7 Steps to Freedom From Debt

person holding up a picture locking at it

Step 1: Understanding Your Financial Picture

Your money is a huge part of your life. It can determine what you can do and where you can go, and your freedom from debt. Learning how to manage your money the right way is an essential step toward taking control of your life. Financial freedom is something many desire for themselves, yet so few know what’s necessary to achieve this status.

The thing is — it’s not that hard. It only becomes an issue when you try to do it without a plan.

Before moving forward, you first need to decide what Financial Freedom means to you. Financial freedom means different things to many people. Still, for the majority, financial freedom means covering your expenses (which includes all the things you need and want) without working.

Sounds nice, doesn’t it? If that sounds good, take a minute and write down what financial freedom means to you. Keep reading as we embark on a 7-step process to help you get on the coveted path to financial freedom.

Understanding Your Current Financial Picture

In this step, we will talk about how to better understand your current financial picture. Understanding where you currently stand can help you identify things that may be keeping you from your desired goal of being financially free. This is also where you create new financial goals that align with your goals.

To get a better understanding of your finances as they currently stand, take a look at these three things:

1) Your net worth,

2) Your current financial habits

3) Your current financial goals.

For example, Mike &Cindy have a goal to retire in 10 years at fifty-five. They currently have $65,000 saved and contribute $100 per month to their retirement fund. To fill the picture in, add that they have $150,000 remaining on their mortgage and a $25,000 car loan.

Of course, this is just an example. Suppose you sit down and do the math and compare Mike & Cindy’s modest income of $50,000. In this case, this situation might not precisely spell financial freedom within ten years.

Use this scenario as a guide to help you paint your own picture.

Determine your current financial status and whether or not your spending and savings goals are helping you get closer to your ultimate goal. Your net worth will be the best number to help you figure out how close you are to your goal of financial freedom. If the number is negative, you have more debt than you do assets.

If your net worth is positive, that’s a start, but it still doesn’t mean you’re closer to your goal of early retirement if your savings goals aren’t aggressive enough.

So, figure out your net worth first. Once you know this number, you can evaluate your current spending habits to see where you need to make adjustments. Studies​​​​​ show that many Americans are spending 103% of their income. That’s 3% more than they generally earn. For most, 45% of income goes toward debt, 25% goes toward taxes, and 33% goes toward other spending. That leaves nothing for saving and giving.

If these numbers describe you, adjustments to your current spending patterns are inevitable. This could make a difference when meeting the financial goals, you’ll create to obtain financial freedom. Overall, you want to be able to answer the following questions:

How much am I saving?

How much am I giving?

How much of my spending benefits me long-term?

Where is my money going?

Do I have any money left at the end of the month?

Where can I reduce spending?

Once you’ve asked yourself these questions and understand your net worth, you will know where you stand. At this point, you’ll be able to create more focused financial goals moving forward.

Creating Financial Goals

Now that you know your numbers, where do you stand? Do you have debt? If so, your new financial goals MUST include debt repayment. Lack of savings? You will need to include these types of goals as well. 

Basically, wherever you currently stand financially, you need to determine whether it’s good enough to get you to financial freedom. If not, your new goals need to be goals that will move you in that direction.

Your goals may be pretty simple once you’ve evaluated your financial state. You might want to pay off your debt or save $15,000 for an emergency fund. Whatever your goals are, you need to write them down, and you need to make sure they’re specific.

Wanting to pay off all your debt isn’t enough. You need to know how much debt you will need to pay each month and give yourself a deadline. After all, you want to achieve financial freedom sooner than later, right? So, make sure all of your goals have a specific amount, action, and date.

— let’s create a goal!

Obtaining Freedom From Debt

Once you’ve defined financial freedom and assessed your current financial situation, you’re ready to move forward.

Step 2: Create a Solid Budget

You don’t have to reach the end of the month wondering where your money went. Budgeting is the process of creating a plan to spend your money. And if you’re not good at budgeting yet, that’s okay! It takes a little time.

