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The 3 essential steps to reach financial freedom

Updated: Jan 16

Be one step closer to financial freedom in three steps.

Please note: This site contains my own opinions and has links to sites that I have found useful in the past.

What is Frugal Living?

Frugal is a fun word to say. It is also a positive way to live, within reason.

Frugal living is being conscientious with your spending habits and not being frivolous with your income.

You cut back in areas where you shouldn't really be spending the money, and put that money toward something useful.

Frugal living doesn't mean you should be rationing toilet rolls or living on bread and water. It is about spending money on what adds value to your life.

Real everyday people can do it, like you!

Frugal living is about balance, taking control of your finances and adding value and meaning to your life.

Living paycheque to paycheque is NOT a way you deserve to live.

Reasons people might want to partake in frugal living

  • To pay off their mortgage early, which is my reason

  • Saving for a car, house or renovation

  • To put extra money aside for retirement

  • So they afford to leave higher education with no debt

  • Getting rid of debt forever

  • Plan to reduce their days or hours at work

  • They might just want to live more sustainably, frugal living cuts down on waste

  • Finding financial freedom in another way

I have three essential steps. They work. People like to avoid them because it is scary, or time-consuming. This is why they won't ever reach financial freedom, but you can! Trust me.

You can avoid these steps as much as you and save money bulk cooking, and shopping at second-hand stores (both excellent ways to live frugally) and you are on the right track...

...BUT unless you do these three steps, then you aren't really in control of your finances.

Let's get to it!

# 1 - Basic Financial Health Check

# 2 - Full Financial Health Check

# 3 - Stop Saving When You Are In Debt


# 1 - Basic Financial Health Check

This vintage gal wishes she had done her financial check sooner. All she has left is a bikini and bandana.

This is the MOST important step, and the one most people don't like doing. I LOVE doing mine. I have a book that is colour coded and everything. You don't have to be excited about doing it, but you NEED to do it.

You can't hide from this step, the sooner you do it, the more control you will start to have over your finances. It will become quicker and easier to do the more you do it.

If you have a partner, I would suggest doing this together, perhaps you can figure out a way to reach your goal more quickly as a team.

If you are drowning in debt, you need to do this step more than anyone else. It might cause you to stress initially, but the sooner you start to make small positive steps, the sooner you are on the way to financial freedom.

If the debt is a serious concern for you, help is available.

To do a financial health check, you need to log in to your internet banking or have a minimum of one bank statement then work through this list:

  • Make a note of your monthly income

  • Check all of your direct debits and standing orders

  • Make a note of common outgoings that may not be on direct debits such as food shop and transport costs

  • Make a table or list. It might look something like this:


£ per month

Nice to have

£ per month

Don't use

£ per month

Energy bill






Council tax


Coffee subscription


TV licence




Beauty subscription


Anything you signed up for on a free trial and forgot to cancel!

10 - 50

Pet care


Amazon prime


Contact lenses


Car tax


Food shop





Don't use: As you can see, in this situation I can automatically save £106.50 per month.

In my circumstances, I would set this amount up for a direct debit towards debt or towards a monthly payment to my mortgage. I would set up a direct debit because it has been 'dead' money for months and I haven't noticed until now. You might set it up towards savings.

Nice to have: I can see where I can potentially save money. I would decide which of them I would cancel (if any, remember I am trying to live frugally, not miserably) and set that up into a direct debit towards where it will benefit me the most.

Essential: You can still bring this figure down by reducing energy bills and being smart with your everyday living.

You might be thinking you HAVE to have a TV licence because you have a TV. That is not how it works. More on this here.

I do this every month, but every 3-6 months would be a great place to start.


# 2 - Full Financial Health Check

This vintage gal managed to buy a car after her check. Probably.

Well done! You have completed the scary step and hopefully found some ways to help you manage your money.

Go on, do a little victory dance!

The next step is like step one but in a bit more detail.

  • Take a look over your bank statement and write down any common spends

  • These might be takeaways, coffee's out, buying lunch etc.

  • Now decide which ones you are going to reduce.

For example, if I was spending £30 per week on takeaways, I would try and reduce that to two a month, saving me £60 a month. I would then put that money towards something that would benefit me. I might put it towards my debt or mortgage.

If you are spending money on takeaways make sure you are getting paid for it! Use TopCashback which is a site you can get cashback for shopping online! Free money.

I do the full check every 6 months.


# 3 - Stop Saving When You Are In Debt

Fair agree this makes no sense. Read on!


You should have 3-6 months worth of wages saved in your bank before you consider this step

If you have this and are STILL saving money AND have debt maybe you should reconsider where your money is going.

Banks really like it when you are in debt and are saving money.

This is not so great for you. Here is why:

Let's say King Midas saves £400 a month at 0.1% interest. He would make £4 interest a year.

He also happens to be in debt for £10000 at 3.5% APR. He would pay around £280 a year in interest.

So if he saves he makes £4. Interest rates are awful at the moment. He would be better paying off his debt IF HE HAS EMERGENCY SAVINGS.

Remember when paying off debt pay off the debt with the highest APR first. This will reduce your interest in the long run.

Remember some loans (like a mortgage) may charge you for paying them off early, so you should check before you overpay.

This would be a bad idea if the loan was 0%APR because you wouldn't be saving any interest.

Remember if you use the emergency fund, you need to replenish it!

This step feels natural if you are a saver (like me) so why not start by only saving half of what you would normally save and place the rest into debt.


Congratulations You Are Now On The Road To Financial Freedom!

If you are wondering what I mean by financial freedom, I mean you have reached your goal of a more balanced life.

This comes in all shapes and sizes and is personal to you, for example, you might:

  • Use the money to pay off your mortgage earlier so you can drop your hours at work

  • Put the money into a retirement fund and retire early

  • Get rid of all of your debt and be debt free for life

  • Start your own business

  • Go on holiday every year and upgrade to the fancy suite

  • Save it to buy a farm so you can rescue ALL the dogs

I will be giving you a guide in the next two weeks explaining HOW you can make your financial freedom plans a reality. See you then!


A few words about Fair

Fair is a vintage gal on a journey to find financial freedom. She shares her best tips with you, so you can achieve the same goal, whether it is saving money or looking fabulous!

If you would like to learn more about Fair and how she measures wealth by the number of socks she owns, click here.

Fair loves mail! Send Fair a message here.

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