Financial Freedom Mindset – The Catalyst
At the age of 32 and a half, (I know a weird age to reflect on), it hit me. If I was going to work until the traditional retirement age of 65 then I would have to work for as long as I had currently been alive!
Just the thought of that depressed me. My job was enjoyable, but it’s not what I wanted to devote the majority of my time and energy to for the next 30+ years.
I wasn’t ready to just up and quit my job but something had to change – I needed a mindset shift. So after a lot of thought and reflection I adopted a financial freedom mindset.
The financial freedom mindset is shifting your mindset now so that your life begins to reflect your best life without having to wait until traditional retirement age or being fully financial independent.
It is similar to what the FIoneers describe as SlowFI. The two are not exclusive but also not identical. If you are pursuing SlowFI then chances are you may have already adopted a financial freedom mindset.
Envisioning Financial Freedom
The first step towards the financial freedom mindset is deciding what your perfect life looks and feels like. If you have never given any thought to it, now is the time.
Take a minute, right now (well finish reading this paragraph first), and close your eyes. With your eyes closed, envision the ideal day in your best life. What your life looks like once you’ve hit financial and time freedom.
When you close your eyes and imagine your best life and ideal day what do you see? What does your day look like, feel like, smell like?
Okay, now take a minute to actually close your eyes.
It’s okay if when you close your eyes you are not sure what to imagine. But if that’s the case, it’s worth spending some time thinking about it. If you have no idea what your ideal day looks like or what you are working towards, how will you know when you achieve it? Maybe you already have.
Being as specific as possible when describing your ideal day will help you to achieve it. It can also help to keep you motivated. Knowing your “why” or the purpose behind what you are doing can help you stay motivated when the times get tough.
And the times will get tough.
The path to financial independence is not an easy one, it can be simple at times but also mentally draining. It may require changes in behavior, attitudes, and mindset.
That’s where the financial freedom mindset comes in. It enables you to slowly begin to replicate your ideal day without having to wait until “retirement”
Write It down
Now that you have taken some time to think about your ideal day and best life, it’s time to put pen to paper, or fingers to keyboard. Record it. Write a description of your perfect day from the moment you wake up in the morning to the moment your head hits the pillow at the end of the night.
The Beginning of a Financial Freedom Mindset?
At one point when I did this exercise I envisioned myself travelling the world. Never staying in one place for too long. I yearned for a vagabond lifestyle.
My husband and I both have a love for travel. Unfortunately, we soon realized that our jobs weren’t compatible to continuous world travel.
Sure, we could have become digital nomads, or changed jobs. But we liked our jobs, and they paid to support our travel habit.
Instead of letting this get us down, we figured out how to make it work for us. What if we worked for part of the year and travelled for part of the year? We both had jobs that enabled us to take a month off at a time. A month of travel every year was enough to scratch our travel itch.
So that’s what we did.
We worked and saved for most of the year and then planned an epic month long vacation every year. Visiting various continents and going on adventures made our friends and family envious.
We became the people our friends and family lived vicariously through. None of them imagined ever being able to do what we did. They thought of us as different, we were the anomaly.
Getting away just the two of us to reconnect and explore was exactly what we didn’t know we needed. One year we opted to travel with family and never took time for just the two of us to get away. All of our vacation time was spent with other people. The visiting was very enjoyable, but exhausting.
When I went back to work I didn’t feel re-energized. I didn’t feel like I had had the break that I needed; the mental reset.
Seeking a Feeling
That’s when I realized how integral travel and exploring was for my mental health. I needed time to get away with my husband. To be playful and adventurous without the stress we had in our everyday lives.
I love the feeling of being on vacation. Even though at times it can be busy, there is just something about being away on an adventure that just causes my whole body to relax and my mind to be at ease.
What does this for you? Maybe it’s travel. Maybe it’s creating something. Or it could be carving out time to pursue a passion.
What is one thing that you do that just causes everything else to melt away?
Whatever it is, the next time you do it, take some time to note your mindset before during and after. That feeling you get during, that’s what I call the financial freedom mindset. That thing that you are striving to achieve with financial independence.
Reflecting back on my envisioned best life, this was it. For that month out of the year, I was living it.
While on vacation, even if for just a short period of time I got a glimpse of what it would be and feel like to be financially independent. This only happened because I save up in advance for my vacations. I have a vacation fund set aside for all the spending I want to do while away. This way I don’t have to worry about my finances and I can focus on my adventures.
Coming Home and the Crash
I love that feeling. When travelling, the financial freedom mindset comes so easily, it’s part of me. Whenever I came home from vacation there was always a low feeling the few days after. I was no longer on holidays, things didn’t seem as exciting. There was no euphoria in my every day. I hated that feeling.
After one of our epic trips I wondered how I could achieve the financial freedom mindset at home. There had to be a better way that coming home to that low feeling. I was determined to find a way to shift my mindset. But how?
