3 Steps to Financial Freedom

The best time to plant a tree is 20 years ago. The second best time is now.- Chinese Proverb

Gaining control over your money fills you with a great sense of personal freedom. Along with building your financial autonomy and being a major pathway to achieve your goals, it reinforces to you a constant sense of personal achievement.

Plant a tree
Plant a tree

Some people seem to be born with the good money management gene: they maintain the focus and discipline to ensure that money always works for them without it constantly needing to be at the forefront of their thinking. For many others, however, managing money is a series of false starts. They struggle to get on top of their finances or else live with a constant sense that they could be doing so much better with what they have. Meanwhile, they lie awake at night worrying about their unpaid bills.

There are people who earn modest incomes yet manage to stretch their dollar to buy what they need, attain financial security and lead rich, meaningful and happy lives. I know others who earn good incomes but are living from pay to pay in a constant state of debt and are quite vulnerable. When looking at what it takes to be a good money manager, I believe not enough attention is given to broader factors that go into shaping our relationship with money, such as behaviour, environment and identity.

Balancing a budget is not complex or difficult to learn and so if that was all that’s required to be a good money manager, then most of us would be! We've heard many, many reasons as to why people are in the grip of their money, such as:

∞ I don’t make enough, once I earn more, I’ll get through my troubles

∞ I’m hopeless with money!

∞ I could do more, but I don’t have the motivation to make my money work harder

∞ Just when I get it together, something breaks down and I’m back where I started!

∞ I’m stuck in a debt cycle and I can’t pay off my cards!

What sits behind these statements is what I call ‘money identity’ – that is, how people see themselves in relation to money; and what’s common to all of them is that money has the upper hand. However, our destiny needn't be tied to dated identity – we can change the way we see ourselves, from:

∞ I am financially insecure to I am financially secure

∞ I am a spendthrift to I am a saver

∞ I am financially fearful to I am financially confident

∞ I am a debtor to I am an investor

∞ I am financially illiterate to I am a master of my finances

∞ I am ambivalent to I am purposeful

The journey from being beholden to money, to being in control of YOUR money is transformational, and therefore not without its challenges. However, it is a journey of just 3 phased steps:

1. Finalise a set of goals that you want to achieve that have purpose and meaning for you

2.  Access the right tools, and use them effectively:

∞  A plan, including a budget

∞  A cash management structure

∞  Knowledge/information

Meaningful reporting, including regular feedback and progress

3. Build and maintain your momentum with commitment and motivation

In coming posts, I’ll explore some of the practical and emotional steps we can take to improve our ability to gain control over our money. Next, I'll look at the role of meaningful goals in your journey to Financial Autonomy.