Budgeting is essential to proper money management. Although some are initially turned off by the term budget, those who’ve effectively mastered this task know how crucial budgeting is for one who seeks financial independence.

The most common reasons budgeting may not work for some doesn’t have anything to do with the Budget itself. It’s due to limiting beliefs and excuses. Some feel they don’t have enough money to Budget, associate budgeting with restrictions, or are too poor to have a budget. Those are just a few examples of how one’s thoughts can limit their ability to master this critical concept.

Budgeting can help you save money, afford the things you want, give to those in need, and build wealth simultaneously. You’ll learn to make the most of your money with a budget instead of staying stuck in a paycheck-to-paycheck cycle.

There are multiple budgeting styles to choose from, so if budgeting hasn’t worked for you in the past, you haven’t found the proper budget. There is no one size fits all solution when it comes to budgeting. It is essential to pick the budget style that works for you.

Choosing a Budgeting Style

While many budgets are similar, not all budgets are created equal. I recommend something called the Zero-Based Budget. I believe this budget style will work for the majority. 

Zero Based Budgeting

Zero-based budgeting isn’t as hard as it may sound, but it requires you to keep track of every dollar you spend. — “I don’t know where all my money went”? At the end of the month, does this sound like you? If so, this style of budgeting is perfect for you.

What you do is give an assignment for every dollar you earn. No money comes in without you telling it where to go. When you receive your take-home pay, you create a budget and Budget down to zero dollars. For example, let’s say your take-home pay was $2,000 and you budgeted for all of your bills, and you paid on a few credit cards. After you’re finished, you still have $100 leftover.

If you have money left over, you haven’t completed your Budget according to this budgeting style. To complete your Budget, give an assignment to the remaining $100 you have after meeting all of your wants and obligations. For instance, you can put $50 towards your emergency fund, $25 towards your future insurance payment, and the remaining $25 towards your future car taxes.

Even though you’ve met your needs and obligations, include future expenses into your Budget. If you don’t, you run the risk of not having enough money to cover things like taxes, registration, and premiums in the future.

Get your Zero-Based budget form here.

Before moving forward, let’s look at a few other budgeting styles you can use to manage your money.

50/30/20 Budget

With a 50/30/20 budget, your Budget is split up by percentages to cover three main categories — necessities, life, savings/debt. The amount you allocate depends on your take-home pay, with the goal to spend no more than is allowed for defined budget categories. 

50 percent – this percentage of the Budget would cover necessities. These expenses would be things like housing, transportation, or utilities. You would include any associated costs as well.

There will be car taxes, registration, and insurance if you have a car. The same applies to housing.

30 percent – this percentage of the Budget would cover living expenses. According to this budgeting style, living expenses would include entertainment, groceries, shopping, dining out, cable, etc. Many items listed in this category would be considered wants.

20 percent – would be allocated towards your debt and any savings goals you have. It may not sound fair to share your savings with debt repayment, but this budgeting style will give you an extra incentive to pay down your debt to keep more of your earnings.

Envelope (Or Cash) Budgeting

This style of budgeting is as easy as it sounds. There are no percentages or mathematical equations involved. You simply use cash. The term envelope comes into play for those who need a little guidance when spending their money.

If you struggle with overspending in specific categories, using the envelope system would benefit you. You put the amount of cash in your envelope that your Budget says you should spend for the month. Once it’s gone, it’s gone.

Of course, some expenses cannot be paid in cash, but this system can be tweaked to your liking. You can use some money for specific categories like groceries, entertainment, shopping, and dining out. This works well for individuals saddled with debt and who need to stick to their debt repayment plan.

Bi-Weekly Budgeting

If you get paid bi-weekly, you may find it challenging to figure out how to manage to pay your bills. The secret to overcoming this problem is to set aside half of a payment for every bill each pay period, which is essentially known as creating a bi-weekly budget.

You would divide all the bills you pay by two. Set aside your half-payments into a separate account or keep it separate from your spending money.  

