, you could retire at age 49. And without any debt, if you own your own mortgage-free home, even adjusted for inflation (at an average rate of 3 percent per year), many people could get by fairly comfortably on the $40,000 worth of buying power that that amount of money would represent in 19 years. 

And if you are investing in a Roth 401(k) or Roth IRA, then the money would be tax free. That would mean you would have even more money available to you to live off of.

Note: If you’re going to retire before age 55, then you will probably want to do some investing outside of retirement accounts, in order to avoid the 10 percent penalty that you incur if you take money out of your retirement accounts before that age.

Or, as a possible alternative, you could also look at making use of the 72(t) tax rule, which allows you to use money from your retirement account if you choose to take out at least five “substantially equal periodic payments,” of an amount determined by your life expectancy, from your 401(k) and IRA accounts. Talk to your accountant if you have questions about this retirement strategy.

Now, going back to our example above, if in addition to being willing to live on $70,000 a year in retirement you were willing to invest $1,200 a month (about 29 percent of your income, in our example scenario above), then you could retire in 15 years, at the age of 45. Yes, that would require a lot of sacrifice, to save $1,200 a month—I don’t deny that. But you would also be retiring at 45 years old, and you would be accomplishing this amazing feat on an annual income of $50,000 per year! If you want to play with some numbers yourself, try this simple investment calculator. Fun times!

But let’s say you wanted to retire early—really early. And let’s pretend you had a higher-paying job, as most of the FIRE folks do, and you made $100,000 per year, or $8,333.33 per month. And let’s say you also started investing 36 percent of that great income, or $3,000 a month, at 25 years old after you earned your master’s degree in business administration (or information systems or another potentially high-paying field). If you did that, you would be able to retire at age 35! Amazing!

Yes, investing $3,000 a month even with that great income would likely still be a sacrifice, but you would be able to live on around $4,000 a month (depending on your tax bracket).

And that’s a good thing, because that’s also roughly what you would be living on, adjusted for inflation, later in your retirement. So I know that’s no caviar lifestyle, but millions of people and hundreds of thousands of families in America live on that much (or less) every month. And think of the reward for doing that! Retiring at age 35!

What do you think? Is it worth it to buy your financial independence—your financial freedom—so young in life? Leave a comment below and let me know your opinion!

Read this interesting article from Mr. Money Mustache to learn more about retiring early and how much you need to invest out of your income to retire after working for certain numbers of years.

 

 

5. Find ways to reduce your expenses in order to retire early.

As explained above, finding ways to reduce your expenses is a doubly effective way to help you retire early. By reducing your expenses you can save more each month for retirement, but by maintaining that lifestyle you also need less money to provide for your needs during early retirement.

You can probably reduce your spending for almost every item in your budget, if you become very intentional with your money. There are so many ways to reduce your spending, in fact, that I’m not going to list them all here because it’s enough great content to be an article (probably a book!) all on its own. For a great list of ways that you can start spending less money in different areas, read this article with more than 20 ideas on how to reduce your spending in various areas.

But here are just a few ideas to get you started:

Check out these related articles:

 

6. Work to increase your income to be able to better reach your early retirement goals.

As the examples above show, if you want to retire early the other important side of the financial equation opposite cutting expenses is to increase your income. There is only so much you can cut to reduce your expenses, but your ability and potential to increase your income is really almost limitless.

There are many, many ways that you can earn extra money, and many of them you can do right from home. Some of those include doing a side hustle to earn extra income, such as blogging (of course! my favorite :)), freelance writing or editing, proofreading, transcription, translation, doing work as a virtual assistant, bookkeeping, accounting, doing IT work, doing customer service, and more.

