13 financial freedom mistakes you don’t know you’re making and how to fix them today. Live a frugal lifestyle the way Dave Ramsey teaches by staying in your budget, saving money, and prepare for the future – don’t make these mistakes!
Doesn’t a life free of financial woes, regardless of how much you work, sound amazing?
How can you live such a life? By achieving financial freedom!
Investopedia defines financial freedom as having enough cash, investments, and savings to afford the desired lifestyle without being driven to earn a certain amount each month or year.
While financial freedom isn’t easy to achieve, the methods to achieving financial freedom are simple. Unfortunately, most people make a combination of the mistakes below which hinders them from living worry free.
Stop making these 13 financial freedom mistakes and start earning your freedom!
Hey everyone, I’m Emily!
Don’t miss our post on the 7 simple steps to financial freedom.
13 Financial Freedom Mistakes
1. You don’t have high interest saving and checking accounts
You can correct this financial freedom mistake right now! Once you do, you’ll double the interest earned (bank dependent).
If you don’t already have a high interest savings account or checking account, call or visit your bank. Ask them to switch your current accounts to a high interest or performance account.
Fill up your savings account by using these three simple tips.
2. You haven’t invested in high dividend stocks to ensure financial freedom
High dividend stocks will provide you a monthly or quarterly income for doing nothing more than holding that stock.
Now, like mistake number one, this step will not make you oodles of cash instantly, but rather you will accumulate dividends over time.
Before you start investing, do your research! Not every stock or fund will suit your financial strategy, your goals, or your values. Just don’t make any of these beginner investing mistakes!
Our favorite way to invest in stocks is using Robinhood, which is completely free to use. And you’ll get a free stock when you sign up!
3. You aren’t using Ebates
For example, you can get up to 5% cash back on Amazon simply by clicking through to it via Ebates. Ebates further sweetens the deal by offering double or triple cash back on certain items and services.
Save money online by joining our Facebook group, where we show you how to get name-brand deals on items on Amazon for cheaper than at Target or Walmart!
4. You aren’t using Swagbucks or Receipt Hog.
Both Swagbucks and Receipt Hog are apps that you can download today. Which you absolutely should do, right now, or you’re making a big financial freedom mistake.
Swagbucks provides you with a multi-faceted way to earn money by using their coupons, trying their deals, or receiving cash back.
As for Receipt Hog, this app will PAY you to snap pictures of your shopping receipts. You need to eat right? You must buy things to support yourself and your family? Then this app is for you. Honestly, everyone should have had this app yesterday.
5. You aren’t using Sweatcoin, Achievement, or Stepbet.
We walk everyday. You walk to work, from work, around the house and the store, or maybe you like to run.
Wouldn’t it be great if someone would pay you to walk? Luckily for you, someone will! Get more information in this post here.
Sweatcoin, Achievement and Stepbet are walking fitness apps that will pay you for the steps you take. Not using them is a big financial freedom mistake!
6. You don’t have automatic savings set up to ensure financial freedom
Saving money is hard. The mistake that you are making, however, is thinking about saving in order to get financial freedom.
Instead of trying to remember if you transferred money to your savings account, create an automatic transfer that will automatically shift money from your checking account to your savings account as soon as you get paid.
That way you don’t have remember if you transferred the money or not. You can live within your means without even trying.
7. You haven’t paid down your debt using the snowball method to increase your financial freedom
This financial freedom mistake is the most serious of all. You need to minimize your debt. Not only does it accrue interest, but you receive no return on the money.
Debt can cripple you, but I have an easy and empowering way to fight back, the snowball method.
The concept is simple: pay the minimum amount required on each debt that you have. Then, at the end of the month (or pay period), use what is left of your paycheck to pay extra on the smallest debt until you pay it off entirely. Then, roll the money you used for the smallest debt into your next smallest debt until you have erased your debt.
Learn more about the snowball method here!