To make this budgeting style more efficient, arrange to have half of your bills due during the first half of the month and the others due during the second half of the month. This will eliminate your worries of having more bills than cash on hand at any given time during the month.

Creating Your Budget

Essential Components of Your Budget

Your Budget is made up of two major components — income and expenses. The main takeaway should be that your expenses should never exceed your monthly income. Remember, this is vital in making your Budget work for you!

Here are common types of income sources:

Work salary

Part-time jobs

Rental properties


Passive income streams


Freelance or side-hustle income

10 Common Expenses:

Vehicle: You should include all car expenses such as your monthly car payment, petrol, insurance, tax road, and maintenance expenses.

Transport: If you use public transportation, include this category in your expenses.

Food: This category would Include all groceries, including groceries you may pick up at drugstores and non-traditional grocery stores. This doesn’t include dining out. You should include a dining-out category to manage your expenses if you regularly eat out.

Clothes: This category includes all clothing, shoes, accessories, etc., purchased for your family.

Home essentials: Include house cleaning products, shower products, etc. Anything you use in your daily home life.

Communications: This would include internet and cell phone costs.

Entertainment: Include dinners, cinema, going out for drinks, parties, gifts, etc.

Traveling: Include this category if you love traveling. Budget for the expense and keep the money in a separate account until ready for use.

Debt Repayment: This category would include all of your other non-mortgage and non-automobile debt like credit card payments, student loans, personal loans, etc.

Savings: Include emergency, retirement, and other long-term savings goals in this category.

Now that we’ve discussed the more common budgeting styles and the basic components of a Budget, it’s time to create one for yourself. But first, let’s make sure we’re clear on one major thing — you need to differentiate between wants and needs. This will make creating your Budget a lot easier.

Identify Your Wants vs. Needs

Go ahead and make a list of your expenses and categorize them as wants or needs.  

Your needs include:

Housing (rent or mortgage)

Utilities (water, sewer, trash, etc.).

Food (groceries only – no dining out)

Personal products (shampoos, household items)


Anything else on your list would fall under wants.

Reduce Your Wants

Review your list and look at the wants. These are items that you might be able to reduce or eliminate from your Budget but let me clear the air. This is where budgeting seems to get a bad rep, and I think it’s essential to address this.

Budgeting shouldn’t be synonymous with elimination. When you think about budgeting, think of it as having choices. You’re getting to choose the things that matter most to you. If you’re saddled with debt, here is where you are allowed to make a choice to eliminate some of your wants so you can fulfill a genuine desire — becoming debt-free.

Some expenses you may choose to reduce or eliminate include:



Cell phone

Dinners out




While you may not choose to change all of these, eliminating or reducing things like dining out or subscriptions could make all the difference in the world. Sometimes the small choices add up to significant savings to help you achieve financial freedom quicker.

Making Your Budget Work

Regardless of which budgeting style you choose, here are some tips to make your Budget work for you:

Remember, the sole purpose of your Budget is to ensure that your expenses don’t exceed your income.

Always include your regular and irregular bills in your Budget. If you have quarterly bills or yearly premiums, take the total cost and divide them by twelve to account for your Budget.

Keep your spending money (money you typically use to purchase wants) separate from your funds for necessary expenses. It’s easier to scale back expenses like groceries than figure out how to pay your mortgage when all of your paycheck is gone.

Consider your savings a necessity. You will need funds in the event of a job loss. If you don’t have an emergency fund, saving for one shouldn’t be optional.

Track your expenses every day. Money easily slips through the cracks when we are not paying attention. Tracking your expenses is easy to do with free tools like Personal Capital. Learn more about this tool at PersonalCapital.com.

Once you’ve created your Budget using this information as a guide, you’re ready to move to step three – your emergency fund.