Shifting Towards a Financial Freedom Mindset
Just like I had a balance between my job that was here and my love of travel, I needed to learn how to live my best life everyday day without having to wait until traditional retirement. To find that feeling in my everyday life and not just while travelling or on vacation.
It took me a long time but slowly I started to shift my mindset. I began to look for opportunities to make my every day resemble my ideal day. I started to look for adventure in my local community. How could I my become a local tourist? Or enjoy a staycation?
But it wasn’t just adventure that was part of my financial freedom mindset. It was that feeling of independence, like I controlled my own time.
How could I achieve that at home when I had a “day job” and regular responsibilities?
In order to assess my situation, I did an audit of my day. First I started by looking at all my responsibilities and how I spent my time. Were all my responsibilities necessary or had I put them on myself? What was I spending my time doing?
The Busy Trap
For a while I got caught up in the busy trap. Bragging to others how “busy” I was and how I had no time for myself.
Like being busy was a badge of honour.
Sound familiar? Have you ever got into a discussion with someone and felt the need to one up them with how busy you are?
Why did I place so much value in “being busy” and so much less value on my own time?
When I did have time for myself I was wasting it mindlessly watching television instead of putting my energy towards things I enjoyed. I admit, sometimes I do enjoy watching television and there is nothing wrong with that. The problem was that most of the time I didn’t enjoy it, I was just using television to fill time.
Once I realized I was caught in this trap I looked for ways to get out. Yes, I still had responsibilities in my job and personal life. But I started looking for and realizing that a lot of what I thought were responsibilities were unnecessary busy work.
Besides looking at all my responsibilities, I did a time audit. How was I spending all my time? Was I enjoying how my time was spent or was I so exhausted and checked out from everything that I was just going through the paces?
I didn’t only look at what I was spending my time on by also what I wasn’t.
By doing a time audit I realized 4 key things.
- When I sat down at my computer to “get work done” I was easily distracted by email and social media.
- I could easily cut back on the things I said yes to at work. Often times there were other people that could help, I didn’t have to feel like I had to do everything.
- I spent a lot of time watching television I didn’t enjoy
- I didn’t make enough time to do the things I enjoy just for me like reading, going to yoga, going for a float.
- There was plenty of time in the day, I just wasn’t using mine to do the activities I wanted to do.
Realizing that when I said yes to something I said no to everything else was like a lightbulb moment for me. Learning to say no turned out to be a huge step towards achieving a financial freedom mindset.
Instead of looking for more work, I began to look for ways to become more efficient.
To free up my time as opposed to just giving it away. The more free-time I had, the more I could do with it what I wanted. Now that I knew what I wanted my ideal day to look like having time to do some of those things now which helped to solidify my financial freedom mindset.
My perfect day did not include having someone else dictate how I spent all my time. Even if I wasn’t financially independent enough to live my ideal day, I could still use the financial freedom mindset to try and make today somewhat resemble it.
What about your time? Have you ever done a time audit to see how your time is being spent? Are you spending it how you want to or how everyone else is?
Money & the Financial Freedom Mindset
Reflecting back to that “vacation feeling” and the financial freedom mindset, besides having complete control of my time, I am also not worried about money. In a way for that short period of time I’m living as if I am financially independent.
That’s because while on vacation I don’t have debt. I save up for my vacations all year so that when I’m on vacation I don’t have to worry about money.
One way to do this is to have a separate vacation account.
When I’m on vacation I just spend the money from that account. The trick is to run out of vacation before you run out of money. I tend to be an over saver so have yet to run out of money while on holidays.
Now the trick was to figure out how to do that in my “everyday life”.
How to decrease any money worries?
Looking at all the spending categories in my budget I noticed that housing is my largest cost. If I could eliminate my housing costs, then I would need less money every month.
One way to eliminate housing costs is to house hack.
At times I’m all in on the path to financial independence and my husband is very supportive of all my crazy frugal ideas. But there is no way I could convince him right now to have people move in with us.
There was a time when we had roommates, but now we enjoy our space more than the extra few hundred dollars a month they would bring in to accelerate our path to financial independence. That is the right choice for us right now. The financial freedom mindset is about finding balance between today and tomorrow.
The second option for decreasing the housing line item in our budget is to pay off our mortgage. This is an option I could convince him to get behind.
I know that a mortgage is technically “good debt” but for me it still feels like debt. That isn’t the case for everyone, but I hate having a mortgage. For that reason, when we bought our first home we worked really hard to pay off our mortgage as quickly as we could. We were able to pay off our mortgage in under 5 years.
The feeling of being mortgage free was so liberating. It definitely added to my financial freedom mindset. Every month it felt like we were printing money. We deployed that money to buy real estate investments and have now grown our portfolio to 9 rental properties.
The income from our rental properties is helping us to achieve financial independence earlier. It’s our way of house hacking without having roommates. Don’t get me wrong, self-managing rental properties is work. But the peace of mind they create helps with the financial freedom mindset.
