3 Simple Steps to Achieve Both Debt-Freedom and Financial Freedom

Posted by Sha'Kreshia Terrell in Personal FinanceOctober 12, 2021(Last Updated July 22, 2022)3 min read
Key Takeaways
  • Financial freedom is achievable no matter how much debt you have and how much money you make.
  • Having debt can become overwhelming, especially if you are unsure where to start on your debt-free journey.
  • There is a big difference between gross income and take-home pay. You can't set a budget if you don't know how much money you are bringing in.
Are you ready to make some real money moves?

Having debt can become overwhelming, especially if you are unsure where to start on your debt-free journey. You may even ask yourself these questions, "Is it possible to become debt-free?" or "How can I achieve financial freedom with all this debt lingering over my head?" But, if you're tired of being knee-deep in debt and you are searching for a way out, you've come to the right place.

 

Financial freedom is achievable no matter how much debt you have and how much money you make. All you have to do is stay the course. Here are three simple steps that you can implement today to start your road to becoming debt-free and financially free. 

 

1. Figure out how much you bring home after taxes 

 

There is a big difference between gross income and take-home pay. You can't set a budget if you don't know how much money you are bringing in. Therefore, it's important to understand how to calculate your paycheck to create the right spending plan that fits your lifestyle. 

 

Image Credit: Shutterstock by Andrey_Popov

 

If your income is inconsistent, round up a bit to give yourself some wiggle room. Add in all income that you receive. Once you have an accurate number of what your weekly or monthly income looks like, then you can better prepare yourself to start your debt-free and financially free journey.

 

Recommended Read: Money I Make vs. Money I Take Home: Understanding Paycheck Deductions

 

2. Add up every bill that you have 

 

Suppose you are new to budgeting your expenses and creating a plan for your money, no worries! First, look at your past bank or credit card statements to see your most recent transactions and recurring expenses. As you go through your statement, you should add up your expenses that include your utility bills, rent, groceries, and your entertainment expenses like your monthly subscriptions or going out to eat with your friends. 

 

Image Credit: Shutterstock by baranq



After you know your bills and expenses, you should add a column in your budget that includes your savings. You may feel like you don't have enough to start saving money, but it will add up over time even if you start small with $5 per month. The trick here is just to start. This is the stage where you truly find out where your money is going. 

 

Recommended Read: Advocating For Yourself With Utility Companies

 

3. Setup a budget 

 

People often get discouraged when it comes to creating a budget. The word "budget" may even sound like a restrictive word that leads to financial deprivation or anxiety. Many people may say things like, "I don't know how to set a budget," or "Where do I even start?" However, you can still live your best life all while you are heading toward debt-freedom. 

 

Budgeting will help you reach your financial goals faster because you know your income and your expenses. However, if you happen to find that your budget leads you to a financial deficit (your income is not enough to pay for your expenses), then you will need to find ways to cut back. 

 

If you find that you have a surplus (extra money leftover) within your budget, then you can put that additional money toward paying off your debt. 

 

Recommended Read: Motivate Yourself by Nicknaming Your Bank Account(s)

 

Congratulations! You've just taken the first step towards your debt-freedom journey! If you practice these three steps each month before you know it, you will be debt-free and well on your way to financial freedom. 

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