You don’t have to reach the end of the month wondering where your money went. Budgeting is the process of creating a plan to spend your money. And if you’re not good at budgeting yet, that’s okay! It takes a little time.

emergency room sign

Step 3: Building an Emergency Fund

Our futures are uncertain, and it’s best to be prepared financially for whatever life throws your way. 

Life happens, and no matter how much we want to be in control — the unexpected can happen.

Things like job loss, medical costs, car repair, or natural disasters can cause your finances to spiral out of control. In some instances, you could fall further into debt. Without an emergency fund, you are unequipped to handle these life mishaps.

If you’re already deep in debt, the last thing you want to do is dig a deeper hole. There’s no better way to get out of debt and stay out than with an emergency fund.

More importantly, an emergency fund is essential if you live paycheck to paycheck. It will keep you out of debt and give you peace of mind when life throws you lemons.

Starting an emergency fund is a priority. Many people are under the impression that you need to wait to save money if you’re still in debt; that’s not always the smartest move. It is crucial to be prepared for unforeseen events.

Set A Savings Goal

If you search “How much should I have in my savings account?” you will find differing answers. Truthfully, there is no right or wrong answer.

How much you save in your emergency fund is entirely up to you. Your circumstances and vision for your life will dictate your savings goals.

However, since many of you prefer a little guidance, I’d recommend starting with a savings goal of $1,000. Even if you’re in debt, this is the minimum amount you should have in your emergency fund because it covers a multitude of financial setbacks.

Ultimately, you want to save an amount that makes you feel comfortable. If you are single and feel secure with having a minimum of $500 — that should be your savings goal. You should never set your emergency fund goal based on someone else’s recommendation. Doing so may cause discouragement when you don’t meet your goal.

Most importantly, it’s best to choose a minimum that will allow you to achieve your initial goal. Once you’ve reached it, you’ll feel more secure, and you can focus on increasing the amount saved if you don’t have other impending financial goals.

Choose The Right Savings Account

When selecting a savings account for your emergency fund, I recommend an online savings account, and here’s why:

1. You can transfer as much as you want into your free Savings Account. You can transfer $5 to your new savings account just as quickly as $5,000.

2. It reduces the temptation to move money from your emergency fund to your checking account and use your debit card to make unnecessary purchases.

I highly recommend ?????????? savings account. You want your emergency fund to be easily accessible. A ???????? savings account offers a competitive interest rate. 

I have it attached to my checking account for easy access via a quick transfer on the computer. If you sign up for an account with my link, you’ll get a $25 bonus.

Other Recommended Options:

Digit is another excellent place to open an account and start funding it. It takes just a few minutes to open and connects to your checking account. Get more info here!

Synchrony Bank for an online-only savings account. They offer a 1.30% annual percentage yield (higher than most savings accounts). Get more info here!

If online savings just isn’t for you, that’s okay. Just make sure to open one at a different institution than your regular checking account. Here are a few things you should look out for:

Make sure it’s FDIC-insured. FDIC stands for “The Federal Deposit Insurance Corporation.” FDIC is a Government insurer that provides insured guarantees on your deposits at member banks–currently up to $250,000 per depositor per bank.

●It offers the highest interest rate available to you.

●No minimum balance requirement.

●It has no fees.

Automate Your Savings

Your Budget should tell you how much money you can set aside each month. Using this information, you can set aside a day to move your savings from your checking to your savings account. However, I highly recommend automating your savings.

Automating your savings makes saving money easy and less stressful. The use of automation was beneficial to me when I was building my emergency fund. Now that I have a system in place, I save $125 every month without thinking about it.

You’ll be pleasantly surprised to see how small amounts grow over time if you save automatically. For example, saving $4 per day in your emergency savings account adds $1,460 saved in 12 months. Remember, something is better than nothing. You’re setting up a plan that leads to financial success by automating your savings.

Save 6 Months of Living Expenses

Once you hit your initial emergency savings goal, continue saving until you can cover six months’ worth of your expenses. Look at your budget and determine the bare minimum for your basic needs each month. Once you have that number, multiply it by six.

