Financial Freedom: The Error of Overconsumption

Unless you are already wealthy, it is safe to assume that one of your ideal life outcomes includes attaining financial freedom. That magical point in time where you no longer have to worry about rationing your cash inflow in a way that meets your financial responsibilities and objectives because you have enough money to go around. For many, this may seem completely unobtainable. In fact, it may seem crazy to even suggest it in the first place. However, that depends on your perspective. Financial freedom does not have to mean attaining a level of financial success that rivals that of the celebrities you see on TV. It merely symbolizes a degree of financial success that allows an individual to live comfortably within his or her means without fear of going broke. Unlike the celebrity-sized version, this definition can apply to anybody because anybody can work towards achieving it. Fundamental at its core is the right mental attitude and the right financial approach.

Mental Attitude

You’ll never achieve anything if you don’t put your mind to it. You’ve heard this before, but hearing it and applying it are two different things. If you truly want to start working towards your own financial freedom, the first thing you need to do is adapt the proper mentality: you are the only person in control of your ultimate failure or success. Each and every one of your decisions either detracts from your goal or moves you towards it. The biggest example of this in this context is understanding the difference between your needs and your wants. Ask yourself a simple question each time you make a financial decision: once you account for all of your needs, how much of your wants are you willing to sacrifice to bring yourself closer to being financially free? The more wants you reject, the quicker you can bring yourself to your goal. Of course, the logical extreme of this implies you should lead a hermit life for the sake of a better tomorrow. This is not only unrealistic, but unsustainable. What matters for these purposes are level 2 wants. Things that are simply unnecessary given the particular circumstances because your goal is nothing more than trying to keep up appearances. For example, buying a new iPhone because the one you have is now a version behind and you need to show everybody how you’re up to date. Buying a bigger brand name car because it is cooler. Buying a bigger house because you want to replicate living in a mansion as close as possible to impress your friends. There is nothing wrong with doing any of this if you prefer living in the now, but if your goal is financial freedom you need to be giving priority to wise financial decisions over all other factors. Misguided intentions are your enemy.

Financial Approach

When you prioritize wise financial decisions in your decision-making, you not only save money but you have the opportunity to use that saved money to make more money. However, how to go about doing that is not a topic for this article. What matters above all is your ability to limit your financial obligations. This is not only about not buying everything up like demonstrated in the paragraph above. More importantly, it is about limiting how much of your money you have committed yourself to giving away each month. This is a materialistic world, it is not easy to resist the pressures of mass consumerism. However, you cannot get sucked into this whirlpool of monetary exploitation. For example, very often people are unable to control their spending. They rack up the nice car, the big house, the cool technological toys, and then they have to work their lives away to make sure they have enough money coming in to handle all of these financial obligations. They are not striving towards financial freedom, instead, they are on the unenviable opposite extreme: striving to stay financially viable. This makes them susceptible to financial failure because they do not have the financial flexibility to switch jobs if things turn bad or handle their financial obligations if they get laid-off. An unfortunate consequence of living close to or above their means. This is a self-created nightmare that you can avoid by simply making better financial decisions. Financial decisions that have your own future in mind. Figure out what you actually need, and take care of your basic wants. After that, your focus should be on maximizing your net profits: the money you hold in excess of your financial obligations. With the right approach, that money can be bring you more money and bring you closer to your ultimate goal. Do not to be a victim to the pressures of Keeping up with the Joneses.

You don’t want to be the person that can’t retire because they have lived paycheck to paycheck. You don’t want to be the person that has his or her house foreclosed because something turned financially sour along the way. You don’t want to be in these situations not because they are bad but because you have journeyed through life in a way that ensures you cannot fall victim to these types of circumstances. Place one of your greatest desires, financial freedom, ahead of many of your immediate desires and cut financial corners where you can to make that desire a reality. It’s all in your hands. You certainly don’t need to win the lottery to achieve it if you play it right along the way. Draw a reasonable conclusion about what financial freedom means given your circumstances, and execute a plan to make it happen. Your focus must be on you. Ignore everything that tries to take you away from providing a comfortable life for yourself or your family.