Have you ever given yourself a hard time for the way you spend your money?
Have you ever looked at your bank account and wished you saw bigger numbers?
Maybe you've gotten a paycheck and had to spend all every dollar to pay for basic life needs, or to pay down a debt bill?
Have you ever gone out one night with friends and definitely overspent?
You're not alone. All of these things, across a variety of different income levels, have each caused me financial stress.
Understanding financial stress through life
Welcome to the wonderful world of money-related stress: trying to find the right way to spend your money so you have all of the needs and desires for a good life.
Once you level up your financial holdings, after you have the necessities in life are covered (including an emergency fund), money stress doesn't just go away. Instead of stressing about ensuring that you have food if your stomach and a roof over your head, the stress switches to trying to make enough money to set yourself up to become financially free.
What is financial freedom?
Financial freedom is a big concept and can only be defined in relation to your needs and desires at a given time in your life.
At this money, here's my definition of financial freedom:
Understanding what you want at the current stage of your life, then balancing your current and future spending with your income sources. Putting in the work to curate income sources that require limited amounts of time and energy to maintain. And being able to not let money dictate every move you make, especially when those moves don't align with what you really want out of life.
When I lived at home with family...
If I look back at what money meant to me as a kid, it's easy to remember that the smallest amount meant a lot. Getting 50 cents meant being able to buy a candy bar at the corner store. At that time, 50 cents was more than enough financial freedom for me.
As I grew into my adolescent years, the stress of money first started to kick in. Having brand name shoes, backpacks and clothing was the "cool" thing, and I didn't come from a family that had the money for the highest-quality clothing.
I was well clothed, especially compared to people in many parts of the world, so don't get me wrong. In those early years of being bullied for my clothes, I no longer felt financially free. 50 cents was no longer world-changing. Instead of saving for the clothes I wanted, I chose to spend most of money on candy and Pokemon cards (which I definitely don't regret haha).
During my teenage years, my financial stress had grown to include the desire for music (from CDs to iPods), video games (Windows and PlayStation 1) and, eventually, cars. Even though I had a lot, I clearly remember wanting more of and the best of everything. I spent money and hardly saved anything for long. I still didn't feel financially free.
Welcome to the workforce...
In my house, I was blessed with a family that was able to give me all of the necessities of life (food, clothing, shelter) and just a little more. Although I wouldn't consider us rich, we got by and there was a lot of love.
I learned the power of work when I was young. Every year at Christmastime, my dad would climb high up into an oak tree to saw mistletoe from the branches. We would take it home, tie it up with some holiday ribbon, and walk around the nice neighborhoods with my mom. That little seasonal tradition allowed my brother and I to buy gifts for our family every year (I can't count the number of candles I was able to buy for mom over the years).
When I reached the age to work, I got what I would consider one of the best first jobs you could think to have as a teen: Snowboard rental technician at the local ski resort.
As I ventured into the workforce for the first time, my definition of financial freedom became defined by my desire to put gas in my car to get to work and to see friends, being able to pay for lunch on my breaks, and paying for whatever was keeping me entertained in those days (movies, video games, YuGiOh cards). As long as I had those things, I felt financially free.
Building debt in my 20s...
Most of my 20s were defined by a cloud of debt:
- Student loan debt
- Auto debt
- Credit card debt
- Overdrawn bank accounts
Being able to leverage credit was an easy way to feel financially free. As my income grew, so did my debt balance. I lived in a state of mind where I believed that eventually my income would grow large enough that I would easily be able to pay off my debt. I kept spending frivolously, dreaming that soon I'd become rich enough to pay off all of my debt and pay for everything I wanted in cash...
The downside of that mindset is that it led me into $88,000 worth of debt, which in turn made having a steady job a requirement. I worked hard enough to pay my bills, but by my debt had grown by the end of most months.
Although earlier financial education could have lessened my debt mistakes, I don't regret my past. That was the journey that led me to where I am now. I needed to go through those fires to become who I am today, mentally and financially.
Through most of my 20s, financial freedom was being able to live in the now and afford life's little expenses. I also focused my spending on maintaining my mental health and growing my personal relationships.
Sure... more money would have been nice during that decade, but there's a good chance that I would have still ended up living paycheck to paycheck every month.
Reaching my first big savings milestone...
As I turned the corner into my 30s, I had $1,000 in savings for the first time in my life. I honestly wish I had started writing about my financial journey sooner just so I could have recorded the emotions I felt that.
Having that small sum of money gave me a small sense of freedom. I knew that if a bill came due, I had a safety net that wasn't my credit cards. I still felt the ball and chain of my debt holding me back, but the weight on my shoulders was slightly lifted... and I became hooked on that feeling.
Paying down my debt...
Once my $1,000 savings goal was reached (Dave Ramsey's first baby step), I started to tackle my debt (Dave Ramsey's second baby step). To do so, I started to track my expenses and income closer.
My decision to budget my life more granularly helped me pay off more than two-thirds of my debt it in around two years. I lived a frugal life and looked for all the ways to reduce spending.
For a while, when I was determined to become 100% debt-free, my definition of financial freedom was tied to the idea of being able to pay for everything with cash. I never wanted to let debt control my life.
My current definition of financial freedom...
At some point in my debt-free journey, I heard somebody say something to the tune of:
If all you focus on is paying off debt and living frugally, you're not going to learning about how money really works... and you're probably going to manifest more debt.
This mindset has lead me down a whole different financial path. Nowadays, I am still looking for ways to balance my lifestyle with my income sources.
My current definition of financial freedom looks something like this:
- Being able to feed myself and keep a roof over my head.
- Having the option to live in a clean space where I have enough room for me and my dogs.
- Being proximally close to friends and people I love so I can spend time laughing and dancing with them.
- Getting to travel to beautiful places and explore nature and new cities.
- Saving and investing money every month.
- Being able to treat people I love now and again, while also being able to help those in need.
- Having enough savings to be able to afford an emergency (job, car, health, pet, etc.) if it were to come up today.
If a month meets all of those bullet points, I feel free.
What I hope my financial future looks like...
As I've learned more and more about money, I've learned that it's just a resource that affords you time to do the things you want to be doing. You get to choose where you spend your time and energy when money becomes less stressful.
Currently, I spend most of my time and energy balancing my budget as a way of balancing my needs and wants in life.
In the future, I want to be able to spend more of my time and energy having adventures and dates with friends, working for causes that inspire me, creating art, and traveling the world to inspire more creativity. I also want to be able to become more philanthropic with my wealth in the future, finding ways to help the world become a better, sustainable place to live for everyone.
So many possibilities...
This post was inspired by a conversation I had with a coworker recently. During our discussion, I wrote this note to myself:
Stop trying to find the perfect financial journey for you.
It's not about finding the perfect financial journey, it's about finding harmony in your life with money.