7 Steps to Financial Freedom
One of the most common causes of conflict between married couples is financial distress. More often than not, it’s not so much insufficient income as it is poor management of funds. Financial freedom is more about avoiding the bondage of debt than it is about achieving great wealth.
Nowadays, many have convinced themselves that it’s normal to be drowning in debt ~ home mortgage, car loans, credit card debt, etc. Rather than understanding how much that financed $75,000 SUV will actually cost by the time it’s paid off in five years or so, many focus only on the monthly payment. Instead of acknowledging the exorbitant amounts of money being spent on interest, many pay only the minimum credit card balances each month. Continually charging purchases and increasing account balances can eventually lead to financial disaster.
Unexpected events could cause any of us to suffer temporary financial setback, but too many are choosing to neglect basic financial discipline. The resulting pressure put upon the marriage relationship causes unnecessary anxiety and conflict.
My very wise husband taught me a lot about stewardship and monetary responsibility very early in our marriage. As a single-income family for 31 years and counting, we’ve had a lot of experience with household financial management! Listed below are a few tips that just might help in finding a measure of financial freedom . . .
1. Avoid Interest
With the exception of a home mortgage, it’s wise to avoid paying interest on financed purchases. This includes car loans, credit card balances, and luxury items that can’t be acquired with cash-on-hand. Interest charges can double, triple, or even quadruple the actual purchase price of an item once it’s finally paid in full. Buy only what can be purchased with cash and never overextend financially. Nothing will put a knot in the stomach like drowning in debt.
2. Avoid Fees
To avoid late fees and penalties, pay bills on time and in full. Always keep account balances current to avoid inadvertently incurring overdraft fees. If utilizing online banking, be aware that some vendors don’t post transactions immediately. Some purchases may not be deducted from your account balance until up to two weeks after the date of purchase.
Avoid the use of ATM’s which charge transaction fees. A dollar or two per transaction adds up dramatically over the course of a year. That extra cash could quickly increase a savings account balance, and be the difference between coming up short and averting financial setback.
3. Pay Cash
If saving is prioritized, there will be cash available for necessities and, most likely, for a few luxuries. It’s perfectly fine to use a credit card for purchases in lieu of carrying around bundles of cash as long as the bill is paid in full at the end of the month. Some credit cards even offer cash-back or other perks that actually provide a benefit to the user. For example, the credit card we use most often issues a small cash-back percentage on all purchases. We use this card almost exclusively for this reason. By charging most purchases {groceries, gasoline, etc.}, and paying the bill in full each month, we receive several hundred dollars back at the end of the year. That money is applied either to the current account balance, or is placed in our savings account.
4. Economize
Why pay $6 for a gallon of milk at a convenience store when you can buy it from Walmart for $3? Or why pay $85 for a designer blouse at an exclusive department store when you can find name-brand clothing at thrift shops for a fraction of the inflated retail price?
Shop sales and clip coupons. Hunt yard sales and flea markets. Take advantage of websites like eBay and Craig's List.
Do comparison shopping online instead of wasting time and gasoline driving from store to store. Putting forth a little effort to find the best price is well worth it. You can often find great deals online as well as free shipping.
Instead of dashing out for an item, combine errands in the same day. This simple practice saves time and gasoline, and frees-up the rest of the week for other activities and time for one another.
5. Eat In
Dining out can be very expensive, especially if it becomes habitual. The cost of meals, drinks, and tips often far exceeds the cost of preparing meals at home. Eating at home most of the time will save a surprisingly significant amount of money. Utilizing restaurant coupons or purchasing specials can stretch the dine-out budget considerably.
Packing a lunch each day instead of eating out is also a huge savings. The cost of buying lunch on a daily basis can deplete a household budget very quickly.
6. Save
Don’t be fooled into believing the sun will always be shining. Things happen . . . illness, injury, job loss, etc. Be prepared for the storm before it starts to drizzle. Have a savings account that can be accessed quickly and without penalty. Diligently placing a portion of each paycheck into a savings account ensures available funds in the event of an unexpected emergency.
7. Tithe
God in His graciousness provides all our needs. It is the duty of every Believer to return to Him a portion of what He has provided. It is up to the individual to determine what that portion is, and it is not strictly limited to monetary contributions to the church. We are also to give of our time and talents in order to bless others. Whatever is given, do so with a grateful heart and a cheerful attitude.
Finally, always remember that Our Provider has entrusted each of us with the income we have been given. He expects us to manage our finances wisely, carefully, and faithfully, and to purpose to avoid financial bondage. Being a good steward of the household income directly reflects our character, and affects the marriage relationship. A family should never be subjected to the stress and fear of preventable financial disaster. Practicing a little discipline will result in financial freedom, provide a greater sense of security to those we love most dearly, and bring honor to the One from Whom all blessings flow.
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“Beware of little expenses. A small leak will sink a great ship.”
~ Benjamin Franklin