Before we jump into these 7 money habits, what does it mean to live financially free? In the most general sense, financial freedom is having enough money and financial security to comfortably live the lifestyle you desire for yourself, without money stress.

And I like to encourage people to think of financial freedom as something that has levels to it.

You may have an end goal in mind. The end goal for most of us is having enough money and resources to live “the good life” (whatever that means to each person) without having to work (unless we want to). In other words, we’re all aiming to have enough money to eventually retire and live well.

But along the way, there are so many different levels of freedom you can experience. For example, you may not yet have enough money to stop working tomorrow. But maybe you’ve paid off a major debt, and now, you’re freer than you were before!

No matter what your end goal is or what level of financial freedom you’re aiming for right now, here are 7 money habits that can help you to live financially free:

1. Budgeting

Budgeting is all about having a plan for your money each month. You figure out how much income you have to work with. Next, you decide all of the things you’ll need your money to do for you. This includes your needs, wants, saving, and investing. And then you divvy up your money so that all of your money has an intentional job to do.

How does budgeting help you live financially free?

When you have a budget (aka a plan for your money), it really helps you to make consistent progress towards all of your financial goals. That means you’re getting consistently closer to financial freedom.

A budget also helps you stay out of debt, which frees you from the stress of owing money.

And it helps you to spend, guilt-free. That’s because you’ve built spending – including on the fun stuff – into your budget. So you’re free from worrying about if you can afford this or that. You’re free to enjoy spending! 😃

2. Paying off debt

Budgeting flows right into habit #2. When you budget, you have a clear idea of exactly how much you’re working with. And because all your money moves are more intentional, you’re not accidentally spending money or letting money “slip through the cracks.” That’s more money you can use to pay off debt faster.

AND because debt payoff is built into your budget, you’re more likely to tackle debt more consistently.

How does paying off debt help you live financially free?

Debt comes at a price…often a steep one: a little thing called interest. The longer you carry debt – whether it’s a car note, a credit card, a personal loan, you name it – the more interest compounds, causing you to owe even more. (And credit card’s have notoriously high interest rates! 😱)

When you pay off and avoid debt, you’re free from all that interest eating into your hard-earned money. You’re free from debt stress. And you’re free to spend the money that once went towards debt on things that actually bring you joy and contentment in life.

3. Spending less than you make

This may seem like a simple concept. But with the lure of credit cards, it’s very easy to end up spending more than you actually earn. Budgeting helps with this habit, too. (Are you noticing a pattern? 😏). When you budget, you’re being strategic with your money, which helps ensure that you’re spending less than you make.

How does spending less than you make help you live financially free?

When you spend less than you make, that means there’s money left for you to save and invest. Saving and investing are hugely important in achieving financial freedom, which brings me to the 4th habit…

4. Saving consistently

When it comes to savings, the most important thing to save is a solid emergency fund. A rule of thumb is to have at least $1,000 saved up. But a fully funded emergency fund is enough money to cover 3 to 6 months of essential living expenses. That way you're prepared for a worst-case scenario.

And there are endless possibilities of other things you could save up for. Holidays, vacation, a car, etc. It’s a great idea to think through the more expensive things in life that are important to you, so you can create savings funds for each of them. And, of course, you’d include each of these things in your budget (surprise!), and that would help you to save consistently.

How does saving consistently help you live financially free?

As far as an emergency fund goes, oh man, can it bring freedom! It frees you up from being stressed out when life throws an expensive curveball at you. Your emergency fund ensures that you can afford the unexpected. And, as annoying as it might be to have to pay for that emergency, you’re free from worrying about it derailing your finances.

As far as other types of savings, having the money you need when it’s time is a huge weight off of your shoulders. You don’t have to go into debt to afford the things you love. Having the money to pay for it brings peace of mind.

There’s nothing like going on that vacation that you saved the cash for. You get to enjoy the trip even more! It’s freeing to know that when the good times of vacation are over, you won’t have to head back to reality and be burdened with figuring out how you’re going to pay it off.