Here are some simple ideas for things you can do to make more money starting today:

  • Work overtime. If you have the opportunity to do so, working overtime is a great way to help you to save money quickly.
  • Ask for a raise or promotion. If it’s been a few years since you received a significant raise and you’ve been an exceptional employee at work, make a list of your contributions and your accomplishments, and schedule a meeting with your boss to request a raise or a promotion. Focus on ways that you’ve earned the company money or saved them money. If you learn that a raise or promotion isn’t going to happen right away, ask what specific steps you can take in the next year or two to make it a reality. Read this article for more information on how to seek a raise or promotion.
  • Do freelance work. If you work in a field that lends itself to doing freelance work, take advantage of that opportunity to earn extra income to help you save money fast! I have been doing freelance writing and editing since before I graduated from college with my English degree and editing minor, and doing freelance work has not only helped me gain experience in other areas besides what I do for my full-time job but has also at times (when I wanted to give the time to it) brought in significant additional income.
  • Do coaching or consulting. Similarly, if you have job experience or a skill that lends itself to coaching or consulting, put that skill to use! Popular areas for consulting include human resource (HR) consultant, public relations (PR) consultant, marketing consultant, business management consultant, and accounting consultant. Popular areas for coaching include financial coaching, job coaching, personal fitness coaching, and leadership coaching. Look for opportunities on indeed.com or your favorite job website.
  • Get a (second) job. If one spouse is available to get a second job in the evenings or on Saturday, for example, then this is another great potential way to earn additional income. And if you are a one-income family, or if one of you works only part-time, you might want to consider reentering the workforce or going full-time temporarily in order to save money more quickly.
  • Start a side hustle. If you would rather earn money without working another regular job, there are a lot of things you can do to earn a little extra income with a side hustle. Some ideas include starting your own small business where you turn a hobby into a money-maker, being a virtual assistant, or driving for Uber or Lyft. Learn how to start a side hustle and find out about many side hustles that you can explore.
  • Start a money-making blog. The potential for significant income is one of the reasons that I started this blog. If you love helping people and enjoy writing, being a blogger might be a great fit for you. In addition to great income potential (check out these amazing income reports of bloggers who make $10,000 to $100,000 or more per month!), there are many other benefits of being a blogger, such as being able to be your own boss and work on your own schedule. Learn how to start a blog for less than $5 a month.
  • Earn passive income. Some options for earning passive income are to create a product you have someone sell, write a book, create a money-making podcast or vlog, develop an online course, or participate in affiliate marketing. Read this article to learn more ideas for earning passive income.
  • Use rebate apps like Ibotta and Ebates. With rebate services such as Ebates and Ibotta, you can earn money by shopping for things and at places where you would shop anyway. With Ebates, you generally buy items through their website to save up to 40 percent on purchases. It is primarily an online service. Ibotta, on the other hand, is an app you use primarily after you make purchases at brick-and-mortar stores. Because of this, you can actually sign up for and use both apps to save on purchases. Sign up for a free Ebates account here, and sign up for a free Ibotta account here. You can literally sign up for both in just seconds and let the savings start stacking up.
  • Sell stuff on eBay or Amazon. If you have a good eye for a bargain, you can buy items at thrift stores or garage sales and sell them for a profit on eBayAmazonCraigslist, or your local online classifieds.
  • Sell your clothes to consignment shops. If you’re like most people, you probably have more clothes than you need. So use them to bring in some quick cash!
  • Have a garage sale. Declutter and earn money, all at the same time!

You can find even more ideas for increasing your income in this article.

And learn about side hustles you can do from home here.

 

7. Invest in tax-advantaged retirement accounts such as a traditional 401(k) or Roth 401(k) and traditional or Roth IRAs so that you can retire early.

One of the best things you can do to be able to retire early is to invest the money you put away for retirement in tax-advantaged accounts.

That is because federal income taxes take a big bite out of most people’s paychecks—anywhere from 10 percent to roughly 40 percent! If you are a younger worker (or your spouse is) and you make less money now than you likely will live on in retirement, then investing in a Roth 401(k) if available through your employer and also in a Roth IRA is a great way to go. (You can learn more about the differences between traditional retirement accounts and Roth retirement accounts here.)

