Budgeting Your Way to Financial Freedom
The simplest way to work towards financial freedom is not difficult, but that doesn’t mean it’s completely painless.
Over my adult life, I’ve taught myself to live within my means. Believe me, at first this was quite challenging. In my teens, I’d been used to having mum and dad dish out the dosh, buying me anything my heart desired.
Basically, they created an insatiable monster, but that’s another story…
I got used to spending money. Their money!
Then bam, crash, along came real life…
I went out to work, with my first job paying the princessly sum of $110 per week. Ba bow! It hurt. A lot. So, I did what any resourceful (but stupid) teenager would do. I got a credit card. Ouch! It took many years for me to get myself out of the credit card debt cycle. A bunch of clothes that were out of fashion or no longer fit were all I had to show for it. To be fair, I did have a lot of fun along the way too, strutting my stuff in designer suits purchased in Rome, but was it worth it? No, definitely not!
Then along came responsibility. Marriage, a mortgage and three children. That’s when things changed big time. We simply did not have the cash to splash around. Things were so tight, we used to treat ourselves with the occasional bottle of wine instead of a cask, or once in a blue moon, we’d go out for Thai, Chinese or order in pizza. Holidays were spent in borrowed holiday units or a tent by a beach.
Our funds were so tight, we had no option but to do one thing and do it well…
Budget!
My husband and I would pool our funds, allocating our income carefully into designated bill and various expenditure buckets. This was after the process of closely scrutinizing, and documenting our weekly/monthly expenditure in every area of our lives, in fine detail.
It was hard at first, but we soon got used to it our new financial routine. Because it made a significant difference in not only our financial life but our overall quality of life. We knew exactly where every penny was going.
We prioritised paying down debt (that should always be a priority, particularly if interest rates are high). We only used our credit card for emergencies. When renovating, we did use a credit card to pay for our kitchen, however we moved the debt over to a 12-month, 0% interest rate credit card, paying down the debt within the required timeframe before the interest rate hiked back up after the 0% period expired.
I had a specially made Budget template that I designed, capturing our entire financial life on one Excel spreadsheet. No matter what, we also allocated savings every pay, enjoying steadily watching our savings grow, month after month. These savings eventually led to trips to the UK, Disneyland, Hong Kong, Bali, Thailand, Sri Lanka, the Maldives, as well as weekends away and plenty of fantastic nights out with friends. Our kids had everything they could want and need.
All in all, we are pretty happy with how we’ve managed our money over the years.
In fact, I enjoyed the process of learning about our financial life so much, I ended up completing my Diploma in Financial Planning in 2012. As a Holistic Life Coach, I can’t offer you investment advice, but I can offer you my experience and insights to support you to learn how to budget your money better and work towards financial freedom.
