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The Eight Steps To Financial Freedom

Hanging_18_finishedYour Creator wants you to be financially free. “The borrower is slave to the lender,” the Bible says in the book of Proverbs. In the book of Leviticus, God tells the Israelites that every forty years they must set all slaves free and forgive everyone of any debt they have against them.

In the New Testament, Yeshua says that when you give to others, “it shall be given unto you, good measure, pressed down….” The apostle Paul wrote about the principle of sowing and reaping. While those two scriptures can be interpreted to go beyond finances, they are first and foremost illustrations about how God wants His people to prosper financially.

I am not talking about becoming the next Bill Gates – although I don’t think to have that much money is evil. I am not talking about being a miser who never shares his wealth. I am talking about being financially free: without any debt, plus enough extra to be able to, number one, share; and number two, do whatever it is you feel that God is calling you to do.

Yet, many – most? – Western believers are in debt. They live paycheck to paycheck. They rarely give, because they believe they can’t afford it.

If I just described you, I want to help you change your situation. And I can, because my husband and I have been completely free of debt for several years – including owning our home free and clear.

Gaining financial freedom will require time, effort, and some sacrifice, but anyone can follow the steps to achieve it. So here they are, the eight steps to financial freedom.

Step One: You have to really want it.

When you really want something, you go after it. You don’t make excuses. You don’t let life’s unexpected events serve as permanent obstacles.

Before you begin the journey to becoming financially free, you need to have a burning desire to achieve that goal. Or when life happens – which I can guarantee that it will – you will give up.

Step Two: Get out of debt.

I once read the first part of a book that supposedly taught people to be wealthy. In the very first chapter, the author started to explain how people can use a credit card to grow wealth.

I quit reading the book. That was the worst financial advice I’d ever heard. Debt equals slavery. Wanting – and having – more stuff than fulfills you equals slavery.

Do you think being a slave is God’s best for  you? No? Good! Now that we’re on the same page, here are the basic steps to becoming debt-free.

*1.  Set up an emergency fund. Save up anywhere from $500 to $2,000, depending on your particular life circumstances (such as how big your family is), and set the money aside as an emergency fund. That way, should an unexpected expense arise while you are trying to get out of debt (and it will), you won’t have to stop paying off your debts – or get into more debt – in order to take care of the expense.

*2. Start with the smallest debt. The reason is that you experience success quickly, and that success will fuel your momentum to continue working to pay off your debt. Many people find that once they are free of two or three of their smaller debts, they get so excited that they redouble their efforts in working to be financially free.

*3. Find an extra source of money. This is the hardest part of debt freedom, because it requires sacrifice.

If your mortgage payment or apartment rent is more than a fourth of your monthly take-home pay, you need to move. If your car is worth half of what you make annually, you can’t afford it. Trade it in for something cheaper.

Have a garage sale. Get a second part-time job. Sell off any non-retirement stocks you may have. If you are serious about getting out of debt – and you need to be if you are serious about gaining a life of freedom so that you can live your dreams – you need to determine to do so as quickly as possible.

*4. Live beneath your means. This debt-freedom step will be more of a sacrifice to some people than others. But living above your means is what got you into trouble in the first place. And living within your means is no help, because if you spend everything you earn, how will you have any extra to pay off your debt?

Some couples turn this step into a challenge, trying to figure out every single thing they can do in order to save money. They turn off the hot water heater whenever it’s not in use, begin line-drying their clothes, always eat at home, start a garden, buy only second-hand clothing. The list can go on and on. If you want even more in-depth ideas about living frugally, you need my book Crazy Simple: 307 Ways To Save Money, Your Health, And The Planet.

5. Use all your extra money to pay down your first debt (remember to continue making the minimum payments on the other debts!). Having followed all the other steps, you should find yourself with ample money at the end of every month. You need to use every single extra cent to pay down the smallest debt. When that debt is paid off, you move on to the next smallest debt, and so on. At some point, you should be able to predict your day of debt freedom. Write it down on your calendar and plan to celebrate.

Step Three: Stay out of debt.

It’s no good getting out of debt if you’re going to turn around and get right back into it. Most people, by the time they pay off the last debt, are in the habit of living beneath their means and love their new-found freedom so much that they will do whatever it takes not to get into debt again.

Some people, however, will struggle. Lifelong habits are hard to break. Here are a few ideas to help you keep from overspending ever again so that you will remain financially free.