On the other hand, if you are a high-income earner and plan to live on a lower percentage of your income during retirement (like many of the FIRE folks), then you will probably want to instead invest in traditional 401(k)s (or similar plans offered by your work) and traditional IRAs.

8. Invest wisely in good stock mutual funds to retire early.

Another important factor in being able to retire early is to choose wise investments. When it comes to choosing the funds to use to invest for retirement, you should look to good growth stock mutual funds that have been around for at least 5 years (and preferably 10 years or longer) so that you can see how they have performed during that time.

As you consider which mutual funds to invest in for your 401(k) or IRA, important factors to consider are the long-term rate of return, the expense ratio, the type of mutual fund (large cap, small cap, mid cap, and international), and the longevity of the current fund manager. If you would like to know how we choose the mutual funds we invest in for our Roth IRA, fill out the fields below, and I would be happy to share the information with you. No strings attached, and I don’t make any money or earn any kind of commission or affiliate income from sharing this information. It is simply the kind of information I really wish I had had when we first started investing for retirement over a decade ago.

9. Diversify your retirement portfolio.

To help ensure that you are able to retire early, it is important that you diversify your investment portfolio. Because stocks have historically outperformed bonds and many other kinds of investment options, I recommend that you invest in solid stock mutual funds for long-term financial success.

Though stocks have performed very well over time, no area of the stock market performs well all of the time, so it is important to have a well-diversified portfolio. The asset allocation that I recommend is investing 25 percent of your designated amount allotted for retirement investing in each of four mutual fund categories: large cap, mid cap, small cap, and international. You can learn more about this asset allocation model here.

 

10. Invest automatically in order to retire early.

One of the best ways to ensure that you invest the amount that you have planned to every month in order to retire early is by automating your finances as much as possible so that the money is transferred directly from your checking account to your Roth or traditional 401(k) or IRA before you have a chance to spend it on anything else. Many employers even have an automatic system set up where they can pull money directly from your paycheck and it gets invested in your retirement account before it even gets to your checking account.

This kind of automatic investing will help you keep on track to adequately fund your retirement and reach your early retirement goals. For more information about the power of automating your finances, I recommend the book The Automatic Millionaire by David Bach. It was one of the first personal finance books that I read many years ago, and it is still one of my favorites.

 

11. Regularly evaluate your progress, and adjust when needed.

Once you begin investing for retirement, though you can put your investing largely on autopilot (and you should so that you know it will happen regularly!) by taking advantage of automated investing, you should still review your retirement accounts at least quarterly to make sure your funds are performing as expected and to rebalance your investment portfolio as needed so that it stays in line with where you want it to be.

Sign up for a free Personal Capital account to be able to track how your investments are doing and also view your account history to see how your accounts and overall portfolio have done over time. Because you can link your checking and savings account, credit card accounts, and investment accounts, it’s a great way to see your overall financial picture. I love using this very helpful personal finance tool. Sign up for your free Personal Capital account here.

You can find more information on investing for retirement here.

 

Conclusion

If you want to retire early, you really can do it if you are willing to work hard and smart and to sacrifice some of your current wants in exchange for your (early) financial freedom. Regularly studying and learning more about how to retire early will help ensure that it happens.

By starting early, reducing your living expenses, investing a significant amount of your income, and choosing wise investments, you can retire years or even decades earlier than the average person.

If you are serious about retiring early then start investing as much as you can today! And let me know your progress—I would love to cheer you on!

 

What did you find most helpful in this article about how to retire early? Do you aspire for FIRE? What other tips do you have for how to retire early? Leave a comment below and let me know your thoughts!

 

how to retire early

Invitation to Share

Was there something in this article that inspired you to change something about your money? Are there ideas or tips that you feel could help others? Would you please take a minute to share this article via email or social media? I would love your help to share these principles of financial well-being. Thank you!

Join Our Facebook Group!

