Now, financial freedom isn't only being debt free. This means that you have reached a comfort level with your income and you have learned how to live within boundaries. Finally you have the money to accomplish goals and make wise spending choices. Let me be clear, the first step to financial freedom is getting debt relief.



By getting out of debt this is the first step toward your goal of financial freedom. Start off by getting your credit cards and loans all in order. How much debt do you owe? List them in order by interest rates and balances.

Set a goal. You should want to pay off your personal loans and credit cards first. Auto loans would come next. If you have student loans and they carry a low interest rate, then they can have a lower priority. What is a good debt? If you are a homeowner, your mortgage is. It is not necessarily required to pay off early to gain any sort of freedom, unless you have paid off everything else first.

There are two possible forms of debt relief, debt settlement or debt consolidation. Through debt settlement you would work with a company that would negotiate with your creditors. They will get your debts settled to a smaller percentage than what you owe, sometimes 30-40%! This is generally for people who are more than 30 days behind on payments and have signs of financial hardships.

With debt consolidation, this usually works if you are not behind on your payments. You would get a loan to put all of your debt into one payment a month. That would pay off your lenders and leave you responsible to just one account. It is just like it sounds, consolidating your debt into one easy place.

The next step towards financial freedom is getting control of your expenses. This plays a big part in paying down your debt. Keep in mind that your expenses should be at least 20% lower than your monthly income. This ratio allows you to be prepared for any unforeseen financial surprises or personal problems that can arise. This also helps you to save and invest any money towards your future.

If you feel as if you are struggling and living paycheck to paycheck, it's time to get your expenses under control. Start off by creating a budget. Figure out exactly where you are spending all of your hard earned money each month.

Next, decide what it is that you can truly do without. Sometimes you have to cut things out of your life, it doesn't sound that fun but you would be amazed at the money you can save. Simply by washing your own car, brewing your own coffee, painting your own nails or even clipping coupons for groceries these little changes can help you to save money!

Finally, once you get your debts under control, paid down and finally paid in full you can take a huge sigh. That is what financial freedom is. Look towards your future and practice the principles you have learned. Apply them and you will be making positive changes. Consider these three important areas: retirement, emergencies and investments. You can do it. It requires you to be cautious in your spending (no now that you are financially free you cannot go back to your old ways) and stay focused.

If possible start putting some money into a retirement fund, and you will watch your account grow with the compounded interest. It wouldn't hurt to open an emergency savings fund now also. It would be a good idea to have enough savings in that account to help you in the event of an emergency, three month's worth is ideal. Next step is investing in the stock market. Putting money in index funds is a good way to start out.

When you are able to finally enjoy your financial freedom you won't miss having that every day stress hanging on! Imagine not having to worry about how you will pay a bill or if you have enough to take a vacation. Once you are financially free you will have a clear mind and be well educated in how to stay in that mindset forever!