The 2 Most Important Steps To Financial Freedom

by Chris Tecmire


Have you ever wondered where all your money went?

Years ago I would check my bank account and be shocked by how little was left.  I had just deposited my check 3 or 4 days ago!  And yet I would leave myself searching for ways to pay bills and buy food the rest of the week.  Where did it go?!

Here are my theories:

1.  Some sort of bank teller conspiracy.  They obviously target certain customers who don’t seem to be paying too close of attention and then skim 20% off the top of each of their deposits.  Did they get you too?

2.  My bank is routinely being robbed, but doesn’t like the bad publicity, so it keeps it quiet and doesn’t tell the rather dim-witted customers like myself.

3.  The Leprechauns are at it again.

I can’t say I know for sure, but I’m leaning heavily toward #3.

No, in all seriousness, as much as I’d like to blame the little men from the forest, I have no one to blame but myself.  And I know that now.  But, at the time I could never quite grasp what I was doing wrong.  I was making pretty good money and had fairly limited bills and responsibilities.  So, why did I struggle?

The answer: I was just “winging it”.  In other words, I was guessing at my expenses.

I would spend $20 here and $20 there, but never spent more than $100 at a time, so I thought I was being good.  Some of my friends were buying big screen TVs and expensive concert tickets, but I wanted to be “smart” with my money.

Did you know that five $20 purchases still add up to $100?  Oops.

Believe it or not, I had always been pretty good in math, so I was aware of this too, but since I never kept track of what I was spending, I lost track easily.  My mind was playing tricks on me, convincing myself that I was being thrifty, when really I was nickel-and-diming myself into debt.

What about you?

Have you ever wondered where your money went or been surprised at how quickly it left your pocket?

There is a very simple answer.

You can solve that problem forever by just creating a monthly budget and then sticking to it.

In my humble opinion, budgeting and tracking your expenses are the 2 MOST important steps to financial freedom (outside of starting the next Facebook or Google, of course).

You can’t do anything else that will teach you more about your finances or save you more money over the long run.  It instills a mindset of accountability that will serve you well for the rest of your life.  It’s very difficult to overspend when you’re paying attention.  It’s only when we either ACT ignorant or ARE ignorant that we overspend.  The first option is willing ignorance where you decide to turn a blind eye and take the “ignorance is bliss” approach (it’s only bliss for so long), and the second one is what I use to be.  I didn’t know how to stop the constant outflow of cash because I didn’t realize where it was coming from.  I was still blaming the leprechauns.

Isn’t it odd that we know EXACTLY how much our salary is, but often have no idea how much we spend.  That just seems a little backward to me.

So, take the 1st step to financial freedom and create a monthly budget.  It’s pretty easy.  Even if you already have a budget, do it again.  Take this opportunity to update your income and expenses, and make sure you’re not forgetting anything.

I’ve provided a simple template that you can use if you wish.  You can download it here – SFF Budget Worksheet

You could also choose to use free software like  Though I’ve never used it, it’s free and I’ve heard good things.  It’s just a little more complex than I’m looking for, though I believe it’s also a little more automatic once you get everything set up.

I suppose there’s also the tried-and-true napkin if all else fails.  Just do something.

If you’re using the spreadsheet I’ve provided, you just need to fill in the blanks.  Many of the categories may not apply to you, but I wanted to be as all-inclusive as possible, so if they don’t apply, just leave them blank.

Take a look at the quick video that follows for more detailed instruction concerning the budgeting spreadsheet.

So, you’ve made your budget…now what?

Now you need to stick to it.  A budget is essentially a goal, and a goal is rather worthless if you don’t follow through – or have any idea whether you actually achieved it or not.

There are 3 steps to every goal:

  1. Create a plan.
  2. Follow through with the plan.
  3. Track your progress to know when you’ve achieved your goal.

Creating a budget is step #1.  Now you’ve moved on to the final two steps.  Tracking will help you with both.  The follow through will be aided by simply keeping yourself in line with the budget, along with learning new ways to save money on Simple Family Finance and any other educational tools at your disposal.

There are several ways to track your expenses:

1.  Only keep track of the variable expenses.

Some of your expenses each month will be fixed.  For example, your TV or internet bill is most likely identical each month.  Therefore, we would consider it “fixed”.  Other examples could include your mortgage or rent payment, car insurance, and loan payments.

