Six steps to move from money stress to financial freedom

Elena Blanco changed her relationship to money and stopped living pay day to pay day.
Elena Blanco changed her relationship to money and stopped living pay day to pay day.  Photo: Stephanie Richardson

In 2015 Elena Blanco was a single mum with a mortgage, a car loan and enough credit card debt to make her worry. Despite earning a decent salary, Blanco spent her money as fast as she earned it and was left was stressed and overwhelmed as a result.

At that point Blanco was among the almost one in three Australians who always or often live from pay day to pay day, as well as the roughly two out of five Australians who don’t have enough money for emergency expenses. 

Fast forward two and half years Elena has paid off her debts, built a decent savings account and feels financially secure for the first time in her life. Her secret weapon? Transforming her relationship with money.

“Instead of using money to create a life that I loved and felt safe in, I was using money in an attempt to get people to love me,” Blanco says. “I would do this by buying things I didn’t need, paying the way for friends with lower paying jobs and lending money to family that would never come back.”

By kicking those habits and focusing on what she wanted, Blanco moved towards financial freedom. She has identified six changes that can help an individual move from stressed and overwhelmed about money to being financially secure.

1. Know what you REALLY want in your life

The trick is separating what you think you want from what you actually want. It’s possible the things you think you want are more about keeping up with the Joneses or meeting other people’s needs. If you are chasing something you don’t really want Blanco says it’s easy to resist and sabotage the end goal. By contrast, Blanco, says when you identify what you really want it is far easier to stay the course and do what needs to be done.

2. Know how much the life you truly want will cost

Don’t create a budget based on your income to work out what you can afford. “Instead figure out how much your desired life will cost instead and then start asking the following question: what can I create to receive the money I require to live?” Blanco says.

3. Commit to paying off all your debt

Blanco describes debt you’re not paying off as “a mortgage on your future”. It keeps you a servant to whomever you owe – whether it’s a relative or a bank. Choose a realistic amount of time in which you will pay your off, whether it’s three months or three years, and stick to it.

4. Create new income streams

It is easy to see a job as the only way to earn money but in reality there are many other ways to create some extra income. “We can get involved in money earning side projects on the weekends. Your whole life is your business, not just your job,” Blanco says.

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5. Identify the things that are fun and easy for you - they will make you money

Ask yourself how you could get paid for the things you love doing. “If you make the meanest apple pie or carrot cake in the world, start telling people that you now sell it,” Blanco says. “People think they have to choose either a job or an entrepreneurial venture. It’s not ‘either or’... it can be ‘and & and’.”

6. Start a 10 per cent bank account

You’ve heard it before, no doubt, with good reason. Transferring 10 per cent of every payment you earn into a separate bank account then never spend it is a fail-safe approach to building a buffer. “This habit helps you to get used to having money. We think that the important part is spending money, but actually it’s the having money that can change your sense of security.”

Georgina Dent is a journalist, editor and TV commentator with a keen focus on women’s empowerment and gender equality.

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