Join our new, closed Families for Financial Freedom Facebook group to get support and share ideas for how we can all improve our financial well-being by earning more, spending less, saving more, and investing more and reach our financial goals. You can do this! And we are here to help.

How to Pay for College: 14 Essential Tips to Afford College without Student Loans!

how to pay for college

How to Pay for College

I know that the question of how to pay for college can be a daunting one. There is no denying that college can be expensive! For the 2017–18 school year, the average cost for tuition and fees at a public university for state residents was just shy of $10,000. And for a private university, the average annual cost was just shy of $35,000. That is no small chunk of change! Fortunately, there are many things you can do that will help you to pay for college for your children or for yourself. In this article I will share 14 important tips on how to pay for college.

 

Tip: Save the image above to Pinterest so you can easily refer to this article on how to pay for college later!

How to Pay for College: 14 Simple Steps to Help You Pay for College without Student Loans!

One of my proudest moments as a parent of a newborn was the day a couple of months after our first daughter was born that we opened her 529 college savings account. Though a college degree in and of itself is no guarantee of a better, higher-paying job or of job security, if you choose a field of study that teaches marketable skills and that leads to a career that pays well, the investment that you will make in your children’s education will be well worth it.

That is because even though earning a college degree doesn’t always result in a good job, there is a direct correlation between higher education and generally better-paying jobs.

Receiving a good education of some kind, whether that is through college or other job training, really is important in being able to provide a comfortable living for your family. And so even though saving for our three children’s college educations since they were a couple of months old has meant that we haven’t had as much money available for other expenses, the trade-off has been well worth it to us.

Our children may grow up largely in second-hand clothes and with mostly preowned toys, but our goal is that they will never know the stress nor feel the burden of student loans. (Or of any debt at all, for that matter—except for maybe a reasonable mortgage.) Both my husband and I graduated with college degrees without any student loans, and that’s a legacy we intend to pass on to our children.

My husband and I were able to graduate without student loans by following many of the recommendations outlined below, and we didn’t even have college 529 savings plans or education savings accounts available to us. So if you follow the suggestions below, you’ll be that much farther ahead!

 

1. Start saving for college expenses when your children are young.

Perhaps the very best thing that can be of most benefit to you related to how to pay for college is to start saving for college as soon as possible.

Even though it may seem counterintuitive, one of the best ways to afford saving for your kids’ college is to start when they are young. I know that means that you will likely be fairly early in your career and won’t have as much disposable income as you should have later in life. But the earlier you start, the less you will have to save because of the amazing power of compound interest.

For example, if you start saving for your child right after he is born (which is what we did), then every $1 you invest could be worth about $8 by the time he or she begins college, and worth $10 or more when he or she is a junior in college. That’s because of the rule of 72. If you are able to earn a 12 percent average annual rate of return, which is doable if you invest in good stock mutual funds, then the money you invest could essentially double every six years (on average). So after 6 years each dollar would be worth two, after 12 years each original dollar would be worth four, and after 18 years each original dollar would be worth eight. That is the power of compound interest.

As is the case for virtually all goals that you are trying to save or invest for, the sooner you begin, the better. Because saving for your kids’ college should (ideally) be a long-term goal, where you save for 10 or 15 years or more, the best way to save for your children’s college education is to invest in mutual funds. And the sooner you begin to invest, the longer your money will have to grow.

There’s a saying among personal finance experts that the best time to start investing was 20 years ago. And the next best time to start investing is today.

If you start saving $100 a month, for example, toward your child’s college expenses the month after they are born and are able to earn an average 11 percent rate of return until they go to school at age 18 (though you won’t need all of the money when they turn 18, of course), you would have $67,127 available for their college expenses. If you’ll choose a low-cost state college or university, you can pay for much (or perhaps all!) of your child’s tuition just by doing that.

Money from tax-advantaged savings account funds (which we’ll talk about in the next section) can be used to pay for tuition, fees, books, computer equipment, internet service, and even room and board.

