The first step to financial freedom is to take control over your money and your spending. Most people never fully develop or appreciate the discipline and emotional control required to become financially independent. By developing good habits around money you will get the results you seek and open yourself to another level of freedom and choice. Your financial plan starts with a budget and your savings account must be the first to be paid. Develop the habit of saving some portion of any income each month. This is the most important mindset and habit to develop on the road to financial freedom. Once you set aside your portion, you can divide the rest for necessary items and hopefully have a portion left for discretionary spending. You must always find a way to spend less than you earn. If you have no income you must figure out a way to live for free. That is the most extreme example. Once you have income and you have set aside a portion to save, then you can take on other expenses. Obviously this points to the importance of income and the importance of pursuing a source of livelihood that meets your needs and talents.
Making a budget is the simple act of making a plan for your money. Success starts with having a plan. Following the plan is another matter, but you must start here. Without a plan, it is too easy to lose track of spending and too easy to spend carelessly and waste opportunity to achieve your goals sooner. Freewheeling spirits often resist the constraints that a budget seems to impose, but ironically the freedom from financial stress and worry that this process creates over time will release tremendous mental energy and capacity to live more spontaneously and freely.
Budgeting involves assigning money to spending categories. Again, the first category should be savings. Obviously, you must know total income and expenses to begin to break down each category. This becomes more challenging when your income is variable, but in that case the budget should be based on your minimum expected income in any monthly period, or minimum total anticipated income for a year averaged over 12 months. The less certain you are about income, the more flexibility must be built into the budget. By building the budget based on a lower than expected income, you will anticipate necessary expenses and have flexibility to save more and have more discretionary spending when your income exceeds expectations. A good budget will be realistic and include not only the necessary expenses but some room for things like entertainment, dining out, and other more optional or fun categories. It will also build in some flexibility for unanticipated changes that can and do occur.
Beyond categories, budgeting involves tracking and goal setting. Tracking spending helps you stick to the plan, and goal setting helps motivate you to continue. Having budgetary goals and reviewing them daily though tracking prevents unnecessary spending and makes the emotional control needed to gain financial peace much easier to achieve. Until your finances are running smoothly and automatically, this daily tracking exercise will help you form good money habits which over time will move you toward your goals more directly. There are numerous tools available which make budgeting easy. You should utilize one to make the process simple. These tools will help you set up the budget categories, assign your money to each category, track your income, expenses and spending, and help you set goals. They will also help you track progress toward your financial goals and help automate your banking and bill paying which will free you to focus more time on the things that matter most to you. In this case, as with others, a little discipline goes an long way toward enhancing freedom and relief of suffering.