How I Went from Crippling Debt to Financial Freedom: Top 10 Tips for Living Below Your Means

Struggling with debt in your 20s can be overwhelming, but it’s possible to achieve financial freedom with the right strategies. Here’s how my husband and I became nearly debt-free, and how you can too.

Key Takeaways

• Change your mindset: Shift from short-term gratification to long-term financial planning.
• Save on food: Focus on reducing one of your largest and most controllable expenses.
• Budget: Create and stick to a budget to track income and expenses effectively.

1. Change Your Thinking

Shift your mindset from short-term impulse decisions to long-term planning. Visualize it as moving from a valley, where your view is obstructed, to a mountain, where you can see far ahead. Short-term thinking might be fun now, but long-term thinking leads to greater fulfillment.

Example: If you want to retire comfortably, make decisions now that will benefit your future self.

2. Focus on Food Savings

Food is one of the largest expenses but also one of the easiest to cut back on. Reduce food waste and look for ways to save on groceries.

Tips:

• Plan meals ahead.
• Buy in bulk and freeze extras.
• Avoid eating out frequently.

3. Create a Budget

Having a budget is essential for managing your finances. It helps you understand how much money you have coming in versus how much you’re spending.

Tools:

• Use budgeting apps like EveryDollar.
• Adjust your budget monthly to account for special occasions or annual payments.

4. Track Your Expenses

To stay on budget, you must track your expenses. Use an app to record every purchase, making it easier to see where your money goes and adjust as needed.

Analogy: Think of it like a food diary for your finances. Just as tracking what you eat can help you lose weight, tracking expenses helps you save money.

5. Round Up Your Purchases

Round up your purchases to the nearest dollar. This simple trick helps you save without much effort.

Example: If something costs $4.75, budget it as $5. Over time, the extra change adds up to significant savings.

6. Invest in Yourself

Investing in learning new skills can lead to higher income. Courses, books, and training sessions can pay off by increasing your earning potential.

Example: Spending $200 on a course that leads to a $5,000 salary increase is a worthwhile investment.

7. Consider Side Hustles

Earning extra income outside your 9-to-5 can accelerate your financial goals. Find something you enjoy that you can monetize.

Ideas:

• Freelance writing or graphic design.
• Selling handmade crafts.
• Teaching online courses.

8. Ignore What Others Are Doing

Don’t feel pressured to keep up with the Joneses. Focus on your own financial goals rather than comparing yourself to others.

Example: A neighbor’s new car might be impressive, but it doesn’t mean you need one too. Prioritize what’s important for your financial health.

9. Avoid Taking Advice from Broke People

Be cautious about whose financial advice you take. Ensure your sources are credible and have a track record of financial success.

Example: Tips from someone in debt may not be as reliable as advice from a financial advisor or successful entrepreneur.

10. Take Debt Off the Table

Remove debt as an option. This forces you to find creative, patient ways to achieve your goals without borrowing money.

Example: If you want to buy something, save for it rather than using credit. This builds resilience and financial discipline.

Practical Steps to Implement These Tips

Tip	Actionable Step
Change Your Thinking	Set long-term financial goals and visualize their benefits.
Focus on Food Savings	Create a meal plan and stick to a grocery list.
Create a Budget	Download a budgeting app and input your income and expenses.
Track Your Expenses	Record every purchase in your budgeting app immediately.
Round Up Your Purchases	Always round up to the nearest dollar when budgeting.
Invest in Yourself	Enroll in a course or read a book that enhances your skills.
Consider Side Hustles	Identify a hobby or skill you can monetize and start a small side business.
Ignore What Others Are Doing	Focus on your personal financial goals and avoid comparisons.
Avoid Taking Advice from Broke People	Verify the credibility of your financial advisors.
Take Debt Off the Table	Commit to saving and avoid new debt.

Achieving financial freedom is a journey. By applying these strategies, you can gradually move towards a more secure and debt-free future. Remember, every small step counts and consistency is key.

If you found these tips helpful, start implementing them today and watch your financial situation improve. Your future self will thank you!