2. Decide which savings tool is best to pay for college.

Decide which savings tool is best.

In order to take advantage of tax-free growth on the money you save for your children’s college, you can use one of three savings methods: a Coverdell education savings account, a 529 college savings plan, or a Roth IRA.

  • Coverdell Education Savings Account. A Coverdell education savings account (or ESA) is a college savings account where you can save a maximum of $2,000 per year per child. The advantage of the ESA is that you have complete control over the funds that you choose to invest in. And when you open the ESA through a brokerage company such as Schwab, you have literally thousands of mutual fund accounts to choose from.

    Though we started investing in our state’s 529 college savings plan (known to be one of the best in the country) shortly after our children were born, we have now switched to ESAs (through Schwab) for our children because of the greater flexibility (and thus greater potential for better rates of return) that they offer. Schwab offers low fees and has been a great brokerage company for us; it’s where we have our Roth IRA, ESA, and general (taxable) investment accounts. 

  • The 529 College Savings Plan. If you are able to invest more than $2,000 a year into a college saving plan for each of your children, then the 529 plan might be the best option for you, if you want to keep things simple. The 529 college savings plans are administered by various states, but you don’t have to be a resident of the state whose college savings plan you choose to use. So, for example, you could use Utah’s college 529 plan (considered one of the best in the country), even though you live in New York. You can invest up to $14,000 per year per child without incurring the federal gift tax, or you can contribute a lump sum of $70,000 (or $140,000 for joint contributors), as long as you choose to spread the gift out evenly for the next five years. If you want the greater flexibility offered by an ESA but want to contribute more than $2,000 per year, one option is to put $2,000 in an ESA and then contribute the rest that you intend to invest in a 529 plan.
  • Roth IRA. If you are hesitant to invest money (or all of the money) for your children’s college savings in a dedicated education savings account because you’re afraid that they might not use all of the money that you invest in these plans or accounts and you don’t want to have to pay the 10 percent penalty to use the money if they don’t, then you can choose to invest instead in Roth IRAs for college savings, and the tax advantages are the same as investing in one of the two options mentioned above. However, the obvious disadvantage of this method of saving for college is that if you use the money for college, you won’t have it available to you for your own retirement expenses. But if you know that you will have ample money saved for retirement in other accounts, then this could be a good option for you. Or you could choose to save some of the money in an ESA or 529 and some in a Roth IRA.

Check out these related articles:

 

3. Decide how much you intend to contribute to save for your kids’ college.

In order to help you decide how much money to invest for your children’s education, an important factor to consider is how much of their college expenses you intend to cover. Some parents choose to pay 100 percent of their children’s college education, some choose to contribute 50 percent, and some contribute less.

Because we want our children to feel ownership of their education and because we hope that they will take their education more seriously if they feel some of the weight of having to pay for it, we’re intending to pay 50 percent of their college expenses. Or, rather, we’re intending to pay 50 percent of the average cost of tuition and fees for the state colleges in our state (though we will likely help some with housing and food and so forth as well). We hope that this will encourage our children to choose their school carefully and to not choose the most expensive college in the state.

If you can afford to pay for all of your children’s educational expenses and if they have already shown a great work ethic and other character traits you want them to have, then paying all of their college expenses may not be a bad idea. However, if paying all, most, or even half of your children’s college education will put your own financial security or retirement at risk, then you should look at contributing less or increasing your income or assets, or both.

 

4. Decide which mutual funds to invest in to help you pay for college.

As long as you have a timeframe of at least five years and you have a decent risk tolerance, you should invest in mutual funds when saving for your children’s college, in order to benefit from the greater growth that these funds historically provide (over bond funds and savings accounts and CDs, for example). If your child or children will be entering college in less than five years, then your best bet would be to use a regular savings account (or a money market account) or a CD.

