When you hear the word “budgeting,” you might envision spreadsheets and experience little pangs of anxiety. You definitely aren’t thinking about financial freedom. Financially free people are so rich they don’t need a budget, right?
The very definition of financial freedom is actually quite vague, and it doesn’t necessarily have anything to do with the amount of money someone has (or doesn’t have).
To understand what being financially free really means, imagine this: you’re getting ready to present an important project and suddenly your computer crashes. Everything is backed up on the cloud, but you don’t know how you’re going to afford a new computer. Yikes.
Now imagine you’ve got a safety net. You’ve set up an emergency fund, so you hardly even notice the chunk of cash missing from it once you purchase your new laptop. This super expensive inconvenience still feels annoying af, but it doesn’t phase you.
Feelin’ relieved? Yup, that’s what financial freedom feels like!
Now back to budgeting. Budgeting is one of the best ways to guarantee you’ll feel this kind of relief & comfort when you think about your finances. Here are some other great ways to do so:
- Winning the lotto
- Becoming a viral TikTok sensation overnight
- Investing $5,000 in Tesla back in 2011 (you’d have over $600k chillin’ in your investment portfolio right now)
Sooooo… when’s the last time you planned out a monthly budget….? Never? Same here, fam. But don’t worry, onomy’s got you covered.
We may never get that TikTok money or win the lotto, but we can always rely on budgeting to help us reach our financial goals.
Here are 3 ways budgeting can help you experience financial freedom:
1) You’ll stay out of debt
Wanna know something crazy? According to debt.org, the average American has $90,460 in debt.
Everything’s all fun & games when you’re swiping your credit card, buying the latest trends and enjoying dinners out with friends 4 times a week, but soon enough you may find yourself stressfully living from paycheck to paycheck.
Or even worse, you could fall into an overwhelming amount of debt if you’re not paying close attention.
If either of these scenarios sound similar to your current financial situation, don’t feel bad. It’s pretty clear a majority of us could use some budgeting tips according to that crazy stat above.
Plus, it’s never too late to start budgeting and get yourself back on track. When you budget well, you’ll get yourself out of debt and STAY out of debt.
Check out our video on the 50/30/20 rule of budgeting to help you break down your spending categories (including debt if you have any). This lesson is a great place to start the budgeting journey, and it’ll make you feel a whole lot better about financial planning.
2) You’ll experience less financial stress
It’s a common misconception that budget planning or budgeting in general sucks the fun out of life. However, when you know what you’re doing, it’s exactly the opposite.
Since you’ll be staying out of debt — or getting yourself out of debt — with your budget, you’ll be a lot less stressed when it comes to your finances.
And remember this: you’ll still have money to spend on the things you want to spend on like vacations, new clothes, concert tickets, etc. Budget planning takes into account all of the *fun* things in life, and you don’t have to worry about giving them up.
Rather, you’ll just start to notice where you can cut back, what’s really important to you and how you can strategically save for big purchases.
Setting your specific financial goals are a huge part of the budgeting process, so you’re going to want to get clear on those.
When you create a budget and stick to it, you control your finances instead of being controlled by them. And it feels goooooood.
3) You’ll experience less financial stress
Lose your job? Get a parking ticket? Computer crashed? Got rear-ended?
All of the expensive inconveniences life throws at you will pop up from time to time.
When you have an emergency fund you’ll always feel prepped and at ease knowing you can afford stuff like this. However, you will still feel very annoyed.
Check out our lesson on building an emergency fund right here to get the lowdown on where to start, how much you should dedicate to this fund and what it should be used for.
Financial freedom can mean a lot of things, but overall we think it means NOT feeling a pit in your stomach when you look at your bank account.
Ready to start budgeting yet?