11 Things You Must Do To Become Financially Free in 2024
In this blog I will share with you 11 Things You Must Do To Become Financially Free in 2024.
If you want to become Financially Free in 2024 there’s some important steps you must take in the order that I have written them.
The first step is the most important and doesn’t require any money and you can do it right now from your chair.
If you can successfully do step #1, the following steps will be much easier to follow and much more effective.
Take this blog one step at a time. If you do Step #1 then you are going to be able to do all the other steps, how quickly depends on how often you do Step #1.
So start there and do Step #1 everyday. Eventually, you’ll be able to do Step #2, and then Step #3, and so on.
Here are the 11 things you must do to become Financially Free in 2024:
#1 Change Your Mental State Around Finances and Freedom
This is the most important step, and that’s why it’s the first step. You must change your mental state FIRST before you do anything else. If you feel like you need something, you become needy. So we overwrite this neediness with contentment, joy and fulfillment.
First, close your eyes and imagine yourself already financially free. Imagine where you are. Are you sitting or standing? Are you in your home or a different place? What do you smell? Is there a breeze? How do you feel? What are you doing?
It’s important to imagine how you feel and really feel it. Are you relaxed? Are you excited?
Practice this every day. The more you practice, the more your mental state will be in a free and happy state. You won’t feel like you need anything to be free because you will already be free in your mind. This is the most powerful thing that I can teach you.
Do this and all the other things I mention will become easier and even fun to do.
#2 Create a Financial Freedom Account or Jar
In order to become financially free you need an account or a jar to put in your money to invest. These investments will give you investment income or passive income. So set up a bank account or label a jar in your home with Financial Freedom Account (FFA) and put some money into it. It doesn’t matter how much.
When I started out, I had a plactic jar with a lid that was labeled FFA for Financial Freedom Account. I put $0.l0 in it everyday.
I have a high yield savings account that is also a Financial Freedom Account, as well as a brokerage account at Schwab. I put money in both accounts twice a month.
#3 Pay Yourself First (at least 10% of your income)
If you are doing the first 2 steps this step will be easier. In this step, you figure out 10% of what you are earning and put it into your Financial Freedom Account or jar.
If you make $2,000/month you put aside $200/month.
If you get a $100 gift from a friend, you put aside $10.
If you have payroll and can do an automatic deduction into your financial freedom account then do that.
If you have a 401K that is matched by your company then have them put aside the amount to get the match. For example, if they will match up to 5% of your income, then put aside 5% and get the match. That’s already a 100% return on your investment! If it is less than 10% then put aside the rest into a Financial Freedom Account.
When I started out I had a jar and I would break up a dollar a day, and always paid myself $0.10 first.
#4 Track Your Financial Freedom Account or Jar Account
Now that you have a Financial Freedom Account or Jar, it’s time to track your progress. In a spreadsheet or in a journal, list out each month how much money you have in this account. Update this number monthly.
If you have more than one Financial Freedom account then list each one with the monthy total, and then total them all together.
For example:
$5.60 Financial Freedom Account Jar
$200 Financial Freedom Account Savings
$100 Financial Freedom Account TreasuryDirect.gov
$679.22 Financial Freedom Account Schwab
$984.82 TOTAL FINANCIAL FREEDOM ACCOUNTS
#5 Track Your Passive or Investment Income
Now that you have a Financial Freedom Account, you have passive or investment income. This is income that you are making off of your investments.
Now total up all of the passive or investment income and write in your spreadsheet or journal every month.
For example:
$0.83 Savings Interest
$1.35 TreasuryDirect.gov
$4.54 Schwab
$6.71 TOTAL PASSIVE INCOME
#6 Track Your Spending
Now you get to find out more about how you spend money. In a spreadsheet or journal write down everytime you spend money and how much.
I keep a spreadsheet and update it with my receipts.
For example:
1/1/24 $20 FFA Savings
1/1/24 $50 FFA Schwab
1/2/24 $35.63 Groceries at Safeway
1/4/24 $20 Gift for Funeral
1/14/24 $10 Tithe to Church
1/16/24 $1 School Donation
1/25/24 $190.30 Costco Groceries
1/30/24 $60 gas Hele
1/2024 $386.93 TOTAL SPENDING
From my spending example I can see that in order to become financially free I need to make at least $386.93 in passive income.
#7 Track Your Income
Next, list out every time you get income and total it for the month.
For example:
1/5/24 Xmas Gift $20
1/15/24 Salary $1,532
1/18/14 Money Found on Street $0.11
1/22/24 Recycling $2.58
1/30/24 Salary $1,532
1/2024 Passive Income $6.71
1/2024 TOTAL $3,093.40
#8 Earn More Than You Are Spending
The next step is to focus on earning more than you are spending. You will be able to this by finding more ways to earn money and cutting your spending. Tracking your spending and income will naturally allow you to see your financial behaviors and make your own decisions on the best approach.
You might decide to cat sit on the side, or pick up a part time job. You might decide to stop eating out for lunch and bring a lunch instead. You may decide to stop buying drinks and just drink water. As you track, you will naturally have the right ideas and strategies come to you.
#9 Create Savings Account For Spending
Once you complete step 8, and you earn more than you spend, you will have extra money to save. Perhaps you want to buy a new or used car? or go on a vacation?
Start a savings account and label it “Savings for Spending”.
That way, you know that the money you put in this account is for spending purposes. One strategy that I’ve used is to put 10% of your income into this account.
Once you get good at saving for spending, the items you buy will also cost much less. The reason is when you buy in cash you can often bargain the price down. In addition, you won’t charge it to a credit card where you might end up paying interest.
#10 Create Savings Account For Buffer Account
Create another savings account that is a buffer account, in case you need extra money or your income runs dry. Say your car needs major repairs of $3,000. You can borrow from your buffer account to pay the expense and then pay the account back over time.
It’s good to build up at least 3 month’s income in this account, though many have recommended up to a year’s income.
#11 Invest In Passive Income Generating Assets
Finally, invest your financial freedom account money in passive income generating assets. Examples would be stocks and bonds. Treasury Direct has treasury bills that pay over 5% interest.
You can also lend money to businesses in the form of bonds and some pay as high as 10% at the time of this writing.
Real Estate and businesses are also potential passive income generating assets. Real Estate Investment Trusts allow you to invest in real estate without having to run the business yourself.
If you need help getting started I would take the 7 Day Financial Freedom Challenge.
Conclusion
I hope you use this list of 11 Things You Must Do To Become Financially Free in 2024. I wrote them in a particular order, placing the mental practice first. Second to that is creating a financial freedom account and conditioning yourself to pay yourself first.
When you become financially free you have to value yourself, your time and your money. This is a practice that you do daily and involves the mental work of step #1 and creating the habit of paying yourself by funding financial freedom accounts.
The steps after help you see where you are financially and then have the information you need to make better financial decisions.
The savings accounts help you organize your money and be prepared for situations that may arise that you don’t plan for. Organization is very important to Financial Freedom. You will find that the more organized you get the better your financial life will become.
Finally, investing in passive income generating assets will give you the income you need to be financially free. I put this step last because usually beginners have nothing saved up, and are in no position to begin investing right from the start.
However, if you follow the steps in order you’ll be happy to see the progress you make. Even if you only follow step #1, you will change your life and create the Financial Freedom you want.
Good luck and let me know your progress in the comments!