I know the number may seem unreachable, but I assure you it’s not. The plan to reach this goal is the same as your plan to get your initial savings goal — automation. 

Set a savings goal to reach one month of expenses and automate the amount you need to achieve that goal. Rinse and repeat until you get six months of expenses.

The whole purpose of an emergency fund is to take care of you and your loved ones when things go wrong. You could get laid off from your job, experience a death in the family, or have a medical emergency. No one wants to think about things like this happening to them, but unfortunately, they do.

When you prepare for these life events beforehand, you free yourself from unnecessary financial worries. You can focus on the matter at hand instead of worrying about how to pay your bills. If you haven’t created a plan for dealing with emergencies, use these steps to create your savings plan today.

 Keep It Going!

Once you begin saving, it becomes easier. When you reach your initial emergency savings goals, you’ll be motivated to set slightly larger goals. Remember, I recommend a minimum of $1,000 for your emergency savings, but by no means should you stop there.

Most people aim to save six to twelve months’ worth of expenses (not income) because it ensures their financial security. Your ultimate destination should be 6 to 12 months’ worth of expenses. 

There will be setbacks and tests along the way, but don’t allow these things to deter you from becoming financially secure. Keep going despite those setbacks, and you WILL reach your goal.

Step 4: Debt Repayment Plan

Avoid Debt Like the Plague. Debt is the biggest hindrance to your financial well-being. It leaves you vulnerable to risk, prevents your ability to save, and limits your freedom and options for the future.

Making minimum payments because you don’t know where to start is one of the worst mistakes you can make in attempting to eliminate your debt.

If you feel overwhelmed by your debt and find yourself only making the minimum payments — then it’s time to focus on creating your debt payoff plan. Creating a plan to pay off your debt is essential to living debt-free.

Figuring out the best way to pay off your debt can seem overwhelming at first, especially with all the debt consolidation and repayment schemes. A good debt payoff plan should contain the following information:

  1. The debt you have to pay.
  2. In the order, you need to pay them.
  3. How much do you need to pay to eliminate them?

With the strategies mentioned above, your plan will not only be realistic to your lifestyle; it will fit within your personal budget.

Make a Debt List

To create your plan, you need to list all the debts you owe and the remaining balance due. There are a couple of ways you can do this. If you don’t pay much attention to your debt, get a copy of your free credit score here.

Your credit report will provide you with your debt obligations from companies that report to all three major credit bureaus. *It should be noted that your credit report might not list all your accounts.

To ensure you’ve accounted for everything, go through past statements from your creditors.

Use the FREE Debt List worksheet to write down the following:

1) who you owe,

2) the amount you owe,

3) the minimum payment for each debt obligation,

4) the interest rate (list from highest to lowest), and

5) your monthly due date.

Set Your Debt Priorities

In this step, you need to determine what debt you want to focus on according to your priorities. You may decide to only focus on your “bad” debt.

Bad debt includes credit cards, personal loans, and recreational vehicles. This type of debt will most likely have the highest interest rates.

There are a couple of different methods to tackle your debt. Let’s go over these two methods.

Debt Snowball Method

The debt snowball method is a debt reduction strategy. You pay off debts from smallest to largest regardless of the interest rate. Once an account is paid off, that payment is added to the following account. 

With the debt snowball method, you start with the smallest balances first. You pay off those smallest balances faster, which will motivate you to move forward. Plus, you will have the extra cash flow to contribute towards larger debts with all your smaller debts gone.


Debt Avalanche Method

With the debt avalanche method, you pay off the accounts with the highest interest rate to the lowest interest rate. You attack the higher interest debt first, regardless of the balance.  

This method makes more sense mathematically because you will pay less interest overall. This method reduces the interest cost, thus paying off your debt faster.

Best Method?

So now that I have provided you with the two most common methods to prioritize and pay off your debt, you need to pick one.

The best way to pay down debt is by using the Snowball Method. I believe that eliminating the smaller debts will motivate you as you work towards tackling your larger debt.

