Tuesday Talk – Time Freedom

What is time freedom to you? It will look different for each person, and maybe for each time period of your life as well.

For a young parent, time freedom could mean they are available to be at their child’s every sports event, every school play, every field trip.

For a couple in love, it might be freedom to go on trips any time they want for as long as they want without worrying about missing work.

For a 50-something couple maybe it’s the ability to retire without debt or worrying about where the money will come from to pay the bills.

Or maybe it’s the dream of a relaxing life on the beach!

My husband and I are in the midst of planning our financial future. We are already building two different types of passive income and working on a third in the near future. Our goal is to retire in 5 years or less with no mortgage or other debt and we are on track!

What are you doing to get yourself closer to time freedom? Here are a couple of ideas:

  1. Pay off your debt as quickly as possible
  2. Start an emergency fund that easy to access
  3. Put your money to work for you via smart investing
  4. Create passive/residual income
  5. Simplify your life, cut down on unnecessary expenses
  6. Spend small, live big
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Sunday Solutions – Debt Free Living

Do you want to be debt free but there is no end in sight? Living under monthly debt is difficult! But there is a way to pay that off and see the light at the end of the tunnel. The first step is keeping track of your finances… every cent. There are a couple of options, depending on how much self control you have. =)

When we were newly married, we used option one. The envelope system. In todays post, I will share how it works.

  1. Create a budget for your bills. For example:
  • Household Expenses – this envelope contains the mortgage payment and utility bills
  • Vehicle Expenses – this envelope contains the car payments, car insurance, car registrations fees and gas money
  • Credit Cards – this envelope contains the monthly payment for the credit cards
  • Other debt – this envelope contains the monthly payments for other debt
  • Internet and phone – this envelope includes cell phones and home phones
  • Miscellaneous – put cash in this envelope for anythingthat doesn’t fit in other categories
  • Grocery – self explanatory… your monthly grocery budget goes in this envelope
  • Entertainment – include your cash for movies, eating out, Netflix, cable, bowling, sports, gym membership and any other entertainment you participate in
  • Clothes – put your budget allotment for clothing in this envelope
  • Health care – this envelope would include cash used for deductibles, health insurance payments, and dental costs
  • Child care – if you have child care costs, place the cash in this envelope
  • Charity – ideally this envelope will have 10% of your take home pay
  • Emergency savings – deposit monthly into this envelope until it has 1000 and then don’t touch it unless it’s an emergency. Keep adding to it as you are able.

2. On the outside of each envelope, write the amount of each bill and then total them and write that as well.

3. At the end of the month, put that amount of cash in each envelope. Once the envelope is empty, do not spend in that category any more.

4. Next, look for things you can sell to fill the envelopes quickly. It will be amazing how good that feels! Have a garage sale! Sell on eBay or Amazon!

5. Find ways to cut back on expenses. Here are a few ideas:

  • Buy a flavor and a frother and make your coffee at home.
  • Make eating out a special occasion instead of an every day occasion.
  • Pack a lunch instead of buying lunch.
  • Do your own nails instead of getting them done.
  • Choose a lower cable/internet/phone package.

There are many ways to save. Every little bit adds up!

6. The final tip I want to share today is the debt snowball. The way this works is to pay extra on your smallest debt until it’s payed off. Keep paying the minimum on the other debts. Once the smallest debt is paid off, take the money you were spending there and add it to the next smallest along with the minimum payment. Do this until the second debt is paid off. Keep doing this until all the debt is paid off. When all the debts are paid, start using the money for investing!

What other ways do you strive to be debt free? Share in the comments below and pass this along to friends! Stay tuned for more tips next time!