Here’s What Financial Freedom Really Means — and 4 Steps to Get There
Maybe you dream of waking up next to the ocean on a gorgeous piece of land you own, surrounded by nature, with zero internet because you never need to work again.
Or maybe you dream of waking up somewhere other than your childhood bedroom, without your parents nagging you to get a job and move out because you’re 35 years old.
Financial freedom can mean something different to everyone, but it always comes back to this: What drives you to get up and go to work?
We’re not talking about just your job, we’re talking about whatever it is you’re doing to reach those financial-freedom goals you have — improving your credit score so you can buy a home for your family; paying down your debt, so you can relieve yourself of the anxiety sitting on your chest; finally taking that leap to invest and build your retirement fund.
Whatever your vision of financial freedom is, we’ve compiled the five steps that can help you get there.
1. Add Up To 300 Points To Your Credit Score
If your vision of financial freedom is owning a house, or leasing a car, or even just opening a credit card in your name you know that a good credit score is an important part of getting there.
When it comes to your credit score, it’s important to stay organized and keep tabs on it. After all, it’ll play an essential role in any big purchase you want to make — and could save you thousands.
So if you’re looking to get your credit score back on track — or even if it is on track and you want to bump it up — try using a free website called Credit Sesame.
Within 90 seconds, you’ll get access to your credit score, any debt-carrying accounts and a handful of personalized tips to improve your score. You’ll even be able to spot any errors holding you back (one in five reports have one).
James Cooper, of Atlanta, used Credit Sesame to raise his credit score nearly 300 points in six months.*** “They showed me the ins and outs — how to dot the I’s and cross the T’s,” he said.
Want to check for yourself? It’s free and only takes about 90 seconds to sign up.
2. Stop Paying Your Credit Card Company
If you have credit card debt, you know. The anxiety, the interest rates, the fear you’re never going to escape… Digging yourself out of that debt could be your version of financial freedom.
And the truth is, your credit card company doesn’t really care. It’s just getting rich by ripping you off with high interest rates. But a website called AmOne wants to help.
If you owe your credit card companies $50,000 or less, AmOne will match you with a low-interest loan you can use to pay off every single one of your balances.
The benefit? You’ll be left with one bill to pay each month. And because personal loans have lower interest rates (AmOne rates start at 2.49% APR), you’ll get out of debt that much faster. Plus: No credit card payment this month.
AmOne keeps your information confidential and secure, which is probably why after 20 years in business, it still has an A+ rating with the Better Business Bureau.
It takes two minutes to see if you qualify for up to $50,000 online. You do need to give AmOne a real phone number in order to qualify, but don’t worry — they won’t spam you with phone calls.
3. Start Investing and Save For Retirement: Get up to $200 in Free Stock from This Company
Investing can seem overwhelming if you’ve never done it before. But in order to reach financial freedom, letting your money sit and earn pennies may not get you there.
If you feel like you don’t have enough money to start investing, you’re not alone. But guess what? You really don’t need that much — and you can even get free stocks (worth up to $200!) if you know where to look.
Whether you’ve got $5, $100 or $800 to spare, you can start investing with Robinhood.
Yeah, you’ve probably heard of Robinhood. Both investing beginners and pros love it because it doesn’t charge commission fees, and you can buy and sell stocks for free — no limits. Plus, it’s super easy to use.
What’s best? When you download the app and fund your account (it takes no more than a few minutes), Robinhood drops a share of free stock into your account. It’s random, though, so that stock could be worth anywhere from $2.50 to $200 — a nice boost to help you build your investments.
4. Set Aside Millions For Your Family’s Future
Have you thought about how your family would manage without your income after you’re gone? Chances are your checking account balance won’t last forever. And if your dream of financial freedom includes your childrens’ financial freedom, then you need to prepare for that future in case it arrives too soon.
Here’s the thing: You should keep a healthy amount of savings in the bank, but if you want to give your family up to $1 million, use something called term life insurance.
We suggest a company like Bestow. Maybe you’ve considered this before, but thought it was only for rich or older people. But we’re hearing that people are getting it for as little as $16 a month.
You can take advantage of Bestow until you’re 54 years old, but the sooner you take care of this, the cheaper it could be.
You don’t even need to leave your house to get a free quote from Bestow — it takes minutes. Instead of leaving your family with what’s in your checking account and a bucket of worries, they’ll be able to afford the life you’ve always wanted for them.
5. Become A Better Saver And Grow Your Money Faster — Without Risk
While investing can be a rewarding way to reach your financial goals, you shouldn’t ignore smart saving, too. Find a place to safely stash your money away — but make sure it’s still earning money.
Under your mattress or in a safe will get you nothing. And a typical savings account won’t do you much better. (Ahem, 0.06% is nothing these days.)
But a debit card called Aspiration lets you earn up to 5% cash back and up to 16 times the average interest on the money in your account.
Not too shabby!
Enter your email address here to get a free Aspiration Spend and Save account. After you confirm your email, securely link your bank account so they can start helping you get extra cash. Your money is FDIC insured and they use a military-grade encryption which is nerd talk for “this is totally safe.”
6. Cut Down Your Expenses And Save Hundreds
No matter what your dream of financial freedom is, having more money in your pocket will help you get there. And there are likely bills you pay every month that you could cut down dramatically.
For example — when’s the last time you checked car insurance prices?
You should shop your options every six months or so — it could save you some serious money. Let’s be real, though. It’s probably not the first thing you think about when you wake up. But it doesn’t have to be.
A website called Insure.com makes it super easy to compare car insurance prices. All you have to do is enter your ZIP code and your age, and it’ll show you your options.
Using Insure.com, people have saved an average of $489 a year.
Yup. That could be $500 back in your pocket just for taking a few minutes to look at your options.
7. Make a Budget — And Stick To It
The single task of creating a budget and actually sticking to it can be someone’s idea of financial freedom. Knowing where their money is at all times and feeling confident in every dollar they spend.
And even if it’s not part of your dream, having a budget to follow will help set you up for financial success, no matter what your goals are.
We recommend the 50/30/20 method. It’s simple, yet effective, and has a bit of a cult following, too! Here’s how it shakes out:
50% of your take-home income every month covers your fixed expenses — rent, utilities, groceries, minimum debt payments, etc. 30% goes towards the things you can live without, but don’t want to (like food delivery, a Netflix subscription and travel). Finally, the last 20% of your monthly income is dedicated to your financial goals.
Kari Faber is a staff writer at The Penny Hoarder.
***Like Cooper, 60% of Credit Sesame members see an increase in their credit score; 50% see at least a 10-point increase, and 20% see at least a 50-point increase after 180 days.
Credit Sesame does not guarantee any of these results, and some may even see a decrease in their credit score. Any score improvement is the result of many factors, including paying bills on time, keeping credit balances low, avoiding unnecessary inquiries, appropriate financial planning and developing better credit habits.