The truth is, whichever method you choose, making the decision is really the most important thing. You have to select the method that will help you stick to the task of becoming debt-free.

So, if optimizing your payments and saving interest is a priority, use the Avalanche Method. If you think paying off your smaller debts and getting those quick wins will keep you motivated, use the Snowball method.

Even though there is a strong argument for both methods, you always have to do what’s best for you. In this case, there really is no right or wrong decision as long as you’re committed to achieving debt freedom.

Initiate Your Debt Repayment Plan

Now that you know how much you can pay towards your debt, it’s time to implement the plan. Review the Budget you came up with in step #2 and find the number you came up with to apply to your outstanding debt.

Check out our debt snowball And avalanche calculator that generates an easy-to-follow payment plan.

This online calculator helps you evaluate various strategies for paying off your debt. When one debt is paid off, the payment amount generally applied to that debt is now available against another debt. You can also add an additional monthly payment to accelerate the payoff.

You can generate an easy-to-follow payment plan to help you eliminate your debt.

Just plug in the basic debt information you compiled, and we will take care of the rest.

This free tool will let you create a debt payment plan using the powerful Debt Snowball or Debt Avalanche repayment methods. See how it works.

It’s never enough to just put your plan into action. You have to review your debt payoff plan regularly. 

It can take years to pay off larger debts, so make sure your plan changes with your circumstances is essential. Update your budget and debt repayment plan anytime your financial situation changes (for example, a pay increase).

Don’t get discouraged if you make mistakes or run into setbacks. The most important thing you can do is pick yourself up and continue with your plan as soon as possible.

You will develop positive financial habits if you complete these financial steps consistently. Debt can be overwhelming but having a plan will relieve some stress and give you hope. Take the first step in tackling your debt and create a plan to live debt-free.

Other Tips to Consider

Consider Refinancing Your Debt

Using the Debt Snowball method is a quick and effective method when paying off debt. However, sometimes it makes sense to refinance your debt when you have multiple high-interest credit cards.

If you pay 12-29% interest on multiple cards, refinancing your debt to a lower rate makes sense. For instance, Avant will let people refinance up to $40,000, and rates start at 5.99% APR.

Increase Your Income

This is an essential step that a lot of people overlook. You need to find as many ways as possible to make extra money on the side to pay off your debt quickly. There are many other ways to increase the money you bring in.

Boost Emergency Fund and Invest for the future

When you have eliminated your debt, there will be money available for saving and investing. We provide you with the basics of saving and investing so that you can build wealth over time.

Step 5: Investing Your Money for The Future

To build wealth, you need to develop good habits. A few critical practices of the wealthy include regularly saving and investing their income, an essential wealth-building tool. If most of your income is going towards making regular debt payments, you can’t use it for wealth building.

If you’re still in debt, I will encourage you to postpone investing for now. A fully-funded emergency fund and becoming debt-free would serve you better at the moment as it is a solid foundation for building wealth.

If you’re debt-free, now is the time to start thinking about investing. Many people postpone investing because they believe they need a lot of money to get started, which isn’t true. You can start investing with as little as $5 per month and the best time to start is today.

Investing can be a scary, stressful, and overwhelming topic. If you are like many people out there, you may not know how to start investing your money. My goal is to make it easier on you by providing the basics so you can begin investing and building your retirement fund as soon as possible.

Investing Basics

Once you’ve completed STEPS 1-4, you are ready for Step 5 — investing for the future. There are many ways you can invest. Your investment portfolio could consist of stocks, mutual funds, bonds, real estate, art, vintage cars, etc.

However, we will focus on investments that you can choose in a brokerage account or retirement plan. These types of investments generally include the following:

Mutual funds and ETFs

Mutual funds and ETFs (also known as exchange-traded funds) allow for the pooling of funds from several investors. The money is then invested into different stocks, bonds, and other types of investments. For example, the S&P 500 EFT invests in all the 500 stocks that make up the entire index.

