How To Manage Your Money For Financial Freedom

Are you ready to achieve financial freedom?

Financial freedom is all about taking control of your finances. I believe that anyone can transform their financial situation.

However, if you don't have a healthy relationship with money, you'll continue to encounter money issues.

In this blog, I share a simple method for managing your money for financial freedom.

If you are tired of living paycheck to paycheck, you'll want to read this.

Watch the video below:

(Click here to watch on YouTube)

Do you want a copy of my FREE money management spreadsheet for creating financial freedom? CLICK HERE to download it!

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You can't earn your way to financial freedom.

A lot of people can earn a lot of money, but they don't know how to hold on to it. As a result, they fall into debt. I can relate to this. There was a time in my life where I was in a lot of debt. I didn't have a system or a method for managing my money.

I had money coming in, but I was freely spending it and not paying attention to where it was going. When I received my credit card statements every month I realized that I was spending more than I could afford. Even worse, I continued this behavior and kept digging myself into a financial hole.

It wasn't until I learned how to manage my money that I finally felt in control of my finances. I'm going to share a money management system with you that I used to get myself out of debt and achieve financial freedom. You can apply this system easily to your financial situation.

The habit of doing this exercise is more important than the amount of money that you have in the bank. If you can't manage the money that you have right now, you will not be able to handle larger sums of money.

Watch the video above where I share my computer screen and walk you through the money management spreadsheet that helped me achieve financial freedom!

Money Management Method – The JARS System

I learned a simple, yet powerful money management method from T. Harv Eker. In his book, Secrets of the Millionaire Mind: Mastering the Inner Game of Wealth he teaches you how to manage your money for financial freedom. He suggests that you break down the money that you make and your expenses into six jars or categories.

Category #1 – Necessities (55% of your income)

These are things like your rent, mortgage, utilities, groceries, gym membership, car payments, phone bills, etc. You want to make sure that 55% of your income is going towards the things you need every day to live your life.

Category #2 – Fun (10% of your income)

It's important to focus on your goals, but you also want to make sure that you're enjoying your life. This is your play money for activities that you enjoy, like dining out, traveling, or pampering yourself.

If you're enjoying the benefits of your money, you will link pleasure to the process of having money. In short, having fun will motivate you to make more money.

Category #3 – Education (10% of your income)

A lot of people settle for whatever amount of money that they make. They don't aspire to achieve more. Saving money can be hard, but when you take the time to learn about money and invest in yourself, the process can be enjoyable.

I believe in the power of education. Investing in myself has been one of the most important things that I’ve done that have contributed to my success in life. In the words of billionaire investor Warren Buffett, “Ultimately, there’s one investment that supersedes all others: Invest in yourself.”

One of the best ways to improve your finances is to learn from others who have achieved the success that you desire. You can invest in their knowledge and learn directly from them. This knowledge can be consumed in the form of books, seminars, mentors, and coaches.

Category #4 – Long-Term Savings (10% of your income)

This is your “emergency fund” money that you don't touch. You never want to be in a position where a crisis hits and you have zero savings.

Ideally, you want to make sure that you have 3-6 months' worth of your expenses put aside in a savings account for emergencies. Also, you want to allocate a certain percentage of your income to a future goal that you want to achieve, like buying a home.

Category #5 – Financial Freedom (10% of your income)

This involves taking a percentage of your money and investing it into assets that can appreciate over time. This could be investing in cryptocurrency, building an online business, developing an app, or building a YouTube channel or blog.

There are so many investment opportunities available to you. However, if you don't put aside money for your freedom, money won't magically fall into your life. If you have to cut back on your necessities to put money aside for your freedom, do it. Otherwise, there is no possibility of achieving financial freedom.

Category #6 – Contribution (5% of your income)

This could involve giving a portion of your earnings to a charity or giving money to the homeless. Not only is contribution great for others, but it's also important for you. Authentic fulfillment comes from contributing to others.

It trains your brain to operate from a place of abundance rather than scarcity and fear. When you have your hands open to receive, more good things will flow into your life. However, if you're worried to give anything away, you cannot receive more.

Wherever you are starting from is OK.

We all start somewhere. However, you will never get to where you want to go if you don't know where you are. You want to create your personalized money management system based on your current financial situation.

As an example, if you go through this spreadsheet exercise and realize that 90% of your income is going towards your necessities, that means that you've got no money left for the other categories that I shared above. If this is the case, you've got to get creative and figure out how you can lower your necessities.

It comes down to determining which of the categories you can't afford to do right now, in the pursuit of achieving financial freedom. At the beginning of my entrepreneurial journey, I was willing to sacrifice fun because freedom was more important to me.

In my opinion, staying consistent with your education is critical. If you don't grow, you'll stay stuck. Your income is in proportion to your level of personal development. The more that you develop yourself, the more money that you'll make.

This is how to manage your money for financial freedom.

I hope that this money management system proves to be as life-changing for you as it was for me. Listen, I know what it's like to struggle financially.

However, your past financial mistakes do not have to define your future. Take ownership of your mistakes, learn from them and focus on creating the financial freedom that you desire and deserve.

Do you want a copy of my FREE money management spreadsheet for creating financial freedom? CLICK HERE to download it!