Dollars and Debts with Denny: The financial freedom pyramid

When I was learning to play the piano, I had to endure the agony of music theory books — they were tedious but necessary lessons that helped me understand how to read and play music. Similarly, financial literacy involves the money basics you need to know to get by. My musical fluency came later when I could sit at my keyboard, write a song and perform it for an audience. Financial fluency happens when you know enough to make your money work for you — you have goals and you know how to reach them.

As you work from literacy to fluency and onward toward financial freedom, the Financial Freedom Pyramid can serve as a framework that shows you where you are on your journey and how to ascend to the next tier. Whether you’re just beginning to explore your financial foundations or you’re building your legacy, the Financial Freedom Pyramid can help you feel less uncertainty and more traction on your way to freedom.

Financial foundations: Earning, budgeting and saving

Who this is for: You want stability. Maybe cash flow is bumpy, you’re starting fresh after a setback or you’ve never had a plan that stuck longer than a couple of paychecks.

Financial foundations is about control, not perfection. Before you optimize anything, you need to explore your earnings options, track where your money is going and make sure your most important obligations are covered on time. This stage builds two systems — one for understanding and planning your cash flow and one for preparing for surprises — so the rest of your plan has something solid to grow on. Learning how to budget and why it’s so important to save for a rainy day are your first steps in becoming financially literate.

Earning

Before you can make a plan for your money, you have to consider how you’ll make it. Explore different income sources and how often you’ll get paid. Most financial advice revolves around a one-job, one-career mindset. However, according to Bankrate’s Side Hustles Survey, one in four American adults has a side hustle, which is important for two reasons.

First, it gives you a safety net if you lose your primary job. The impact of a layoff or sudden income reduction can be softened by having a side gig.  Second, a lot of side hustles give you daily pay, which can help you fill gaps between biweekly paychecks without swiping a credit card or taking on emergency debt like payday loans.  

Budgeting

Once you decide how you’re going to earn money, you need to know where it’s going. Start with an audit of the last two months. Pull up your bank and credit card statements and tag each expense as a need or a want, and then put them into spending categories. You’re not judging — you’re measuring. That picture becomes your first budget.

Pick a budgeting method you’ll actually use and stick with. Zero-based budgeting gives every dollar a job. The 50/30/20 rule gives you guardrails without getting too deep into the weeds. Envelope systems put speed bumps between you and impulse purchases. It matters less which system you choose and more that you stick with it long enough to identify patterns in spending and make course corrections.

Saving

If the past several years of unpredictable economic events have taught Americans anything, it’s that financial markets can change in a flash. The surest way to avoid debt trouble is to have savings for a rainy day — yet many Americans have none. In fact, Bankrate’s Emergency Savings Report found that nearly a quarter of Americans have no emergency savings.

A small cushion can change your whole trajectory. Open a dedicated high-yield savings account — don’t use your checking account — for your emergency fund and automate a transfer each payday. Even a modest amount builds the habit. And you’ll be grateful you did when the car makes a new noise at 11 p.m. on a Tuesday. As your emergency fund grows, add in a sinking fund for something you’ll actually use, like savings for travel, a home project or concert tickets.

Debt fluency: Strategy over stress

Who this is for: You carry balances — credit cards, student loans, maybe a car — and you’re ready to replace scattered payments with a plan that lowers the cost and mental load.

The key to using debt within a financial freedom mindset is to see it as a tool rather than a necessity or lifestyle. When used wisely, debt can help you accomplish your financial and personal goals — a student loan can support your education, while a car loan facilitates transportation to your job.

Debt fluency is where the momentum kicks in, and you understand how each debt decision affects your credit score over time. The point isn’t to feel guilty about balances. It’s to know how each type of loan affects your credit score future, so you can secure the lowest reasonable rates and keep a cash buffer, so surprise expenses don’t send you back into debt.

The rule of thumb for taking on smart debt is simple: If it saves you money or clears the path to a goal (like graduating from bad to fair credit), it’s worth a look. If fees or long-term costs are too high, bad debt can set you back. You’ve achieved debt fluency when you can leverage debt wisely without derailing your progress.

But if you overuse credit (especially revolving credit, like credit cards), don’t fret — you haven’t destroyed your financial future. It’s simply time for a reset. Consider paying off the debt using proven methods like the debt snowball or fine-tuning your budget. 

Investing: Let time do the heavy lifting

Who this is for: Your debt plan is on track, your cash flow is stable and you’re ready to grow wealth on purpose.

Once you have the basics of credit, income and saving down, you can start into more advanced financial fluency topics like investing, retirement and home buying. It’s important to learn from successful investors and stay up on financial news so you can make informed decisions.

The goal isn’t to pick a winning stock or to time the market. It’s to capture free money, automate contributions and let low-risk investments compound quietly in the background. Start with the easiest win: your employer 401(k) match. If your workplace offers this perk, aim to raise your contribution to qualify for the maximum. Missing it is like leaving an envelope of cash in the break room.

If you’re a homeowner, understand how mortgages work so you can move strategically when it’s time to refinance or tap equity.

Legacy: Protect, direct, distribute

Who this is for: You’re well ahead for retirement and want your money to reflect your values, protect your people and extend your impact.

Legacy is financial freedom in action. It’s the point where money choices are less about you and more about the people and causes you care about. Your money is working for you — perhaps via dividend stocks, real estate portfolios, index funds and bonds. If you have children or grandchildren, education funding through a 529 plan can be a practical expression of values. The thread that ties everything together is intention.

The final word from Denny, your BFF (best financial friend)

I’m thankful that I stuck it out with my piano teacher through those early years of repetitive scales and music theory. Those lessons carried through to writing and performing songs in Nashville that connect to people’s life experiences.

The Financial Freedom Pyramid is like learning covers before you start writing your own songs. You learn what other people have written, and then begin to adapt to your own style, story and experiences. Eventually, you write a financial masterpiece that reflects all the decisions you’ve made along the way.

Just remember: Financial freedom isn’t a finish line you cross once. It’s a set of stages you enter and exit as life changes. Put your effort where it counts for the season you’re in. Build foundations until money obeys your calendar. Get fluent with debt so interest stops dictating your choices. Automate investing so time does the heavy lifting. Protect what you’ve built and point it where you want it to go. The view gets better with each tier, and so does your ability to accomplish your goals.