So, if those payments are identical each month, you could choose to only track the more varied expenses like food, entertainment, gas, etc.  These are the categories that can get out of hand in a hurry, so it’s ALWAYS important to keep tabs on these in particular.

2.  Keep track of all of your expenses.             

This is what I do.  My reasoning:  Why not?

The benefit is that at the end of the month I have a detailed look at every cent that left my family’s accounts.  That kind of knowledge can only help me in my quest to save money.

Plus, the cost is VERY minimal.  You’ll need an extra 10 seconds or so to record your mortgage payment and your car insurance.  You may not think so, but you can spare 10 seconds.  I’m sure of it.

No matter what you decide, I recommend utilizing your credit card and bank account statements each month to make sure you haven’t missed anything.  Obviously, this method leaves out cash expenses, so those are the most important purchases to document immediately.  Once you forget a cash expense, it’s probably gone unless you have a MUCH better memory than I do.  That’s why I plug my expenses for the day into the spreadsheet each evening – even a stick of gum.  And once I get my various statements from the bank or credit card companies, I’ll quickly double check what I recorded to make sure I have everything covered.

I’ve includes a simple spreadsheet that you can use to track your expenses.  You can download it here – SFF Expense Tracking

Also, here’s a quick video explaining how to use it.

If you’re not used to it, when you think of budgeting you probably think “restricting”.  It’s much more liberating to be without a budget telling you what to do and how much you can spend, right?


An effective budget is actually just the opposite if used correctly.  It’s one of the most important tools to achieving financial freedom.  Because freedom from a budget isn’t freedom at all if it causes you to spend too much, deplete your savings/retirement accounts, or go further into debt.  In fact, being indebted to another person or organization is the exact opposite of freedom.

If you don’t currently have a thorough budget or track your expenses, give it a try.  If you already do, take this time to check out the spreadsheets I’m offering and see if they’ll be of some assistance.  If not, keep doing what you’re doing.

They are truly 2 of the most important steps to taking control of your finances once-and-for-all.

Image: Stuart Miles /

{ 7 comments… read them below or add one }

Katie March 31, 2012 at 12:11 pm

Your logic is right on. I appreciate the workable (and free) tools.
The only variable now is will vs excuses :)
…and who can afford excuses these days?


Rozzanne Perryman April 6, 2012 at 9:45 am

Thanks Chris! I love the free tool for budgeting. I’ve always said we need to start doing this and I have even went so far as to write one down, but….I couldn’t tell you where that paper is now! :) I really think this will help! Love the website! I use it every week! Keep up the good work!


Chris Tecmire April 6, 2012 at 1:24 pm

You’re welcome Rozzanne. The expense tracking sheet will make a big difference too if you want to give it a shot. Thanks for the feedback and God Bless!


Dena July 5, 2012 at 8:49 am

I really enjoy your articles, Chris. Keep them coming!


Chris Tecmire July 5, 2012 at 1:05 pm

Thanks Dena!


IKAWATI September 8, 2012 at 9:07 am

Thank for the tutorial, its really helpful. I always fail budgeting but with your tutorial I found budget its easy and fun.


Howard September 27, 2014 at 9:08 pm

I use plastic when ever possible to be sure that I document most spending. Always pay the balance in full each month.
To keep track of cash expenses. One day a week (Sunday evening for me) I count all the cash in my pocket. I have a set amount that I start the week with. Then I try to get a receipt for all cash expenses or write down the vending machine purchases, etc. On Sunday evening I add up the receipts and cash notations and balance it against the cash in my pocket. Any discrepancy is marked down to “miscellaneous” expense. After a while you will find that the misc amount will be very small.
I replenish the cash in my pocket from the “petty cash box”. Periodically I write a check for cash at the bank to replenish petty cash.
If your using the SFF spreadsheet, just make one weekly entry as “cash expenses” and break the cash expenses down to the appropriate categories.
The budget compared to actual spending makes it very easy to see where you can cut back on spending if you want to. For me those hot fudge sundaes not only accumulate on my waist line, but add up in a hurry as an expense item.


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