  • Seek emotional/spiritual healing. Some people get into debt because they shop or gamble as a kind of self-medication. This happens when they are trying to fill a void. Perhaps they were neglected or abused as a child. Maybe they are angry at God for some reason, so instead of leaning on Him for comfort they seek comfort in things or money. If that’s you, seek help, either professional or Divine. Both would be good. Emotional and spiritual bondage are their own kind of slavery, and you deserve better.
  • If you don’t already have it, you don’t really need it. Make this your motto. You don’t need to upgrade just because the company comes out with a new device. In fact, you probably don’t need the device at all. You don’t need another black sweater if you’ve already got two. I’m not suggesting that we all live austere lives and ignore modern technology. What I am saying is that we need to get free from the mentality that more is better, that more equals happiness. We need to learn to be content with what we have.
  • Stay out of stores. That’s both online and offline. Don’t shop unless you really need something, or are going out to purchase a specific “want” item that you have wisely budgeted for.
  • Wait a week. When you find yourself in a store and see something you think you’d like, but which is not on your shopping list, leave it alone. Go home, and wait a week before buying it. Chances are, by the end of the week you will not even want it anymore – if you remember the near-impulse buy at all.

Step Four: Increase your income.

You may do this during step two, when you are working to get out of debt. It’s really an option, depending on your income and life circumstances, but people who really want to become financially free generally do something to increase their income. Probably the simplest thing to do is to find a better-paying job in your current career. Simple, but not necessarily easy. And with some careers, you are more or less stuck unless you go back to school in order to qualify for a higher-paying position.

This is why many people will take on a second job. This a great choice during the getting-out-of-debt step. But if you continue on in that second job after you are out of debt, you lose what little time freedom you had before you began working to become financially free. Since the whole point of my blog is to encourage you to become free in all areas of life, I am going to discourage you from working more than one job unless absolutely necessary.

So what do you do instead? Start your own business. Three of the most common micro-business models that are working for a lot of people to do are all online businesses: YouTube, blogging, and selling on eBay.


It takes awhile nowadays to be able to monetize a YouTube channel with ads. However, if you enjoy making videos, whether it’s talking about a particular topic or filming steps of how to do a certain thing – or you live an interesting life that you could convert into a three-times-a-week vlog – this business model could become lucrative in the long run.

The main things to remember is to keep your channel to one niche, and to consistently upload quality videos, at least one per week.


Setting up a blog has never been easier. If you can write a couple of one- to two-thousand-word articles in your area of interest or expertise every week, you may thrive with this business model. How do you make money with a blog? Sell the visitors to your blog products or services related to the topic of your blog.

Check out Nick Loper’s “Side Hustle Nation” podcast and blog for some great info on how to get started with a successful blog.

Selling on eBay

Yes, I know there are other auction sites out there, but eBay is the most well-known so I will stick to that one. Many people have been able to quit their day job by learning the skills it takes to be an Power Seller on eBay. Basically, you select a smallish, everyday product that people buy over and over, and dedicate yourself to providing the best customer service ever.

Step Five: Start investing your extra money.

Investing is in the Bible. It is not evil. I’m not going to get into that now, but rest assured that God is not against it.

You don’t have to invest if you don’t want to, but if your goal is to have as much freedom as possible, investing will bring you to that goal much more quickly than not.

And I don’t mean to put all your money in stocks or mutual funds. That’s the scary, risky way to invest – I don’t care what any of the gurus say. In my book Hatching The Nest Egg: Achieve Super-Early Retirement Without Side-Gigs, Gambling, Or An Above-Average Income, I describe two alternate investing strategies that provide a decent cushion from stock market crashes. Those two strategies are the Permanent Portfolio and the Ivy Portfolio.

Should you decide to invest, invest wisely, and invest as much as you can.

Step Six: Figure out your number.

At any point during the process of becoming financially free, you can figure out how much money you need to have invested in order to be able to declare financial independence. A very frugal single person could probably do well with $300,000. A small family would probably want at least twice that.

Figure that you will be able to withdraw around six percent of your investment total per year in order to keep your portfolio from losing its value over a two- to three-year period. Then figure out your annual expenses. Then you’ll be able to determine the total amount you will need in your nest egg.

Step Seven: Figure out your date.

Once you are out of debt, have a relatively steady income, and you know your “number”, you can determine an approximate date of becoming completely financially free, or financially independent. Give yourself at least a six-month cushion because I can almost guarantee you that some major unexpected expense is going to come up along the way. Plan for that, and you will avoid the frustration of your financial growth slamming to a stop.

Step Eight: Keep going.

Every day, commit to live debt-free. Continue to live beneath your means. Give when the Lord prompts you to give…or even when you don’t feel prompted.

In other words, be an excellent steward over your finances. Have dominion over money, don’t let it have dominion over you. That is the long and short of being financially free.

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