How To Budget For Financial Freedom In 3 Easy Steps

Budgeting is the difference between hoping for financial freedom and building it.

As a child, I enjoyed eating guava fruit from my grandmother’s guava tree.  My grandmother’s tree produced yellow and pink guava fruit, the type of guava that you bite into and the juice begins to drip down your chin.  But the guava tree didn’t just produce delicious guava every spring from one day to the next.  My grandmother had to plant the tree first, nurture it, and protect it against insects.  Money works the same way.  Financial freedom doesn’t happen because you manifest it every morning.  Financial freedom happens when a seed is planted, tended, and protected, with intention and consistency. That seed is your budget.  In this blog, I will share three money management principles that will help you do the planting, the nurturing, and the protecting, so that your money can be fruitful and multiply.

Principle Number One: Give Every Dollar a Job (Budgeting Basics)

            Imagine a captain of a ship sailing into the open ocean without a planned destination.  He will be pulled by every wave in every direction.  Your income is no different.  Every dollar you earn needs to have a specific job before it hits your bank account.  A budget is a financial plan that helps you assign a task to your money and monitor how well that task is performed over time.  In the book The Richest Man in Babylon, by George S. Clason, we learn from the main character Arkad that 10% of what you earn is for you to keep.  The 90% that is left of your income is for you to allocate to your everyday necessities and pay down any outstanding debt.

Principle Number Two: Water The Tree (Invest)

As a child, I helped my grandmother water the plants in her garden (including the guava tree) early in the morning before the sun grew too strong. She believed this was best for the plants, and judging by her beautiful garden and fruitful trees, she was probably right. Financial freedom begins when you put your money to work. In the previous paragraph, I mentioned the importance of paying yourself first before anything else is because the 10% you kept for yourself has a very specific task: to multiply and create generational wealth.  Economists call this compound interest (for more about investment strategies and investing fundamentals, visit our services section to learn more about our Group Coaching and The Wealth Transformation Bootcamp).  In addition, prioritizing investments before anything else is the key to ensuring your money grows, which is contrary to common money management practices that view investing as a secondary activity.

Principle Number Three: Protect The Fruits (Pay Your Debt)

            Every spring, my grandmother’s guava tree would flourish so that new guava fruit could be produced and eaten by summer.  This was a very important time for the tree because as the tree flourished, it attracted insects that caused bacteria in the fruit and made the guava unsuitable for eating; therefore, protecting the tree during that time was very crucial.  Similarly, debt is a plague in your personal finances.  Debt stops you from growing and expanding; therefore, if you want your money to grow and produce good fruits, then it is of utmost importance that you eliminate your debt.  For example, one tool that is available for you to use is our debt eliminator, which helps you track your debt, implement strategies for paying down your debt faster, and celebrate debt elimination milestones.  Lastly, your financial garden won't grow on its own, so book a free 15-minute consultation, and let me help you get the first seed in the ground.