In today’s world where living the good life is touted to us as having all of the “stuff” that we want, the words “financial freedom” are largely lost on the majority of people.
For many, financial freedom is an out-of-reach dream that only comes to the rare few that win the lottery or that make $500k-plus a year.
However, the Internet is full of stories that tell about “regular” people that have attained or are working toward attaining financial freedom. Can you be one of those regular people? Is it really possible for someone with an average income to achieve financial freedom?
Before we answer those questions, we need to talk about what financial freedom is.
In This Article
Financial freedom is:
- Having enough money that you can choose what you want to do, where you want to live, and how you want to work and help others
- Managing your income in a way where it isn’t paid to banks and credit card companies, but instead put to work for you, growing more money
- Having financial freedom means managing your money in a way that allows you freedom: freedom to not be tied to a job, a house, a car, a city, etc.
Financial freedom isn’t necessarily:
- An unending supply of money that allows you to buy whatever you want, whenever you want
- A forced early retirement where you are void of responsibility and a career
In other words, financial freedom is more about having the money that allows you to make decisions based on things other than money. Many people in today’s world have to make decisions based on what will help them pay the bills. True financial freedom takes away that roadblock to life decisions and allows you to make decisions on what you feel is best for yourself and your family regardless of income requirements.
I’m sure you could think of a million reasons why it would be nice to live a life void of money worries, but I want to go in depth for a minute and ask some heart questions that may help you find a deeper reason to go from “wanting” financial freedom to “getting” financial freedom.
Why Financial Freedom?
Attaining financial freedom takes work. Some might say it takes sacrifice, although those of us in the know understand that it’s about trading in perceived wants for true wants. Attaining financial freedom also involves going through the process of learning why you manage money in a way that isn’t in line with your true dreams and then learning to overcome those unhealthy money habits.
Why on earth would someone choose to put in all of that hard work? Life involves enough hard work without adding to the list, am I right? Let me ask you a few questions that might help answer why someone would put in the years of practical and psychological time and effort that it would take for them to achieve financial freedom.
Have you ever felt unsatisfied with your current job but are stuck there due to the responsibility of payments on loans, credit cards, and mortgages?
Have you ever wondered what it would be like to work at your dream job, or to go back to college, or to live a less busy life, yet you know it’s not possible due to financial obligations?
Have you ever wondered what it would be like to have enough money set aside so that your decisions didn’t have to be made around wondering how you’ll eat and survive?
Have you ever wanted to help a struggling person or family but couldn’t, due to your own lack of funds?
Have you ever thought about just packing up and moving to another city, state or country – but couldn’t because of financial restrictions?
Have you spent hours, days, weeks or years worrying about how you’re going to:
- Make it to the next paycheck?
- Pay upcoming bills?
- Cover an unexpected expense such as a repair bill?
- Ever be able to afford the finer things in life?
- Ever stop living on such a tight budget?
- Make enough money so that money isn’t a struggle anymore?
All of these questions are reasons why other people have chosen to put in the hard work that allowed them to attain financial freedom.
Many people think more income is the answer to their money problems, but the truth is that you can’t out-earn money management mistakes. The next raise, the next bonus; it will all fly away just like the rest of your money until you gain a clear understanding of why financial freedom is important and what it takes to get there.
Money truly isn’t everything, but freedom is worth a lot. You only get one life to live. Are you living that life the way you want to live it? Or are you stuck in the rat race of “work, pay the bills, and go back to work so that you can pay next month’s bills”?
If you’re stuck in the rat race and happy with that life, that’s wonderful. Kudos to you for doing what you want to do with your life.
However, if you want more, I strongly encourage you to consider starting a path to true financial freedom. The truth is that financial freedom is attainable for anyone who wants to work hard enough to get it. If you want it, here are some steps you can take to begin forging your own road to financial freedom.
1. Determine Your Dreams
If your road to financial freedom is going to be a successful one, you need to have a solid idea of why you’re on the path that will get you there. Why do you want financial freedom? What will life look like when you’ve attained financial independence and what will you do that will make it worth the effort you put in to reach your goal?
Finding your “why” is arguably the most important step in attaining financial freedom, so it’s important to give yourself some time to discover that “why”. Take a couple of hours to be in a quiet space and to determine what it is that you truly, honestly want out of life. Write your reasons down on a piece of paper or on a poster board with pictures. Record your dreams, and post them prominently in a place where you’ll be reminded of them often.
