5 Steps to Financial Freedom

Better Investing

What's Hot

2 Types of Black Marks Might Vanish From Your Credit File SoonBorrow

6 Ways the Obamacare Overhaul Might Impact Your WalletInsurance

7 Dumb and Costly Moves Homebuyers MakeBorrow

This Free Software Brings Old Laptops Back to LifeMore

Obamacare Replacement Plan Gets ‘F’ Rating from Consumer ReportsFamily

Beware These 12 Common Money MistakesCredit & Debt

21 Restaurants Offering Free Food Right NowSaving Money

17 Ways to Have More Fun for Less MoneySave

House Hunters: Beware of These 6 Mortgage MistakesBorrow

30 Household Uses for Baby OilSave

25 Ways to Spend Less on FoodMore

Nearly Half of Heart-Related Deaths Linked to These 10 Foods and IngredientsFamily

5 Surprising Benefits of Exercising Outdoors in WinterFamily

10 Ways to Save When You’re Making Minimum WageSave

Boost Your Credit Score Fast With These 7 MovesCredit & Debt

7 Painless Ways to Pay Off Your Mortgage Years EarlierBorrow

The Most Sinful City in the U.S. Is … (Hint: It’s Not Vegas)Family

The True Cost of Bad CreditCredit & Debt

10 Companies With the Best 401(k) PlansGrow

This Scam Now Tops ID Theft as the No. 2 Consumer ComplaintFamily

6 Stores With Awesome Reward ProgramsFamily

6 Ways to Save More at Lowe’s and The Home DepotSave

6 Healthful Treats for Your DogFamily

New Study Ranks the Best States in the U.S.Family

Thousands of Millionaires Moving to 1 Country — and Leaving AnotherGrow

Strapped for College Costs? How to Get the Most From FAFSABorrow

6 Overlooked Ways to Save at Chick-fil-AFamily

Ask Stacy: What’s the Fastest Way to Pay Off My Mortgage?Borrow

Where to Sell Your Stuff for Top DollarAround The House

8 Ways to Get a Good Price on a Shiny New AutoCars

Ask Stacy: How Do I Start Over?Credit & Debt

Secret Cell Plans: Savings Verizon, AT&T, T-Mobile and Sprint Don’t Want You to Know AboutFamily

30 Awesome Things to Do in RetirementCollege

14 Super Smart Ways to Save on TravelSave

The Rich Prefer Modest Cars — Should You Join Them?Cars

You’ll Soon Pay More to Shop at CostcoSave

10 Ways to Save When Your Teen Starts DrivingFamily

Remember the goal -- to live comfortably, fulfill your dreams and live without anxiety about the future -- and learn how to get there.

We write a lot about saving money, making money and spending it or investing it wisely. It’s easy to get stuck in the weeds and forget the ultimate goal. So here’s a reminder: The goal is to achieve financial freedom — the ability to live comfortably, fulfill your goals and live without anxiety about the future.

To that end, here are five steps that you can develop into habits to reach financial freedom:

1. When spending, ask yourself why

Before plunking down a fat stack of cash or swiping that card, stop for a moment and think. Are you getting something you need or a tool that helps you achieve your goals, or are you buying a status symbol that serves little purpose but to compete with the friends or neighbors? How much do you need it? How much will you enjoy it? How much does it improve your quality of life? This line of questioning will help you resist or delay spending money that you could instead save or invest for your longer-term goals.

If you’ve decided to make a purchase, commit to memory some of these easy ways of getting the best possible price:

2. Invest a portion of your savings for growth

Invest a portion of your savings so that it can outpace rising prices. That said, don’t try to pick stocks or time the market. For most of us mere mortals, that is folly. Instead, find a low-cost mutual fund, like the Vanguard Index Fund, which spreads your money across a broad swath of companies to track the market as a whole. By doing it this way, you won’t drive yourself crazy trying to manage individual stocks or take an unreasonable risk on any one asset. You can select funds for the degree of risk (and potential profit) you are comfortable taking and then adjust your risk downward as you get closer to retirement.

Here are a couple of good articles on investing safely for the long term:

3. Pay down debt

Money that costs you money needs to be tackled with determination and strategy. If you have a credit card or other balance that carries a very high interest rate, pay it down as aggressively as you can, while keeping up with minimum payments on other debt. If the rates on your various cards and other debt are roughly the same, you can try another approach that some people find very motivating: They “snowball” debt by paying off the lowest balance first (while always keeping up with minimum payments on other debt) and then taking the amount that had been used for that now-closed account and applying it to pay down the next-lowest balance debt, and so on. Here are some more ideas on tackling debt:

4. Carve away expenses

Most of us have regular expenses that we can eliminate or reduce simply by slowing down long enough to think about it. A place to start is to make a budget — made easier by budget software that allows you to track your spending and your goals. We recommend our partner PowerWallet, but there are many alternatives. Then you are in a position to consider where you can cut your costs. Do you really need that fancy cable package, are you even using your gym membership anymore, and is it possible to cut down on a habit, say smoking or triple lattes?

The key is to be somewhat systematic about this task. Once a system is in place, it will be a whole lot easier to keep spending under control.

Here are some more thoughts on the subject:

5. Build an emergency fund

There will be emergencies. You can count on them even if you can’t predict what form they will take. So you want to be sure that you don’t have all of your money tied up in ways that make it hard to get at. For peace of mind, build a cash reserve at your bank or credit union that you can draw on if things go sideways at work, you’re faced with a dental emergency or whatever life throws your way. Ideally, you can pull together enough to cover six months worth of expenses, but of course, you have to start somewhere. A month’s worth is better than nothing. Here is more on how to make it happen:

How to Prepare For and Deal With an Income Emergency

That’s it! Read these tips, take in more details in MoneyTalksNews articles, and start heading for financial freedom.

What steps are you taking towards financial freedom? Share with us in comments below or on our Facebook page.

Stacy Johnson

It's not the usual blah, blah, blah

I know... every site you visit wants you to subscribe to their newsletter. But our news and advice is actually worth reading! For 25 years, I've been making people richer without making their eyes glaze over. You'll be glad you did. I guarantee it!


Read Next: The 10 Commandments of Wealth and Happiness

Check Out Our Hottest Deals!

We're always adding new deals and coupons that'll save you big bucks. See the deals to the right and hundreds more in our Deals section.

Click here to explore 2,041 more deals!