So you decided to be free financially. This is a great decision. Having to constantly worry about money is detrimental to your health and your portfolio. Living in constant fear of creditors or billing calls is a nightmare you can avoid.

But how do you get started? Life is expensive, especially if you have children or have a previous debt. Sometimes it can seem impossible to get out of your current situation. However, if you live in a free (or relatively free) country and are willing to make some sacrifices (sorry, nothing comes for free these days), you can significantly improve your financial situation in the very near future.

Step 1: Get out of debt

If you have debts (except a mortgage that you pay on time), you must first get rid of it. Debt is like an investment that goes against you, which means that the more time you spend, the less money you have. Being in debt is one emergency, and should be treated as such. Your time and resources should be geared towards getting out of debt, paying more than the minimum payments (which are mostly interest payments), negotiating more money, and most importantly, not getting into more debt. If you find yourself in a hole, stop digging.

If you need help, consider contacting debt relief specialists who will create a personalized plan that will help you leave your debt days behind. Even without them, there are several methods to get out of debt quickly (prioritizing the interest rate or total money). Just pick one that works for you and stick with it. Discipline is key here. When you have no debts, no creditor has power over you.

Step 2: Stop generating more debt

When you are debt free, it stays that way! Buy only what you can afford right now. Do you use a credit card? Pay it in full each month. Don’t let more debt into your life as it only works against you. Make sure your expenses are lower than your income and don’t postpone any payments. Interest in them can be deadly.

Most importantly, don’t take out loans for daily expenses. Loans should only be taken out to buy assets that increase their value or help you generate more income (such as well-thought-out business loans). Personal loans can drown out debts and you should avoid them at all costs. If you want something, save it. Don’t apply for loans now and work for years to pay it off. Remember: in debt, interest works against you.

Step 3: Create emergency reserves

Once you owe nothing, you can start working for yourself than for others. Calculate how much you invest on average each month and start saving towards an amount that will last you six months. For example, if you invest $ 3,000 each month, you should save at least $ 18,000 on your emergency reserves. These reserves must be stored in a savings account or in any investment that does not decrease in value and can be collected almost immediately.

Use these reservations only for emergencies, if you are fired or have a huge one necessary expense that cannot be paid with your regular checking account. This money is not for traveling, buying a boat or buying jewelry. Its sole purpose is to save you in the event of an emergency.

Can’t save? This is not true

If you think “there is no way you can save that amount of money,” you are wrong. Because you have no debt, you already have an income equal to or greater than your expenses. Now you can (and should) follow both directions: increase your income and decrease your expenses. This way you save money much faster.

First, see how you can get more money from your work. Ask for a raise and, if possible, do a side job. Negotiate a lot and get what you want (of course, don’t burn bridges. You still need work). If you are willing to take a risk, start a secondary business. Everyone has something to sell and today it is easier than ever to sell online. There are also many companies that allow you to work from home (for example, some telemarketing jobs), so you can use that time as well. Of course, leave it for a while.

Second, whenever you spend money, regardless of whether it’s a small or large sum, write it down. At the end of each month, look at the list of expenses and think about what expenses were not necessary. It can be hard to lower your standard of living, but it’s always smart to live below your means. When you want more, increase your resources.

Check your home and car insurance policies and see if you can save anything. Maybe you can get the same coverage for less, which can save you a fortune in the long run.

Step 4: Get your credit in order

If you have debts, your credit score will probably be very low. This is a situation you need to resolve, as much of our financial life depends on this score. It can prevent you from renting a home or making you pay a lot for an emergency loan or mortgage (this is A LOT recommended a MAY take out an emergency loan, but when reservations run out and you run out of options, it can be a temporary solution).

Improving your score is a difficult task, but since you have no debt, you should be able to pay off your credit cards. completely every month. You can also try some credit repair services if you think they can help. Most of them have free consultation, so use it before making any commitments.

Step 5: Save and invest

This is where freedom begins. You had debts, which are investments that work against you. Now, finally, you will have investments working per you. Take what you have saved each month and put it in an investment account. Don’t go crazy – invest in stocks, bonds, real estate, and other investments you make to understand. After investing, forget that it is there. It is not intended to grow ten times in a year. But over time, as you invest more and reap the benefits of compound interest, that amount will grow. The more you save each month, the faster you will achieve financial freedom.

Step 6: Financial freedom

That is your goal. Being financially free means, at least for us, that you don’t have to go to work to maintain your current standard of living. In other words, your passive income (income not generated to be employed but “passively” (dividends, rent, etc.) is greater than your expenses. This is what financial freedom: elections is all about. work, but you can choose to work (for even greater income.) You will become the owner of your time, your best irreplaceable asset.This is the true meaning of freedom.

Of course, the term “passive income” is misleading. Nothing is ever passive. All of these investments need to be handled with care, which also takes time. However, it takes much less time than working eight or nine hours a day. You can spend the rest of your time improving your health, being with your family, or reading books. You decide. You choose.

This list is very general, but describes the general idea quite well. Getting to the final step is not easy. It takes time and discipline to get to this point (and if you have trouble cutting expenses, you’ll get significant revenue). But even partial financial freedom is better than financial slavery or debt.