But assuming you have at least five years before you will use the money, choose growth stock mutual funds that have been around for preferably 10 years or more and that have good track records. When deciding which mutual funds to invest in for your children’ ESA or 529, important factors to consider are the long-term rate of return, the expense ratio, the type of mutual fund (large cap, small cap, mid cap, and international), and the longevity of the current fund manager.

 


5. Make automatic monthly contributions to your children’s college savings funds.

The best way to ensure that you reach your goal of saving x amount for your kids’ college education is if you make automatic monthly contributions to your children’s ESA or 529 accounts. With the Schwab education savings accounts, for example, this is easy to set up.

Pro saving tip: Read this article for more information on how to automate your finances in order to save for your children’s college educations, invest for retirement, pay your bills, save for emergencies, and more.

 

6. Look for ways to increase your income to be able to save more money for your kids’ college educations.

If you want to be able to save more toward your children’s college educations, one of the best solutions might be to work on increasing your income. For more information on how to earn more money, sign up below for my free 10-day Earn More Money, Change Your Life challenge so you can start working on increasing your income today!

 

7. Expect your children to work during high school to help pay for their college.

Set the expectation that your children will work during high school during summer vacation and possibly after school as well to help pay for their college education. My dad owned his own company while I was growing up, and I worked in his office from the time I was a freshman in high school till I was a junior in college. I know that the opportunity to work in the various roles that I did taught me a lot about not only hard work but valuable skills such as communication and interpersonal skills as well, in addition to word processing and other office skills.

 

8. Lead your children to choose an affordable school.

One of the most important things you can do when saving for your kids’ college is to guide them in this very important decision of what school to choose. Even though most college freshmen are technically adults, they don’t have the experience or financial wisdom, generally speaking, to always make good decisions. They need your help, as their parents, to make wise and financially prudent decisions during this very important time of transition in their lives.

And because you are helping to foot the bill (or might be footing the entire bill) for their college education, you have the right—and the obligation—to help your children to make good financial (and other) decisions that they won’t regret down the road.

Long before you send them off to college, sit down with your high schooler and explain to them very clearly that you are willing to contribute x amount to their college education each year, but for you to be willing to pay that amount, there are some conditions that they have to meet. Here are some examples:

  • They will attend an in-state public school. Unless you have a very inexpensive private school in your state (with a price comparable to the state schools) or your child has a scholarship to a private or Ivy League school or something like that, set up the expectation now that your children will attend a public college.
  • They will be expected to graduate in four years (with a bachelor degree) and attend full time. If they take longer than that because they’re kind of loafing around, taking only 10 or 12 credits a semester, then they can foot the rest of the bill themselves.
  • They will be expected to maintain a certain GPA. I recommend at least a 3.5, but you might find a 3.0 acceptable.
  • They will be expected to work part-time (and full-time during the summer, unless they’re taking classes). Statistically, college students who work part-time earn higher grades than those who don’t. And when you think about it, it makes sense. By working college students further develop important skills like time management and a good work ethic.
  • They will live by the moral guidelines you set. That means if you didn’t allow sleepovers by the opposite sex at your home, for example, you can set the same expectation for your child while he or she is away at college. And don’t feel bad about doing so!

When you hold the purse strings, you wield a lot of power. As long as you have built a strong relationship with your children already and you don’t abuse the power you have, this can be a great tool to help bring about the behaviors (and therefore the continued character building) that you want in your college-aged kids.

 

9. Teach your children how to budget and how to keep expenses low.

Ideally, your children will have learned from a fairly young age how to budget. However, if they do not yet know how to create and live by a budget, teach them before they leave for college. Also teach them basic principles of intentional spending. This means that they know how to differentiate between needs and wants, they know how to spend less than they earn, and they know how to save for future planned and unplanned expenses (such as emergencies) and for larger purchases.

 

10. Seek scholarships.

One of your child’s jobs during high school and college should be to seek scholarships. By working hard in high school and maintaining excellent grades, I was able to receive full-tuition academic scholarships (and sometimes additional scholarships for books and fees) throughout my time at college. If your child is gifted at sports or in another area, he or she should pursue scholarships that way. And there are also many smaller, little-known scholarships that they can seek.