Your dream sheet” is what will help you to make wise money decisions when you’re tempted to make unwise money decisions, and it’s what will help push you through roadblocks and times of discouragement on your journey.
2. Pay Off Your Debt
Time to put on your big boy/girl pants, my friends. Dumping your debt takes work, but it’s work that will allow you to sleep much better at night. Make a budget that works for you. Create a spreadsheet or use a tracking system such as Mint or Personal Capital that will help you to start tracking your spending, and get rid of the expenses that are prohibiting you from achieving your dreams. Direct all money you save from cutting expenses toward dumping your debt.
Working this step successfully might mean reevaluating what’s important to you. Is that new car worth the hours you work to pay for it each month? Or can you be happy with a reliable used car with no payment so that you can put more money toward achieving financial freedom?
Is your McMansion worth the bloated monthly payments, or would you be happier with more money and a smaller home?
Is having the premium cable package worth putting off the freedom that comes with having no debt and plenty of wealth?
Every person’s answer will be different and there’s no right or wrong answer here. Again, it’s about determining what’s truly important to you for the long term. However, if attaining financial independence is truly important to you, you will be willing to make sacrifices in the short term for freedom in the long run.
3.Start Saving Money
After your debt is paid off, you can start to save money like a champion. Work to increase your savings rate to 50, 60 or even 70 percent of your take-home pay. Automate your savings so that you won’t be tempted to spend the extra money that you have now that you are free from the burden of debt and the monthly bills that come along with it.
Choose which investments you are comfortable with and put your savings toward those investments. Depending on your comfort level, that may be a mutual fund, a CD, an investment property or another form of investment. Before you invest your savings, however, you need to work on step number 4.
4. Educate Yourself on Building Wealth
The World Wide Web is full of people who have learned to excel at building wealth and are sharing their success and mistakes along the way for others to learn from. Turn off the TV, put down the smartphone and start learning what it means to build wealth successfully.
With each step you take toward making your financial situation more secure, you increase your freedom. You increase your ability to make choices that do not have to be tied to making X amount of dollars per week.
And as money becomes less of a worry and more of a tool, you’ll find yourself thinking differently about life. You’ll think bigger. You’ll learn to get outside of your own little world and consider how you can make the world at large a better place. Your dreams will go beyond the dream of paying the monthly bills without having to use a credit card to buy groceries.
The education available on the Internet about dumping debt, building wealth and achieving financial freedom is truly endless. And as a bonus, it’s free. Reading stories and gleaning ideas and strategies from those who are on the road to success or have achieved success with their money will get your own creative juices flowing and help you think up more ideas about how you can better your individual financial situation.
As the ideas flow, your path to financial freedom will speed up, and your mindset will change. You’ll start to think like a wealthy person as you move toward your goal of attaining wealth, and as that happens, your goal will become more of a priority. Things like giving up satellite TV, or going out to eat, will no longer bring you joy, but instead, you’ll see them as a roadblock to your dream.
At that point, it becomes easier to make financial choices that will propel you toward wealth building and away from spending that doesn’t provide value to your life. Time flies in life, and the time you spend changing your financial mindset will fly as well. Although the days may seem long, the months and years will fly by, and before you know it you’ll be “at” financial independence.
And then the fun begins. Then you can begin living life on your own terms and follow your dreams.
This is the world in which those who have chosen to put in the effort to achieve financial freedom live. They live a life where thoughts about money and bills are no longer like a constant dripping of water on the forehead. And that freedom from worrying about how they’ll pay them bills allows them to view life from a different perspective.
Instead of thinking about the next paycheck, the next raise or the next tax return, they can focus on being more, doing more and impacting the world for the better.
How does that life sound to you? As you think about that question, is a fire starting to rise up on the inside? Are you beginning – maybe even for the first time in many years – to dream again? Are you starting to remember the power that lies within your own personal dreams? If so, you’ve just taken the first step to beginning your own journey to financial independence.
Take it and run with it. Start by reading these debt success stories. They’ll get you fired up to eliminate your debt. Then, it is go time for building wealth. Are you in? Are you joining me, Deacon and the many others who have chosen to go for it? Come along. It’s going to be an awesome ride.
Have you ever thought about having financial freedom? What’s stopping you from beginning your own journey toward financial freedom?