The snowball method allows you to work within your pay means while empowering you as you pay off each debt. It isn’t easy, however, since you must funnel your money to your debts. If you stay consistent, however, the snowball method will work.
If you would like to learn more about the snowball method, check out this post on 7 Lessons on Frugality from the Mormons.
8. You don’t have an emergency fund. Two of them.
This financial freedom mistake causes debt. If you don’t have an emergency fund and an accident occurs you have either draw from your savings, your current paycheck, or go into debt/take out a loan. As a result, each unplanned event bites into your goals.
Having an emergency fund, however, means that you already set aside money to pay for unexpected costs and can stay within your budget.
You should set up two. The first should be a “unexpected” emergency fund, as in your car broke down. A good starting amount should be $1,000. After that you can determine how much or little you need.
The second fund should be a long-term emergency fund structured for if you lose your job. Only begin saving for this fund once you have at least $1,000 in your baby emergency fund. The long-term emergency fund should have enough money to cover 3-6 months of normal living expenses.
If you’re looking at planning for the uncertainty in the future, check out this free printable checklist for an emergency 72 hour kit to put in a bug-out bag.
9. You haven’t conducted a budget audit.
Where does your paycheck go? A budget audit allows you to see how much you spend and where you can trim expenses.
To start, use either an Excel spreadsheet or a piece of paper and write out how much you receive each month. Record each purchase you make. Then, at the end of the month, review your spending to see how you spent your money.
You may be surprised at where it goes!
10. You don’t have an accountability buddy.
An accountability buddy is someone who will hold you to your budget and keep you from making financial freedom mistakes. Between the two of you, set up goals and check in points. During those times you will discuss your spending habits and challenges.
Your buddy should be an objective observer and they should help you refrain from making emotional purchases. First mentioned in How to Earn $1000 Using Walking Fitness Apps
11. You aren’t using the cash envelope system.
Immediately after you get paid, budget out how much you want to spend on groceries, going out, etc. Then pull that amount out in cash. Separate the cash into different envelopes. Spend accordingly, but once you finish an envelope you’re done.
Not using cash is a huge financial freedoms mistake.
Learn more about the cash envelope system and other budgeting methods here
12. You aren’t using a cash back credit card.
To start, only use a credit card to pay for things that you already can afford. NEVER buy something with the money you believe is on its way. Until it hits your bank account, you don’t have it.
If you must use a credit card, you should use a cashback credit card. When you use it, you will receive a percentage of your total back. Most credit cards offer various options as to how you want to receive your money.
For example, my bank allows me to either use it to pay off that’s month’s bill, transfer it to my checking account, or transfer it to another person.
13. You aren’t investing in your future.
This mistake is twofold. The first involves saving for your retirement. If you haven’t already, open a Roth IRA with your bank and set up an automatic withdrawal that coincides with your paycheck.
The optimal amount that you should invest is 15%, however, if that isn’t possible, start small with 5% and work your way up to 15% as you par down your debt.
The second mistake is that you are not investing in yourself. You are the most marketable thing you have. Take classes and earn accreditations to improve your communication and credibility within your field.
Final Thoughts on These Financial Freedom Mistakes
Financial freedom is a lifestyle. Correcting these financial freedom mistakes and living within your means will place you well on the path to achieving your financial goals.
Additionally, don’t forget to be patient. Interest and dividends add up over time. Continue these simple actions every day and watch your nest egg grow.
Happy saving and may the financial force be with you!
And you may also find this post on how to know if you need a new job helpful.
About the author of Financial Freedom Mistakes
Hello! I’m Emily Cooper, and I run the lifestyle blog, booksbourbonandchocolate. I started blogging a little over a year ago and have adored (almost) every minute. Over this past year, I have fallen into the habit of devouring great blogs, such as Saving Talents. In addition to reading blogs, I read books of all genres (I favor historical fiction, poetry, and mysteries). When I’m not reading, I’m either writing, doing yoga, or running. In addition to running, I enjoy hiking and traveling during which I try to sample that area’s bourbon and chocolate.
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