Stocks: Stocks (also known as equities) essentially gives you partial ownership of one or more companies. If the company performs well, the stock rises and increases in value. While they are more volatile than other types of investments we’ll discuss, they do have the potential to bring in higher returns in some cases. 

Bonds: Bonds (or fixed-income investments) allow investors to maintain a consistent income stream. Bond values fluctuate with interest rates, but they are less volatile than stocks. However, they come with a much lower return than stocks.

Cash: Cash includes investments like CDs, money market accounts, and savings accounts. These types of investments have the lowest return potential. Still, they are much less risky than the other investments discussed.

Should I invest actively or passively?

There are two investing methods — Active and Passive.

Active investment allows investors to pick individual stocks and bonds or purchase mutual funds actively managed by professionals. In other words, an active investor’s goal is to beat the market.

Passive investing involves purchasing investments through funds that track indexes. The goal is to match the market’s performance. For example, an S&P 500 ETF (mentioned in the previous section) is a passive investment.

You need to decide how much time you want to spend investing. If you have the time and desire to research individual stocks — you may prefer active investing.

Passive investing may be a better choice for those who lack the time and aren’t motivated to study the stock market.

Research and Learn

It’s good to know what you’re investing in before investing your money in the stock market and other investments. It will benefit you to read various investment-related tips and research the different options available to you in the long run.

How you invest your money depends on your risk tolerance. You will also need to consider the time you have for investing. In other words, when do you plan to retire? Generally, the sooner you need your money, the less risk you will be able to take. Suppose you have a longer time frame to invest. In that case, your risk tolerance will be higher because you will have time to recover from market fluctuations.

Find a good online brokerage.

You can invest your money yourself through an online brokerage, or you could find someone to manage your investment portfolio for you. There are many online brokers to choose from; however, my favorites include the following:

Betterment: Betterment is a highly affordable way to invest your money. They have over 270,000 customers, and over $10 billion has been invested through their service. 

Betterment is an automated investment platform that’s cheap and super easy to use.

Once you invest with Betterment, your portfolio will be invested in several

exchange-traded funds (ETFs). They determine how to invest your money based on a short questionnaire you fill out. This platform is not a do-it-yourself account where you buy and sell. Instead, the platform automatically manages your account for you.

Not only will they handle investing for you, but there is also no minimum deposit to open an account. It’s perfect if you’re new to investing, have a limited amount to invest, and are intimidated by managing your portfolio.

Their fees are reasonably low at just .25 percent on accounts up to $2 million. Plus, they offer access to Certified Financial Planners (CFP) on balances of $100,000 and up for an additional fee. You can start investing in your future today with as little as $10.

STASH:  is a free app that you download, and it’s perfect for those of you who have trouble putting money aside yourself. The app analyzes your checking account and makes small transfers to your savings account.

Acorns: If you prefer investing any extra money you have rather than saving it, Acorns is a free app you download. Instead of throwing extra money into a savings account, the app rounds up your credit and debit card purchases and invests the difference.

Regularly review your investment portfolio

So, you have finally invested your money. What’s next?

Now it’s time to track your investments. This is important because eventually, you may need to change your investments, the amounts invested, etc.

Now, the key here is not to go crazy! Don’t become obsessed and check your investments every hour of the day. Small daily changes in the stock market won’t significantly affect your long-term financial goals.

The key here is to monitor your investments and ensure you’re staying on course to meet your short-term and long-term goals. Getting wealthy through investments takes time, so be prepared to develop consistent investing habits.

Step 6 – Giving Back

Whether you’re passionate about protecting the environment or eliminating hunger in developing countries, we encourage incorporating optional charitable giving into your plan into your Budget. You put your money where your heart is.

“We make a living by what we get, but we make a life by what we give.” ~Winston Churchill

The latest financial crisis has left many Americans reeling with economic uncertainty. Families struggle to pay the bills, feed their families, and save for their futures. While the government provides assistance to some, many families and individuals still seek assistance from charities.

