Those of us who write about personal finance use the phrase, “financial freedom” a lot. It’s the moral of every financial story. No matter the question, financial freedom is the answer.
But have you ever asked yourself, “what is financial freedom?”
Regardless of the financial topic you’re reading about, there are sure to be many opinions that disagree with the viewpoint at hand. Is some debt good or all debt bad? Should you consolidate your debt or not? Should you pay off high interest rate debt first or focus on small balances? No matter what the author says (or how much sense it makes), there’s guaranteed to be another side of the story that makes just as much sense.
In other words, there are many routes to financial freedom....and many pictures of what financial freedom could look like.
This knowledge can free you. No longer do you have to feel like what you’re reading is “right” or “wrong”. In most cases, there is no right or wrong answer - it will depend on your situation. So whenever you’re figuring out what to do with financial advice (even if the advice is from yours truly), ask yourself this:
What does financial freedom mean to me?
Going Back to the Beginning
Our money mindsets develop at an early age. Where we come from, how we were raised, the struggles we did or didn’t face....these are the bricks of the foundation of our financial philosophies. And while it may not seem that way on a day-to-day basis, the decisions we make now are largely guided by our past.
In fact, dealing with money every day strips us of the mindfulness necessary to plot out a path to financial freedom. Understanding why you make the decisions you do can help you become more conscious about them moving forward. Ask yourself these questions to understand how your beginnings shape your future:
- Were you aware of the family finances as a child or sheltered from them?
- Were you taught about finances?
- Where was money on the list of priorities for your parents? Why?
- Were there any financial expectations placed on you? Are there now?
- When making the decisions that led you to where you are now, how much of a role did money play (including whether or not to go to college and what to major in)?
Once you’ve looked deeply at these questions, think about how you felt then and how you feel now. Did you go in the direction you were led, rebel, or find a happy medium? Why?
Paving Your Individual Path to Financial Freedom
Based on your answers above, how do you feel about the decisions you’ve made so far? Would you change anything or keep going on the same path? Once you have a good understanding of your roots, it’s much easier to understand where you want to go.
No matter your financial past, today is a new day. Today you can start fresh if you so please - or you can optimize the path you’ve already set out on.
What do you want? Forget about what’s expected from you. Forget about what you think you should do. Your answer will help you define what financial freedom means to you.
Do you want debt freedom? A nest egg for retirement? Do you want to have children? Maybe you want to start your own business, become a solopreneur, or invest in a new career. Buy a house? Travel the world? Start over in your dream location?
No matter your beginnings, life holds limitless possibilities for you now. What are the possibilities that you want to make your reality? There’s no goal you can’t achieve...if you set out a plan to achieve it and maintain a laser focus on getting there. You have the power to turn lessons learned from the past into a lifetime of financial success.
It’s up to you to define financial freedom for yourself - and then to create a plan that will help you methodically reach that goal.
So next time you read an article by me or any other financial professional, ask yourself this: Does this advice make sense for my life? How does it stack up with the plan I’ve set out? Will it optimize my plan or distract from my ultimate goal? That gut check is how you can truly optimize your plan to defining and then reaching your financial freedom.
Shannon McNay is a member of the DailyWorth Connect program. Read more about the program here.