Downsizing, Becoming Debt-Free And Saving For Retirement

What steps are you taking to win financially?  Are you cutting back due to the recession and saving more?

No matter how you slice it, life takes money. 

It takes money to take care of your kids.  It takes money to advance a cause.  It takes money to retire with dignity.

Buying more than you can afford and accumulating debt drains you of your financial power.  It binds you and limits your options, recession or not.

4 steps to gain financial freedom and win with money

Don’t get me wrong.  I certainly don’t advocate greed or using money to push others around.  However, having a little money will buy you the freedom and influence to do a lot of good in the world.

One of the reasons I want to be smart with my money is so I can give generously to those things that I am passionate about.  If I’m financially secure, then I can also devote more of my time to things of greater significance.

Okay, so how do we go about gaining financial freedom?  Here are the four steps I believe will get you headed down the right path.

1.  Take a deep breath and relax

You probably expected something else as the first step.  Well, with all the hype going on in the media, the craziness on Wall Street and the politicians constantly screaming about the financial crisis, I think we all need to pause for a moment to regain our composure.

You do not want to go off half-cocked.  Take a breath first.  I like what Sara writes about Finding Sanctuary in Yourself. 

We need to calm down, find some inner silence and only move forward in making decisions when our emotions are under control.  Otherwise, we are likely to do something stupid.

Fear leads to rash behavior and shaky decisions neither of which generally result in winning with money. 

Take your time.  Figure out a solid plan and then execute it methodically.

2.  Consider downsizing your lifestyle

Many of us could afford to downsize our lifestyle a bit to gain some margin between what we earn and what we spend.

Madison and her husband have been tossing around ideas about downsizing their home.  In Should We Downsize?  More Considerations, she shares some of the input she received from other bloggers and readers that is helping them decide what to do.

I like Madison’s approach.  First, she and her husband are not holding anything back.  They’re even willing to sell the house they love if it means retaining their financial freedom.  They have their priorities straight.

In addition, Madison is gathering a lot of information, thoughts and advice before taking such a big step.  This is exactly the kind of deliberation that helps people make smart choices.  I applaud her effort and method!

Is your lifestyle bloated?  Do you need to downsize?  It is a sometimes painful, but often necessary step toward financial freedom.

3.  Become debt-free

Once you are living below your means, then start paying off all your debt.  Becoming debt-free is the only way to regain complete control of your finances.

Do you have a lot of debt?  Well, so did Ron, but he has a lot less now!  He tells us How I Paid Over $120,000 in Debt in 52 Months.  What an incredible story!

Think Ron’s story is impossible?  Well, I know that it is possible to become debt-free because my wife and I paid off about $28,000 in debt in just under two years. 

If Ron and I can do it, then so can you!  We’re both just normal guys with families living in Arkansas and Oklahoma making middle class incomes.  We simply developed a plan, got serious and stuck with it until our debt was gone!

Once you have your debt paid off, then you’ll have the freedom to start saving and giving.  The benefits of being debt-free still amaze me every day.

4.  Save a nice nest egg for retirement

Retirement will be here before you know it and I want to retire with dignity.  I want to be able to enjoy not having to work!

The only way that I know of that I’ll be able to do that is by saving money now.  Sounds simple, right?  Then why do so few of us actually do it?

I guess many of us don’t see the immediacy of the problem.  We feel retirement is a long way off.  Well, it may be, but it also takes time to accumulate the kind of wealth you’ll need to retire comfortably.

Frugal Dad asks Saving For Retirement: What’s Your Number?  Have you ever stopped to figure out how much you’ll need to live the way you want after you retire?  If not, then you need to read Frugal Dad’s article!

I’m really starting to sock some money away for retirement.  I look forward to many years of traveling, playing with the grandchildren and living a life of leisure once I retire!

It just takes a deliberate plan to gain financial independence

Financial independence is not that hard.  You just have to take a breath, make a few sacrifices, pay off some debt and save for the future.

Once you’ve started down this path, you’ll gain a sense of peace about your money.  You’ll also begin to see the wisdom in your choices and experience the freedom of being financially independent!

What are you waiting for?

Photo by Material Boy