The journey, race or walk to debt freedom and financial peace has a lot of obstacles and can be a very wearisome one. To strengthen the financial muscles for this journey to financial freedom there are three absolute FINANCIAL NEEDS that are both critical and dynamic.
1. Budget
This is the tool that helps you allocate your expenses based on your income. It shows you where you are spending more and areas you can cut spending. It should be alive and dynamic; and it should 
change every once in a while to reflect the current milestone on your journey to become debt free.
2. Emergency Fund
This is an umbrella for the rainy day. If you have been through Dave Ramsey Financial Peace University, he proposes a $1,000.00 emergency fund, and then you focus your energy on paying off debt. Some people have very low risk tolerance and the $1000.00 just won’t cut for them. Whatever base amount is reasonably comfortable with you, start there. It is dynamic because it can be used up any time and you have to be ready to build it over again.
3. Financial Plan
This is like a compass that guides you as you race, walk or journey through to financial freedom. It has your ‘financial North Pole’ (how you will become debt free). You need to set a plan at the beginning of your journey. Set both short term and long term financial goals. To navigate through the labyrinths of debt, you will need your compass handy to check your ‘North Pole’ when you feel like you are getting lost.
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Hi, this is so true, i can positively affirm that since i started using a written budget and having a finacial plan (12-20) months) i have seen progress.
It’s a discipline to follow a budget, there are times when am tempted to buy something that isnt in the budget. But hey! am optimistic- and i know that i can do it.
@ Esta!- Budgets are the real deal. There is no goverment, business or institution that runs without a budget. I don’t know how we somehow imagine we can run homes without budgets.
Thanks for your comments.
Budget is the only solutions to live life smoothly. If there is no budget means no planning is not yet made. Then bad or critical financial crisis can come at any time. So, we all should learn how to make a budget and after that financial planning can be done easily and with success.
Moreover, the article is really nice. Thanks for the share.
Thanks Thomas,
I have learnt that at times the hard way; by the way if budget is a list of figure on a peice of paper it serves no purpose. One has to study the budget, and revisit the budget as often as possible to make sure that he/she is not going over the fence
Thanks for all of these great tips! I’ve been scouring the blogosphere for some helpful advice, and this definitely fits what I’ve been looking for! In case anyone else is interested in any more advice, I highly recommend checking out this blog
http://blog.greensherpa.com/index.php/personal-finance/the-frugal-student-part-11-budgeting-101/