Aligning Your Spending to Your Values
Aligning your finances with your values is a key foundation to the financial freedom mindset. It’s not about depriving yourself or sacrificing the things you enjoy.
As a new momma my ideal day has shifted away from wanting a vagabond travel lifestyle. Now my ideal day includes tons of family time and time and energy for my passion projects. It doesn’t include working a “regular day” job in which a huge chuck of my time and energy is out of my control.
Although I’m not yet at my ideal day, adopting a financial freedom mindset is helping me get there faster.
With the birth of our little one we saw an opportunity to spend a few months together as a family. As a teacher I already had my summer off. I went back to work prior to summer holidays so that my husband could take 4 months of parental leave.
My husband had 4 months off in total with our little one. Their bond and relationship is so strong now because of it. Going back to work a bit early in order to provide them this opportunity was a conscious decision we made. I was never worried about our little one because I knew that she was at home with her dad.
Having my husband go on parental leave was a huge hit to our budget. But we knew that in advance so we saved up before the parental leave began. Having 2 months off together as a family was worth every penny that it affected our budget.
Related Post: FMS – Part 3 – Creating a Budget in 5 Easy Steps
Those 2 months were a glimpse into what financial independence will feel like. Shifting to a financial freedom mindset gave us the headspace to see that as an option.
What are you spending your money on?
Have you aligned your budget and spending with your values?
If you’re not sure, now is a good time to review your expenses for the past few months and come up with a plan.
Related Post: FMS – Part 2 – Goal Setting
Seeking Opportunities for the Financial Freedom Mindset
Now that I was starting to get control of my time and money, I began to seek out things that I enjoyed. Carving out small parts of my day to do whatever I wanted to do, to bring my today closer to my ideal day.
We are the average of the five people we spend the most time with.Jim Rohn
When shifting my mindset, not only did I look at my time and money, I looked at the people I was spending my time with. I started to notice that when I was around like minded people my energy went through the roof. But being around naysayers drained me.
One of my life’s purposes is to help people so the more I can give back, the better I feel too.
The financial freedom mindset helps me to be more mindful of spending more time with people who support me and I can support in return.
Without being aware of how I was spending my time, money and energy I wouldn’t have been in the right mindset to look for opportunities. Now that I know what I want my ideal day to look for I’m continuously looking for opportunities to get closer to that.
Fear & the Financial Freedom Mindset
Fear can be paralyzing. I know for me there are often things that I shy away from out of fear. Even the thought of achieving financial independence can be a bit scary at times.
What if I run out of money? What if I’m bored? How will I socialize? How will I build relationships?
All of these are questions that I have contemplated at one point or another when thinking about financial independence.
The great thing about the financial freedom mindset is that it helps to decrease these fears. I don’t have to do everything at once, but by adopting a financial freedom mindset I can do a little at a time right now before achieving FI.
If I know what my fears are, I can start to taken action related to them. Again, what can I do today so that it slowly begins to resemble my ideal day.
Why wait until financial independence to pursue the things I think I’m passionate about? By trying them out now while I’m still working I can figure out if in fact they are my passions. Once I take action on figuring out things I enjoy doing, the fear of future boredom melts away.
Systematically I can attack all of my fears of financial independence now before they become an issue. Thinking and living like I have financial freedom now gives me a head space to do this.
Financial Freedom Mindset Action Steps
- Envision your ideal day
- Write down or record your ideal day
- Continuously reflect on – what can I do today, so that it slowly begins to resemble my ideal day?
- Do a Time Audit – where are you spending your time?
- Create a budget – does your spending align with your goals and values?
- Seek out opportunities that lead to the Financial Freedom Mindset
- Name your fears and come up with an action plan to counteract them
- Be mindful of your time, money and energy – do they align with your values?
- Use the Financial Freedom Mindset to live your ideal day
Financial Freedom Mindset Final Thoughts
Complete delayed gratification is not for me. I’m not willing to wait another 30+ years to live my best life. Within reason, I want to live like I’m financial independent right now.
Achieving financial independence is not black and white, it’s more of a dimmer switch. By continuously seeking opportunities that align my time, money, energy and values I’m moving that dimmer switch in the right direction.
There’s more to financial independence than dollars and cents. For me, it’s that feeling of independence – like I am in control of my own time. To enjoy today without feeling deprived.
I’m not saying that I’m willing to throw away my financial independence plans for a sports car or shiny new toys. But I am willing to delay reaching financial independence in order to get more enjoyment out of my day today.
Maybe that’s SlowFI, may it’s not. When you change your mindset, and feel like you are living as if you are financially free without sacrificing your financial future, that financial freedom mindset eliminates the need to sprint to financial independence. It’s a balancing act that requires being mindful of your money, time and energy.
Aligning your time, money and energy with your goals and values is the financial freedom mindset.
You don’t have to wait until traditional retirement age or full financial independence for your ideal day and to live your best life.
How can you adopt the financial freedom mindset so that tomorrow begins to resemble your ideal day?