What Makes This Formula Different?
Millions of people lie awake at night worrying about money. Bills pile up. Credit cards max out. Paychecks do not stretch until the end of the month.
But what if someone had found an easy way to escape this cycle?
Corey’s formula for financial freedom doesn’t rely on getting rich quick. This isn’t about exotic investments or risky businesses. Its approach is pragmatic not utopian, designed to be applicable by any person despite their current level of income.
This system has helped thousands of people get out of debt, build up their savings and unlock a life where money works for them—not the other way around.
I want to dissect exactly what this formula is and how you can start using it today.
The Principle Behind Corey’s Tactical Approach
Before learning the actual steps, it is vital to grasp the thought behind this formula.
The majority of financial advice is about how you can make more money. Corey’s process begins elsewhere: by controlling what you already possess.
You can think about your finances like a bucket with holes. Pouring more water in won’t solve the problem if holes keep draining it out. You gotta stop up those holes first.
Three main principles govern the formula:
Spend less than you earn. This seems really basic, but most people don’t actually know where their money is going. Small purchases add up fast.
Make your money work harder. There should be an intended use for every dollar. Cash sitting on the sidelines is losing value in real terms over time due to inflation.
Build systems that run automatically. Willpower fails. Systems succeed. The formula leads to habits that do not require constant effort.
Step One: The Money Snapshot
The first ingredient in Corey’s formula takes blunt honesty.
You have to understand exactly where you stand financially. Not a rough estimate. Not what you think you spend. The real numbers.
How to Create Your Snapshot
Collect three months of your bank statements, credit card bills and receipts. Write down every single expense.
Create categories for your spending:
- Housing needs (rent/mortgage, utilities and insurance)
- Transport (car loans, gas, insurance and servicing)
- Food (groceries and eating out)
- Debt payments (credit card payments, student loan payments, personal loans)
- Entertainment (streaming, hobbies, going out)
- Personal care (haircuts, gym memberships, clothes)
- Miscellaneous (everything else)
Calculate what you have spent in each category over three months. Divide by three to find your average monthly.
Now take your monthly expenses and subtract them from your monthly income.
This delta—positive or negative—determines where you start.
What Your Numbers Reveal
You find that most people are over-spending by 15-20% more than they thought. Those coffee runs, app subscriptions and impulse buys amount to a sustained drip.
You are going backward each month if you spend more than what you earn. If you are just breaking even, you aren’t moving anywhere. You can only get ahead if you bring in more than it goes out.
It’s not supposed to make you feel bad, your snapshot. It’s simply information. And information grants you power to change.
Step Two: The Priority Pyramid
After you know where your money is going, Corey’s approach urges you to build your financial life back from the ground up.
Imagine it as a pyramid with four tiers. You have to move every level one by one to get success.
Level 1: Basic Survival Needs
The foundation includes:
- Rent or mortgage
- Basic food costs (groceries, not restaurants)
- Essential utilities (electricity, water, heat)
- Transportation to work
- Required insurance
These expenses are non-negotiable. Everything else is negotiable.
Level 2: Minimum Debt Payments
To that end, the next step is staying up to date on all debt. This means you won’t be charged late fees, have your credit impacted or face legal action.
Minimum payments on all debts each month. Nothing less.
Level 3: Small Emergency Fund
Before really attacking debt, establish an emergency fund of $1,000 to $2,000.
This cushion averts new debt when unexpected expenditures arise. And they will hit. Cars break down. Appliances fail. Medical issues arise.
Level 4: Pay Down Debt and Invest for the Future
You don’t aggressively pay off debt or start building long-term wealth until you are done with levels 1–3.
This prioritization system also prevents the most common errors. Many people attempt to invest while bleeding high-interest debt. Or they pay extra on debt at the expense of an emergency fund, and then when emergencies do occur, they use credit cards.
Step Three: The Expense Audit
Now comes the step that most people resist: reducing expenses.
Corey’s formula doesn’t require that you live like a monk. It wants you to kill off spending that doesn’t enhance your life.
The Three Questions Test
For every expense, ask:
- Does this substantially increase the quality of my life?
- Was there any way I could get an equivalent benefit for less money?
- If this went away, would I miss it?
Be honest. What about that gym membership you have not used in three months? It is not making your life better.
The cable package to end all cable packages when you really only watch Netflix? You could get there for less.
Seven streaming services when you really watch two? If five disappeared, you wouldn’t even know.
Where Most People Find Savings
Common places Corey’s approach uncovers “hidden money”:
- Subscriptions people forget about: $50-150/month
- Eating out instead of cooking: $200-400/month
- Name-brand groceries vs. store brands: $50-$100 a month
- Impulse buys at checkout or online: $60 to 100 a month
- Unused insurance coverage: $30-100/month
That comes to $430 to $950 per month. $5,000 to $11,000 a year.
For the most part, this money seems to vanish and leaves no true happiness or value in its wake for most of us.
Step Four: The Debt Terminator Approach
With your expenses under control and a small emergency fund in place, you are now free to annihilate debt.
