Financial independence today is almost a phrase unheard-of. It's “normal” to have a car loan, to carry a balance on your credit cards, and to have a mortgage on your home. But is it really “normal?” Or have we just become immune to that reality that most people do have a car loan, a credit card with a balance, and a mortgage (if you even own your home), and since everyone else is in that situation, “it's OK for me too…right?” WRONG!

7 Steps To Achieve Financial Freedom

I am about to walk you through bullet proof process that will

guarantee your financial freedom. Below I have outlined the 7 steps to becoming financially free. It's a step by step process that you don't hear in school, but something so simple and common sense that a kindergarten student will understand it!

Step 1 – Defense Wins Championships

Have you ever heard the phrase “Defense Win's Championships?” I grew up playing sports, and I've always been on the defensive side of the team. And I can attest that without the defense, no game is ever won! The offense can do all they want and score as many points, goals or touchdowns as they want but without a good defense, all that offense is worth NOTHING!

That's why step one to becoming financially free begins with defense in mind. How much money do you have in your savings account right now? I'm willing to bet it probably has an average balance of $500 or less. Am I right? Now this may not be everyone reading this, but a good percentage of you reading this are shaking your heads yes. Regardless of your current circumstance, you need an emergency fund of AT LEAST $1,000. No more, no less.

If you are so tight that $1,000 isn't doable for you, then begin with $500. But I'm willing to bet that there are plenty of areas you can cut your expenses, and plenty of things lying around the house you could sell quickly and get to that lucky number faster than you think! Bear with me here, this is going to take some work. But you will be happy you did it!

Your emergency fund is for just that, emergencies! An emergency is something that is unexpected or unplanned for that fell from the sky…literally! This includes emergencies for health, car emergencies (other than basic routine upkeep), house emergencies and repairs, etc…you get the idea.

Step 2 – 24.99% Guaranteed Return….? What??

Now that we got our defensive team in place, we're ready to build an offense. Did you know that you could get a guarantee return on your money of up to 24.99% TODAY!? Now before you go thinking this is a scam, allow me to explain. How much is your current interest rate on your credit card? 12.99%? 14.99%? Or even 24.99%? Well…look at it like this. For every dollar you keep on your credit card balance, you are paying the bank a fee of 24.99% (or whatever your interest rate is on your card). Boy are they happy! Well, if you could payoff that credit card TODAY, wouldn't that be a return of 24.99% on your money that you would have paid to the bank otherwise? See…I told ya so!

Step 2 of becoming financially free is to pay off all your debt, except your house. This means all your credit cards, car loans, student loans, etc. This step is oftentimes the longest of them all, and can take years to finish. But if you keep that mindset of your guaranteed return on your money in the form of NOT paying the bank an interest rate on your balance by paying it off, you'll get there!

Step 3 – Real Job Security

The future can oftentimes throw us a curve ball. I've personally experienced it firsthand. Have you ever lost your job? Whatever the reason may be, whether it be due to a bad economy, you got fired, or laid off, it's not a peaceful process.

Step 3 in becoming financially free is creating a 3-6 month reserve. This reserve fund should be 3-6 months worth of your household living expenses. So if your living expenses for your family is $4,000 per month, then that would mean your emergency fund is to have $12,000-$24,000 in an FDIC insured bank account. This money is not to be invested, but rather accessible immediately.

By doing this, you are creating an even more secure financial foundation for you and your family. Now, no one plans on loosing their job, or the economy going belly-up unexpectedly. But stuff happens. Keeping a reserve fund of money may be the difference in whether you retire on time, or whether you end up working an extra 5 years than planned.

Step 4 – Now You're Ready For The Fun Stuff

I know you've been antsy to find out when the money making part comes into play. Well, now that you've got your emergency fund, paid off all your debt but your house, and have then grown your fund up to 3-6 months of your household expenses, now's the time to start saving and investing for retirement. By now you are probably enjoying the benefits of lower financial stress levels, plenty of income, and nearly NO PAYMENTS each month (except for basic living expenses of course such as food and a place to sleep). What used to be going to paying off debt, and building up an emergency fund, now we will be stashing away for retirement.

In step 4 of the 7 steps to financial freedom, you now should take 15% of your gross income, and put it into an after tax retirement account such as a Roth IRA. If you make $50,000 per year, that means you should be saving $7,500 per year in your Roth IRA. You will want to invest this money into good growth stock mutual funds. To understand more about mutual funds, see your local bank financial adviser to help you.

Step 5 – Education

Step 5 is dependent on how you prefer to pay for your children s education, if you plan on having children. Education is one of the fastest growing costs, rising faster and faster each year. Most people graduate with a Bachelors Degree along with 40-60k of debt to pay off. With the cost of education rising, it is vitally important that you plan for this expense if you have children. Otherwise, they will end up in the same deep hole you started out on, and that is a big deep hole covered in debt!

If you are to pay for your children s education, determine how much you want to contribute to their educational expenses, and how many years you have before they will need access to that money, and set a goal to set aside enough money based on your goal.

Step 6 – Owned Free & Clear

After planning for your children s education we want to focus on your nest…literally. Do you currently own a home? If so, our next step in the 7 steps to financial freedom is throwing any and all of your money at the house until it's paid off! YAY! Can you imagine never having a house payment ever again? That's an extra $1,500 per month or more in most cases that you can use to put towards savings, go to a vacation fund for the family, or whatever you like! Imagine that!

If you don't own a home, your chore is to save for one. Your house will be one of your greatest assets, and will increase in value over the long term. Determine the cost of housing in your area and set a goal to save for that home and pay cash for purchase. If you do decide to get a mortgage, never go more than a 15-year mortgage term.

Step 7 – Spread the Word

By this point you have definitely been through a lot of grin and grit, but all for the better. You are among the top percentile of Americans in regard to debt and financial freedom. Help spread the word of this process, and help others achieve what you have worked so hard for. Have you ever heard of the givers gain? When you give, it always comes back in some form or another. Cultivate the spirit of giving and helping others become financially free.

These steps listed above are a summary of one of my favorite financial experts, namely Dave Ramsey, host of the Dave Ramsey show on talk radio and author of the best-selling book “The Total Money Makeover.” If you are struggling financially, and want to read and understand these 7 steps in greater detail, you can purchase his book on amazon via the following link:

==> Click here for more best selling books on wealth and money that I highly recomend

I sincerely hope this article has given you some insight on becoming financially free. Please comment below on on tips, tricks and ideas that have helped you become financially independent. Stick around and check out what else i'm doing to create wealth and retire rich!