As summer begins to wane, and the school year draws near, it’s an opportune time to reevaluate your finances. Financial wellness is fundamental, but it’s also an important pillar of overall wellbeing. Earlier this year, we talked about how financial wellness plays out in our everyday lives—from providing a sense of security to allowing for spontaneity—as well as tips for establishing healthy saving habits. As we close out the seventh month of the year, let’s dive into financial freedom and the power of setting financial boundaries.
What Is Financial Freedom?
By definition, financial freedom means you are able to make life decisions without being overly stressed about the financial implications. In other words, you control your finances instead of being controlled by them. Due to smart budgeting and preparation, your savings account gives you peace of mind.
It’s important to understand that financial freedom isn’t a quick fix or an overnight strategy. It’s also not a hall pass for being free of the responsibility of handling your money in a smart manner. Rather, it’s the opposite. Achieving financial freedom is a muscle that needs flexing on a constant basis. Having complete control of your finances requires due diligence and conscious spending—particularly if you plan to start your own business.
Achieving Financial Freedom
Not sure how to achieve financial freedom? There are many different ways to go about it. First and foremost, define what financial freedom means to you. It might look something like this:
- Financial freedom allows me to prioritize a career I love without worrying about how much my salary is.
- Financial freedom gives me the ability to take a trip to Europe every year without straining my budget.
- Financial freedom ensures I have money saved in case of an emergency sickness or accident.
- Financial freedom helps me donate a small sum to a charity of my choice every December.
The next step to achieving financial freedom is learning how to manage your money, set financial boundaries, continue to pay off debt, and make a career choice that is interesting to you, fulfills a passion, and supports your goals of financial security. You’ll also want to tap into investment options and continue to strategize on your finances every year.
How To Set Financial Boundaries
Last but not least, let’s discuss financial boundaries. After all, financial freedom isn’t possible without some healthy boundaries. Financial boundaries are money boundaries. In essence, they are rules you set in place to balance the relationship between your finances and yourself. They can also include the relationship between your finances and your family / partner’s finances. Think of them as an imaginary line between your bank account and all of the ways you spend money.
We need financial boundaries, otherwise we would spend all our money and never save it. They help create structure and encourage informed decision-making. Here are four steps to setting financial boundaries:
1. Have clear intentions for the life you want to create and how finances play a role in that.
2. Use an effective system to manage your money.
3. Have an accountability partner/support team.
4. Continue to enforce boundaries in relationships, even if that means being the odd one out.
Setting financial boundaries can be uncomfortable, but boundaries are a key part of living a happy, healthy life. Trust that your financial boundaries are the gateway to financial freedom, an integral part of your overall health and wellbeing.
Images courtesy of Unsplash.