Corey’s formula is based on what he calls the “momentum method.”
How the Momentum Method Works
- Write down everything you owe from smallest to largest. For the purposes of this step, interest rates can be disregarded.
- Make only minimum payments on everything, except the smallest debt. Throw all your extra dollars, and maybe even a few sacrificial ones, at that smallest debt until it’s gone.
- When the first debt “goes away,” add its entire payment to yourself, and apply it to the next higher debt.
Why This Trumps Math
By the numbers, paying off your highest-interest debts first is the most efficient way to save money. But humans aren’t robots.
The momentum method works in psychology. Debt paid off = win. Many wins and debt victories add up. Wins create motivation. Motivation keeps you going.
When a person pays off three small debts, they feel unstoppable. Someone who has been chipping away at one massive debt for months typically gives up.
Fast wins are more important than the best math.
Real Example
Sarah had five debts:
| Debt | Balance | Minimum Payment |
|---|---|---|
| Credit Card 1 | $500 | $25 |
| Medical Bill | $1,200 | $50 |
| Credit Card 2 | $3,500 | $75 |
| Car Loan | $8,000 | $250 |
| Student Loan | $15,000 | $150 |
After spending less, Sarah put $650 per month toward debt.
She paid the minimums on everything ($550) and aimed the extra $100 at Credit Card 1.
Five months later, Credit Card 1 was history. Now she had $125 ($100 plus a minimum of $25) to put toward the medical bill.
Ten months later the medical bill was gone. Now she had $175 for Credit Card 2.
It picked up steam with each victory. In three years, all their debt as consumers was eliminated. There was just the student loan left, and she could hit that one with $500 a month.
Step Five: Developing Your Financial Safety Net
With debt out of the way, Corey’s equation becomes one of creating genuine financial security.
The goal: Save three to six months’ worth of expenses in a fully-funded emergency fund.
Why Three to Six Months?
That amount will shelter you from the vast majority of life’s surprises:
- Job loss
- Major medical expenses
- Significant home or car repairs
- Family emergencies
This cushion allows you to deal with problems without having your entire financial freak-out.
Where to Keep This Money
Two qualities are essential to your emergency fund: safety and accessibility.
Stick it in a high-yield savings account. Not invested in stocks. Not locked in CDs. Not under your mattress.
You want to have access to it if you need it, but not so much that you’re dipping into it for non-emergencies.
Step Six: Wealth Building Begins
With debt out of the way and your emergencies covered, you are now in a position to begin building wealth.
Here is where Corey’s formula zeroes in on three tools to build wealth.
Retirement Accounts
Begin by contributing at least enough to any employer retirement plan in order to receive the full company match. This is free money.
Then work up to saving 15% of your gross income for retirement. Leverage tax-favored accounts, such as 401(k)s and I.R.A.s.
The sooner you start, the longer compound interest has to work its magic.
Index Funds Over Stock Picking
Corey himself advocates investing in low-cost index funds rather than picking individual stocks or expensive managed funds.
Why? With the premise that trying to beat the market usually doesn’t work. Index funds replicate market performance for almost no cost.
Simple investing like this generally outperforms complex strategies over 30-40 years. Learn more about index fund investing from Investopedia.
Additional Income Streams
Once you have a good, strong base of savings, start adding to it by finding ways to make more money:
- Skilled or hobby-based side businesses
- Freelance work in your field
- Rental income from property or spare rooms
- Online businesses or digital products
Extra income accelerates every goal. It pays down debt more quickly, builds up savings faster and produces wealth sooner.
The Numbers That Prove It Works
Here’s how Corey’s formula evolves finances through the years.
Starting Point:
- Monthly income: $3,500
- Monthly expenses: $3,600
- Total debt: $28,000
- Savings: $0
After 6 Months:
- Monthly income: $3,500 (same)
- Monthly expenses: $2,900 (cut $700)
- Total debt: $24,200 (paid off $3,800)
- Savings: $1,500 (emergency fund started)
After 2 Years:
- Monthly income: $3,800 (small raise)
- Monthly expenses: $2,900 (same)
- Total debt: $6,400 (paid off $21,600)
- Savings: $4,500 (emergency fund complete)
After 5 Years:
- Monthly income: $4,500 (raises and side money)
- Monthly expenses: $3,200 (lifestyle was slightly upgraded)
- Total debt: $0 (all paid off)
- Savings: $35,000 (emergency fund and investments)
The transformation doesn’t necessarily come with a big income. It’s about pushing and following the process step-by-step.
Common Mistakes to Avoid
Even with a good formula, mistakes are made predictably.
Mistake 1: Not Having an Emergency Fund
Some people are so eager to tackle debt that they don’t want to build any emergency savings.
Then something breaks. And they help fix it with credit cards. And they’re back in debt.
So always make that cushion of $1,000 to $2,000 before you attack your aggressive payoff on debt.
Mistake 2: Lifestyle Inflation
You get a raise. Suddenly you “deserve” a fancier apartment, new wheels or better threads.
This keeps you stuck forever. Yet each gain in income comes with a corresponding increase in outlays.