If your child applies for 100 small scholarships and gets awarded only 10 of them, for example, but they are worth an average of $1,000 each, that’s an extra $10,000 he or she doesn’t have to pay out of pocket. That’s worth a little time and effort, for sure! Check out this article written by one of my favorite finance gurus, Clark Howard, for ideas on where to find college scholarships.

 

11. Seek grants.

If your children qualify for Pell grants or other grants, they should apply for them. Because I had full tuition covered I never even thought to apply for grants, but I kind of wish that I had, and then I could have used the money for other college-related expenses such as housing, computer equipment, and more. You can find information about the Free Application for Federal Student Aid (FAFSA) here. For information about other grants, you can review this list of 101 college grants and this online database of college grants.

 

12. Teach your kids that they will work while they’re in college.

As I mentioned above, studies have actually shown that those who work while at college earn better grades. Having your children work while they’re in school will help ensure they avoid student loans, will teach them valuable skills, and will help them to take their education more seriously (and also help keep them out of trouble by having too much free time on their hands :)).

 

13. Teach your children that student loans aren’t an option.

According to a recent study, the average college student graduated in 2016 with $37,000 in student loans! There’s a good chance that they won’t even make that much a year at their first job out of college! Save your children the potentially huge burden of student loans by teaching them that they (and you) will pay for college in other ways and by making education choices that you can collectively afford.

When I was at school I never even had the idea to take out student loans (fortunately!), and we didn’t consider them for my husband, either. And since we hadn’t really been taught by anyone not to use student loans, I’m so very glad that we didn’t so that we didn’t have that financial burden following us for years after college.

I had academic scholarships to pay for tuition, but I paid all other expenses out of pocket from my part-time jobs, and we cash-flowed my husband’s schooling without any scholarships or grants by my working full-time and his working part-time.

 

 

14. Expect your children to graduate in four years.

If you intend to pay much or most of the cost for your children’s college education, let them know that they will finish school in four years, or the rest is on them. On the other hand, if they will be paying much of the cost of college themselves, then going to school part time and working part time or even full time may be their best option. Because even if they graduate in five or six years instead of four, the amount of money and stress they will save by not acquiring student loans will be worth it.

And when you look at a working lifetime of 40 (or even more) years, one or two fewer years really isn’t that big of a deal in the grand scheme of things. What will have a far, far greater impact on their ability to build wealth is that you teach them to spend less than they earn (live within their means), to save, and to invest.

When you steer your children to graduate college without student loans, you can help set them on a path of a life free of consumer debt. #debtfreeforlife

 

Conclusion

A college education really can be affordable if you follow the guidelines discussed above. With adequate planning and preparation, you can help your children to graduate from college debt free. As is the case with so many things, the sooner you get started saving for your kids’ college, the better, in order to help them accomplish that objective.

By starting to save early, consistently contributing to a college savings fund, choosing good mutual funds to invest in, guiding your child to select an affordable school, and allowing him or her the opportunity to work to help pay for college, you can help your child to obtain a great college education without any student loans and help him or her learn essential financial and other lessons along the way.

Sign up for the free Personal Capital app to be able to track how your college savings accounts and other investments are doing and also view your account history to see how your accounts and overall portfolio have done over time. It’s a very helpful tool that I use regularly! Sign up for your free Personal Capital account here.

For more on this topic, read this article on how to save for kids’ college.

Invitation to Share

Was there something in this article that inspired you to change something about your money? Are there ideas or tips that you feel could help others? Would you please take a minute to share this article via email or social media? I would love your help to share these principles of financial well-being. Thank you!

Join Our Facebook Group!

Join our new, closed Families for Financial Freedom Facebook group to get support and share ideas for how we can all improve our financial well-being by earning more, spending less, saving more, and investing more and reach our financial goals. You can do this! And we are here to help.