Financial Freedom Checklist: 17 Things to Do to Become Financially Free

What comes to mind when you think of financial freedom? You might think about going on expensive trips, dining out at fancy restaurants, and indulging in luxury purchases.

The idea of financial freedom looks different for everyone. For some, it may be about being able to afford anything they want—their dream home, a car, or even something as simple as a morning latte. For others, it may simply mean having enough money to pay their bills without being tied to a traditional 9 to 5 job. My idea of financial freedom is having a passive income that allows me to take care of myself and my family without constantly stressing about money.

While there’s no one definition of financial freedom, it’s all about one thing: the freedom to make choices that align with your goals without being limited by money.

The journey to financial freedom isn’t always smooth sailing and can sometimes feel elusive, but there are small, practical steps you can take to help you get there. To help you along this journey, here’s a checklist of 17 key things you can consider to become financially free.

17 Key Things To Do To Become Financially Free

1. Create a budget.

A budget is much more than just a simple plan that details your income and expenses—it is a reflection of your financial situation. By setting financial goals and sticking to a budget, you can make sure that you are spending money wisely and saving for important expenses.
When creating a budget, I start by listing all of my monthly expenses and income. Then, I set aside a specific amount of money for each category to make sure that I stay within my means.

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2.  Pay off debt.

Eliminating debt can improve your credit score, making it easier to qualify for loans with lower interest rates in the future. It also allows you to free up more of your income to save for emergencies or investments.

I usually prioritize paying off high-interest debts, such as credit card balances, before tackling other financial responsibilities. By doing so, I can save money on interest fees and get out of debt more quickly. 

3.  Build an emergency fund.

I believe it’s very important to build an emergency savings account. It helps you be prepared for unexpected expenses such as a car repair or a medical emergency. Without savings, you may have to go into debt to pay for emergency costs. 

The rule of thumb for building an emergency fund is to save three to six months’ worth of your living expenses in a separate savings account.

4. Save for retirement.

It’s never too early to start saving for retirement. Planning for retirement ahead of time can help you avoid financial stress and uncertainty in the future.

It’s always wise to set aside at least 10 percent of your income for retirement. It can ensure that you’re financially secure in your later years.

5. Automate your savings.

This is a simple yet powerful way to achieve financial freedom. By setting up automatic transfers from your checking account to your savings account, you can easily and conveniently set aside a portion of your income before it gets a chance to slip through your fingers.

There are several apps available that can help you automate your savings. These apps can help you set specific savings goals and even track your progress.

6. Diversify your income.

Explore different income streams that align with your skills and interests, such as freelancing or selling digital products. 

By starting a side hustle based on something I’m passionate about, I’ve been able to make more money and achieve financial security.

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7.  Pay your bills on time.

Staying on top of your bills helps you avoid late fees and interest charges. That allows you to save more money for your financial goals. 

One way to do this is to set up automatic payments through your bank account. You can also set reminders on your phone or calendar, so you never miss a due date.

8. Educate yourself about personal finance.

When you don’t know about personal finance, you may struggle to make wise financial decisions. By having a solid grasp of basic financial concepts, you can avoid costly mistakes such as overspending and taking on too much debt. 

Start building your financial literacy now so you can create a healthier relationship with  your money and increase your chances of attaining financial stability.

9.   Review and update your financial plan.

Keeping track of your finances can help you make better money choices and figure out where you can cut corners to improve your financial situation.

When I first went through my financial plan, I was a bit overwhelmed by the figures and the amount of work ahead. However, as I continued to work towards my goals, I was eventually able to achieve financial freedom.

10. Avoid lifestyle inflation.

When you start making more money, you may feel the urge to splurge on fancy stuff like expensive gadgets and clothes. This is known as lifestyle inflation, and it can hurt your financial well-being.

Instead of spending on things that don’t bring you value, make better use of your money by saving.

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11. Prioritize your spending.

Without a clear picture of where your money is going, you may find yourself spending frivolously on unnecessary things. Before heading to the store, take the time to plan out what you need and draw up a shopping list.

12. Compare prices.

Whether you are buying groceries, household supplies, electronics, or any other items, take the time to compare prices. This can help you get the best possible deal and save you money in the long run. Purchasing without comparing prices can lead to regret later on. You may find out that you could have gotten a better deal elsewhere.

13. Downsize your lifestyle.

While it’s natural to seek out better and bigger things, living with less can be more rewarding and beneficial in the long run. Owning less and living in a smaller space means less time and money spent on maintenance and repairs. Aside from helping you save money, living a simpler lifestyle will also help you find contentment in the simple pleasures of life. You can let go of the need to constantly keep up with others.

14. Keep an eye on your credit score.

Your credit score is an important aspect of your financial health. From acquiring a loan or credit card to applying for a job, your credit score can have a huge impact on your ability to reach your financial goals. Maintaining a good credit score can provide you with greater access to valuable financial opportunities. 

Monitor your credit score regularly to make sure it’s in good standing.

15. Focus on long-term wealth building.

One way to build long-term wealth is by investing wisely in assets that have the potential to grow in value over time, such as real estate. 

16. Stay disciplined with money.

Maybe you want to buy a house or take a luxurious vacation. Building long-term wealth is a wise financial decision that can make your dream a reality.

It isn’t easy to consistently make responsible choices when it comes to money. However, I’ve learned that with discipline, anyone can be good at handling their finances. By being mindful of my spending habits and committed to my goals, I was able to achieve freedom with money and live the life I wanted.

17. Celebrate your financial milestones.

Financial milestones are a reflection of your hard work and commitment to achieving your goals. No matter how small your achievement is, it is something that you should be proud of and celebrate. Celebrating financial milestones not only allows you to acknowledge the progress you’ve made but also motivates you to stay on track and keep going.

Final Thoughts

Being truly financially free isn’t necessarily about how much money you have. It’s about how you use that money to bring happiness and fulfillment into your life.

Before I embarked on my financial journey, I thought of money as simply a means to an end—a way to pay bills and cover the essentials of everyday life. All I knew was that I had to work to earn it. I lived paycheck to paycheck, constantly grinding to keep up with my bills and never thinking about the future. But over time, as I learned more about personal finance and how to manage my finances wisely, my perspective on money changed. I worked hard to be financially free, and now I’m able to do the things I love and provide a better life for my family.