Want to know how to gain financial freedom while homesteading? Be free emotionally and financially with these tips and tricks!
How to Gain Financial Freedom While Homesteading
Gaining control of you finances is the single-most important thing you can do as an adult. Having financial security means never having a feel stuck in a bad situation. It means never missing out on a great opportunity because of fear.
My family’s goals are big: pay off my remaining student debt, finance the remaining two(ish) years of my fiancé’s doctorate, pay for our upcoming wedding, and save enough money to make our tiny homesteading goals realities – as well as rescue more animals – as soon as possible.
So how are we, two late-twenty-year olds already caught in debt’s sticky web, going to turn this around and gain financial independence?
Luckily, I’ve got a few tricks up my sleeve.
These tricks have helped us financially survive – and even thrive – through several university degrees, a seven month stint of unemployment, and unexpected large health costs on limited incomes.
Despite some bumps in our road, we’re closely nearing the end of debt repayment, paying off the wedding before it happens, and getting closer than ever to our homesteading goals.
Here are eight ways you can begin to gain more financial independence for your family:
1. Take Stock
It’s simple: before anything else, you need to know where you’re starting out, or, your total actual assets. This number will tell you what you actually own after all things are considered. You can get this number by taking stock of your assets compared to debts. This is easy to calculate. Just consider what you own (cash, savings, investments) compared to what you owe (loans, credit purchases, etc.). For those of us with student debt (or mortgages, car loans) it’s not surprising to find the number is a negative. Don’t panic.
2. Make Goals
What is it you’re trying to achieve with your financial independence? Early retirement? More freedom to travel or start your own business? Whatever it is, figure it out and keep it close to your heart. You’ll need that to keep you motivated when purchase impulses arise.
3. Make a Budget
Having a budget changes everything. It holds us accountable each month. It’s the reason we’ve been able to save money during the past few years while we were both in school full-time. It’s the reason that, despite not being able to find work for a full seven months after I graduated, I didn’t have to defer my hefty federal loans. Of course, other factors in this list played a role, too.
You might be thinking at this point: well, what constitutes a budget then?
A budget is a running list of everything you need to pay (income leaving your house) compared to everything that will be paid to you (incoming entering your house). Remember to add as much as you can for debt repayment into your budget. You can have a daily, weekly, monthly, yearly, etc. budget. We focus on monthly and yearly.
Now, when you’re on a limited income and trying to pay off debt and save money at the same time, every single dollar matters. Ideally, every single dollar should be accounted for – recorded in a budget app, spreadsheet, journal, etc. for you to keep an eye on. More importantly, all the things that are not essential to your family’s well-being should either be reduced to a minimum or eliminate entirely. You’ll need to decide what these things are for your individual family’s needs.
For instance, in one of our budget make-overs, we reduced our dating funds, but didn’t nix them altogether. We’ll go for tea and maybe a treat instead of dinner and drinks. When we’re feeling really frugal, we’ll just have tea at home. Likewise, at different times throughout the years to meet our varying financial needs, we have reduced our gift funds, transportation funds, entertainments funds, self/health-care funds, saving and groceries. See the next point for more on this.
4. Don’t Make Promises You Can’t Keep – Or That Will Cost You Later
Even when making a budget overhaul, there are still some core basics that shouldn’t be eliminated. Here are three areas of your budget that you shouldn’t feel bad allocating money too:
- Healthy Groceries
- Self/Health Care
First things first is you and your family’s well being.
And yes – even when paying off debt, we make a budgetary allowance for saving each month. This has, at times, acted as buffer margin when we’ve had unexpected costs arise.
Now, for some families, the above list will include a reliable vehicle. For ours, we’ve found we can get by with public transportation and a few taxi cabs each month. In cost-to-cost comparisons. we save thousands of dollars each year with this method.
5. Leave Wiggle Room
Things happen – and they typically come with a big price tag attached. Don’t let something unexpected throw your family for a financial loop. Set aside some of your total assets for emergencies. If you don’t have anything to set aside, this is the first thing you’re saving for. Your family should ideally have 3-6 months worth of basic living expenses (rent/mortgage, bills, food, etc.) set aside in case of job loss, disaster, accident, etc. Also consider over-budgeting a little each month if possible to afford some room for rising prices, unexpected needs, and extra savings.
6. Get Insurance
Plain and simple, insurance provides a safety net in similar ways that saving do. Thus, having insurance takes away some of the demand for emergency funds. That being said, financial independence demands personal savings. Have both.
7. Cut Unnecessary Costs
In addition to sticking to your budget you create, you need to work on avoiding unnecessary costs. This will help you create money without having to do much at all. Take a look at your family’s spending habits: is there room for improvement?
Remember: Becoming evermore self-sufficient and self-reliable is a great way to gain more financial independence.
Some ways we’ve cut or avoided what we’ve deemed as unnecessary costs:
- We unsubscribed from cable, replacing it with Netflix
- We chose public transit over purchasing and maintaining a vehicle
- We grow as much food in our small city garden as we can
- We have reduced the amount we eat out at restaurants considerably
8. Finally: Increase Your Income
I know, I know, it’s not easy – but neither is being stuck in debt repayment! Ask yourself this and answer honestly: is there any way you or any of your family members can being even a little extra income into your household? Cleaning, care-working, freelancing, crafting, growing and selling food, and hand-making and selling products are just some of the endless options.
Earn more money homesteading! Get some tips from TexasPrepper2 on how they run a successful homestead business raising blackberries:
What do you think of these financial freedom tips? Let us know in the comments section what your thoughts are on how to gain financial freedom. Will you give it a try? Let us know how it went and share your experience with us in the comment section below.
Have any homesteading projects you’d like to share? Share it with us an we’ll give it a try. We’d love to know what you think!