And as a personal example: It was important to my husband and me for us both to stay home with each of our babies when they were born. So we saved up our own “paternity leave fund,” since my husband took 3 months of unpaid leave each time. We used that fund to essentially pay ourselves and cover our expenses. Because we saved, we were financially free to prioritize our family in the way we wanted, without having to be stressed out about money.🙏🏽

5. Investing consistently

We’ve all got those long-term goals we’ll need money for. Most of us have no intention of working until we die. That’s for the birds, am I right? 🐦 So having enough money to retire and live well is a common long-term financial goal.

If you have kids, you may also be focused on having a good chunk of change to pay for college.

Or maybe you’re focused on building wealth in general.

When it comes to these goals that are far off but require a LOT of money, investing is key. Investing gives your money the opportunity to earn more money and grow exponentially over time.

How does investing consistently help you live financially free?

Of all the habits, I feel like this one speaks for itself when it comes to financial freedom. Investing for retirement gives you the freedom to walk away from working when you want to and still live comfortably. The freedom to stop trading your time for money is huge!

Investing for your child’s future education can lead to a few different freedoms. Depending on how much you’re able to save up, it could allow your child to make a college decision free from financial concerns. And you’d be doing your child a huge favor by helping them stay free from student loan debt. It can also be freeing for you. You’d be free from stress about how to pay for an expense as major as college!

As far as generally building wealth, I’m not an advocate of wealth for the sake of status or spending just to spend. But I do believe in wealth-building as a means to an end. It brings freedom because it opens up the door to options.

For my husband and me, we know the more wealth we build, the freer we’ll be to live wherever, to focus our time and effort on the things God calls us to, to give more and more generously, and so many other things. Building wealth eventually brings ultimate financial freedom!

6. Spending on things that add value to your life

We live in a culture of consumerism. Companies are constantly marketing to us and persuading us to buy things. It can be hard not to get sucked in. 😵‍💫

On top of that, there’s the whole “keeping up with the Joneses” thing. We often feel pressure to spend on things that demonstrate status in one way or another. We’re tempted to keep up with how others are living or what society expects – even if it’s not what’s valuable to us personally. And seeing everyone else’s (curated) amazing lives on social media doesn’t make it any easier.

But it’s important to spend, according to your own values, on things that you believe add to the quality of your life.

How does it help you live financially free when you spend on things that add value to your life?

When you spend on things that add value to your life, you’re happier with your spending choices. You’re free to truly enjoy the things you spent money on.

Not only that, but if you stick to spending on things that add value to your life, it means you’re not wasting money on things that don’t. You’re not spending on something just because some ad made it seem really appealing or because of what other people think. It’s freeing not to live by other people’s standards and expectations. Plus, it frees up your money to be used in other ways (things like saving, investing, giving, etc.).

And speaking of…

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7. Giving

The last money habit I want to touch on is giving. I’m a firm believer that whether you’re in a place where you have a lot or a little, if you are able to give and be a blessing to others, you should (with the right heart, of course).

And there are so many ways to give:

Giving of tithes and offerings to honor God and sow into your church community (which flows into the local, national, and even international community)
Giving to organizations that help support those in need
Giving to help people you come across who are going through a tough time
Or even giving to people you know just because it’ll bless them and you love them ❤️

How does giving help you live financially free?

It may sound counter-intuitive. It would seem that giving leaves us with less than we started with, right? But giving helps you live financially free in a few different ways.

For one, giving helps you not to become too attached to your money. When you’re too attached, you run the risk of looking to your money as the source of your security instead of as a tool that helps achieve security. Practicing giving can promote a healthier relationship with your money, and there’s freedom in that.

Giving can also lead to financial freedom because you reap what you sow. I’m thinking of a few different scriptures in the Bible that reiterate this point:

“One gives freely yet gains even more.” (Proverbs 11:24)
“Give, and it will be given to you – a good measure, pressed down, shaken together, overflowing, will be given into your lap.” (Luke 6:38)
“Whoever sows bountifully shall also reap bountifully.” (Corinthians 9:6)

On top of this, it just feels good to bless others. It really does add to the quality of your life in a way that can’t be measured in dollar amounts but that truly is invaluable.

Conclusion

We all want to live financially free – to have enough money to live well, without financial stress or strain. The 7 money habits discussed here can help you achieve financial freedom and live your best life, now and later.

What are some other money habits that can help you live financially free? Share in the comments below!

7 Money Habits That Will Help You Live Financially Free