Instead, either sock away or invest at least 50% of every raise.
Mistake 3: Investing Without Paying Off Your Debt
The market might return 10% a year. But you have a credit card, which charges 20% in interest.
Nothing pays better than eliminating high-interest debt.
Mistake 4: Taking A Loss And Quitting
You follow the plan for three months and then have a costly emergency. Or you make a mistake and spend too much one month.
These setbacks are normal. They’re not failures. Just adjust and keep going.
How to Stay Motivated Long-Term
It takes years, not weeks, to transform a financial system. Staying motivated requires strategy.
Track Your Progress Visually
Make a chart that depicts debt going down and savings going up. Update it monthly.
Seeing results keeps you motivated through tough months.
Celebrate Small Wins
Each paid-off debt deserves celebration. Not with a dollar amount, but by saying good job.
Tell friends. Post about it. Do something different that doesn’t take money.
Find Your “Why”
What is your reason for financial freedom?
- To not live paycheck to paycheck?
- To afford a house someday?
- To switch careers without fear?
- To prevent your kids from taking out student loans?
- To retire early and travel?
Write down your reason. Read it when you feel like giving up.
Connect with Others on a Similar Journey
It’s easier to make financial transformations with help. Join online communities, local groups or friends going through the same thing.
Life is less lonesome if you share the same struggles and victories.
Modifying the Formula for Your Needs
Corey’s formula is a framework, not a rote script. Make it your own for what works best for you.
If You’re Deep in Debt
Only concentrate on the first four steps. Don’t worry about investing yet. Get out of the hole first.
Maybe you can find some side work to boost income. When you have debt, earning more can make a huge difference.
If You Have High Earnings and No Savings
You have a spending problem, not an earning problem. The cost audit is very important for you.
Record every purchase for 60 days. You’ll be amazed where money travels.
If You Have Kids
Age-appropriate discussions about money should include children. They can also suggest ways to trim expenses.
Teaching children these principles will put them on the path to financial success down the road.
If You’re Near Retirement
Adjust the formula to focus on retirement readiness. There is less time for compound interest to work.
Concentrate on maximizing retirement contributions and getting comfortable with debt before retirement.
The Long-Term Vision
The formula for Corey’s financial freedom isn’t just money. It’s about creating options.
Financial freedom means:
- Opting for work you love instead of work that pays most
- Saying yes to opportunities without thinking about the expense
- Helping others without suffering personally for it
- Sleeping peacefully without money anxiety
- One where you don’t have to retire, but can
These benefits are worth years of dedication.
Your First Steps Today
Never wait for the perfect time to get started. Begin today with these actions:
Step 1: Download three months of bank statements, credit card statements.
Step 2: Take two hours to sort everything into categories of spending.
Step 3: Determine your total monthly spending. How does your total spending compare with your income?
Step 4: Find three costs that you can eliminate right now.
Step 5: Set up an account for your emergency fund in a different savings account.
These five steps will take less than a day, but get you on your way to changing.
Frequently Asked Questions
Q: What’s the timeline for this formula to bring financial freedom?
In three to five years, most folks experience substantial change. Total financial freedom (no debt and significant savings) usually takes 7-10 years, with how fast you achieve it depending on the amount of starting debt and your income.
Q: What if I barely make enough to scrape by from one month’s end to the next?
Begin by identifying even $20-50 per month from expense reductions. At the same time, start to work on increasing your income via a side job, building up skills or asking for raises. The formula does work at any income level, but the system requires cutting expenses or bringing in more money.
Q: All this aside, is it OK to retire a mortgage with this approach?
You can do this only after you have paid off consumer debt, built a full emergency fund and are saving at least 15% for your retirement. Mortgages usually have relatively low interest rates, so they are the last to be focused on.
Q: What if my partner doesn’t want to stick to this formula?
Financial independence takes two in relationships. Discuss goals and fears honestly. Get a financial counselor if the two of you can share one. If you can’t coordinate, there are still principles you could apply in your own spending.
Q: Can I invest if I have debt?
While paying off debt, only invest up to employer match in retirement accounts. Then, throw extra money at debt payoff. Once you have paid off high-interest debt, move your focus to aggressive investing.
Q: What constitutes an emergency for the emergency fund?
Real emergencies: loss of a job, medical bills, critical home/car repairs, family problems. Not emergencies: sales, vacations, wants that have been masquerading as needs. When in doubt, ask yourself if you would be comfortable borrowing money for it.
Making It Happen
The formula of financial freedom is not a hard one. It’s just a few simple steps done on a regular basis over time.
Most people know they should spend less and save more. But knowing is not the same as doing.
Corey’s strategy works because he is showing the way. One step, then another, and another. No mystery as to what comes next.
You don’t need to be perfect. You need to be persistent.
Start today. Track your spending this week. Cut one frivolous expense this month. Save your first $100 in the next month.
Little things lead to big changes.
Your journey to financial freedom starts with a single decision: whether to apply yourself in following a proven formula, rather than wishing on a miracle for things to change.
That decision changes everything.