According to a June 2017 report from the Giving USA Foundation, Americans gave nearly $391 billion to charitable organizations in 2016.

​When your finances are tight, it may seem impossible to give. However, it’s important to remember that you can provide more than money. There are multiple ways to support charities and give back to your community.

Give Your Time

All charities need money for day-to-day operation, but they also need volunteers to provide service to their client base. While your Budget might not leave room for monetary donations, you can give your time to help charities with their day-to-day operations.

Volunteer opportunities are available at food pantries, hospitals, schools, senior centers, libraries, and religious institutions. There are opportunities available to help in your very own neighborhood too.

For example, you can assist the elderly in your community by doing their grocery shopping or household chores. Or perhaps you could teach a free class to share a specific skill or talent.

So, don’t worry if there isn’t room for giving in the Budget yet. Giving back through volunteering is just as valuable as any money you can provide.

Turn Your Clutter into Donations

What material objects do you have around your house that you no longer use? Doing a deep clean of your home — places like the basement, attic, or closet — might yield amazing things you could consider donating to someone in need.  

When considering items to donate, make sure you check the condition of each item. Make certain electronics and appliances are in working condition and that clothes are free of stains and tears.

When donating children’s toys or games, make sure you have all the pieces. Also, if you’re planning to donate items from your pantry to a local food bank, make sure the goods haven’t expired.

The two most popular places that accept donations are Goodwill and The Salvation Army. They accept used clothing, furniture, appliances, toys, electronics, etc. Goodwill even accepts used-car donations!

However, other organizations need donations as well. Libraries and local schools need books and magazines. Women’s shelters need clothing and personal hygiene items. You can also give away items to others in your community on sites like Freecycle — a virtual community swap meet.

When donating items to charity, make sure you get a receipt to list each item with its estimated value that you’re giving away. You should also get a receipt for any cash donations you make.

When it’s time to file your taxes, you might be eligible for a tax deduction for your charitable donations. But you will need receipts or other documents to prove your claim. In some instances, the deduction for donated goods ends up being worth more than you could get if you sold the item, so keep that in mind.

Donate money to your favorite cause

Of course, the last way to give back is with a monetary gift. You’ll be better positioned to give money to your favorite charity once you’ve built a solid financial foundation through budgeting, saving, paying off debt, and investing.

There are many causes to support; however, you must do your due diligence when giving money to charities. Make sure the organization is reputable, and the money is going to issues and causes you support.

Final Word

Giving to others is extremely rewarding to you and those in need. While you may not have the financial resources to provide as you desire, there are still ways you can give back if you’re willing to be creative. You could donate your knowledge, a skill, or your time. There is a way for you to give back, even if you’re on a budget. 

Being charitable rounds out your journey towards financial freedom. Things happen in life, and financial security doesn’t exempt people from needing help.

Think of natural disasters like hurricanes, floods, and wildfires worldwide. Financial security would be helpful during these times, but some people are more prepared than others.

To help others who are less fortunate than you, do what you can to ensure your financial security. Then make an effort to contribute financially and provide service to others who need it. Things have a way of coming full circle, and you never know — you might find yourself in a position of needing help someday too.

Step 7: ​Looking Ahead

​Congratulations on taking steps to get control of your finances! However, any sound financial plan must involve continued monitoring, periodic review, and occasional re-evaluation. Mistakes happen, circumstances change, and your needs will vary at different times in your life.

Yourself a few questions:

Are all my expenses accounted for?

Are my figures correct?

Is my income correct?

Is my plan based on ACTUAL numbers, not on PROJECTED numbers?

Did I calculate everything correctly?

I’m I actually sticking to the plan?

I recommend that you review your plan monthly. If it is working, then a quarterly review should be sufficient to keep you on track. However, suppose there are any significant changes to your financial life. In that case, you will need to re-evaluate your plan and possibly change it.

Keep it up and enjoy knowing that you have taken the steps to Financial Freedom!