Financial Freedom and Using Passion to Budget

by Nora Dunn on 30 May 2010 7 comments

Increasing numbers of people are in serious debt and seeking debt management and debt settlement services. Although at first blush you would suppose that it has to do with job loss and poor economic climate, the vast majority of these people are actually high income-earners, with good jobs. What gives? Where is the financial freedom we all are striving toward? I would like to suggest that it’s more achievable than we realize.

It’s tough to live in our consumer-driven society these days. Societal undercurrents tell us to buy, buy, buy. Buy the latest technological gadget, because it will make you more productive (and happy). Buy the latest fashion, because it will make you look and feel good (and happy). And buy your daily latte at the local coffee shop, because it’s delicious, chic, and tasty (and it will make you happy).

If you are vulnerable to these pressures (and we all are — I’m certainly not impervious), then before you know it, you’ll have overspent, even if you have good incoming cash flow. Next thing you know, you’re unhappy and in debt.

So how do we manage these pressures? I believe the trick is to have a passion. If we are undirected, we are susceptible to all the external forces of consumerism around us, and whamo, we’re a full-on rat in the race, wondering when the wheel will stop spinning or how we can get off the ride.

Financial Freedom

What is your definition of financial freedom? Contrary to popular opinion, I don’t believe it has to do with making more money (because the more you make, the more you spend), or having a certain balance in your bank account. Financial freedom is rarely about spending the rest of your days on a beach sipping tropical drinks with fancy umbrellas in them. (As nice as that would be, it gets old pretty quickly).

My current income is a mere fraction of what I made when I was running my financial planning practice. And yet, I have more freedom — financially and otherwise — than I ever have. A friend of mine who runs a fledgling business considers himself to be financially free, despite a lack of surplus cash and long hours. And another friend who is a mature law school student by day and working at night says she, too, is more financially free than she ever has been.

How can this be? Isn’t financial freedom, well, financial?

I think the pattern in all three cases is in our passions. We all work long hours, but we love what we do. We are excited to wake up each day (although admittedly my law student friend is a little bleary-eyed). We have direction, and most importantly, we have a goal that makes us sing.

Goal Setting

If you are in debt, setting a goal that is simply to get out of debt isn’t exciting enough to achieve easily. With a goal like that, the end-game is nothing more than a bank account with a $0 balance. As much of an achievement getting out of debt may be, a $0 balance is hardly something to dance in the streets about.

Instead, the goal needs to be something bigger. Something exciting. Something that gives us butterflies in our stomach.

For myself, initially setting the goal of traveling full-time was exciting enough to get me through the obstacles that stood in my way to packing my bags and getting on that airplane. And in continuing on this path over the last three years, my goal of continuing to make my full-time travels financially sustainable keeps me in check.

I work long hours sometimes (between volunteering and writing), but I do it from wherever in the world I so choose — a nomadic life which has been a lifelong dream. Even though my income is almost ten times lower than it once was, I never truly want for anything.

Achieving Financial Freedom

When I was a financial planner, before pulling out balance sheets and working on numbers, the first thing I did was to ask my clients what they want to do with their lives. I challenged them to dream big, and not worry so much about what’s “realistic”. As a result, I helped people move across the world, open businesses, and own properties. Ask any of these people if they initially thought it would be possible, and they would probably laugh and say no.

Using Passion to Budget

Once you set a goal that makes you sing, all of a sudden budgeting becomes a lot easier. As you contemplate that purchase that is supposed to make you happy, the other side of your brain reminds you that the happiness is only temporary (and often unhappy debt is a consequence), and that your real dream could come true if you exercised some restraint. It’s not deprivation; it’s prioritization.

You’ll begin to see everything with new eyes. You’ll realize you’re unwittingly spending money on things you don’t need, and all of a sudden you’ll start to find money where you didn’t think it existed. Depending on the goal and your starting point, the progress may be slow, but if you keep the vision in mind, it’s amazing how things can fall into place.

A Passionate Goal + Conscious Spending + a dash of Faith = Financial Freedom.

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Abby

Wow, you said that beautifully and congrats on living your dream! This article is very inspiring and has a lot of truth behind it. When you set a goal, one that really moves you, you will stop at nothing to achieve it and I beleive that. I admit I fall into overspending on frivolous items all the time, but in the end only you can make yourself happy. This is great advice I'll keep reinforcing to myself. "It's not deprivation; it's prioritization." What would happen if we all started thinking that way? Can you imagine? :)

Nora Dunn's picture

@Abby - Thanks! I think if we all started using "it's not deprivation - it's prioritization" as a mantra, we could all stand to be a little bit happier, and possibly a little richer as well.

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Curious

Very nice post and very accurately said. Sometimes we don't realize how we are trying to buy temporary happiness and what we miss out on in that process. Its very important to be able to be financially free, things you've always wanted to do are missed otherwise.

Keep Writing!

www.curiouslounge.blogspot.com

Nora Dunn's picture

@Curious - Thanks! I think if we took some serious time to truly define happiness, we wouldn't buy as much stuff. Then again, who knows - this is coming from a person whose worldly belongings all fit into one bag! (smiles)

Guest's picture

A great foundation to any financial management plan is a credit score. Even if you are in debt, there are certainly ways that you can sweep your financial predicament off the floor. Most people perceive their credit score as some daunting, law firm controlled restriction. However, is is quite the opposite... you need a credit score to get a loan, to get that money necessary to pull you from your debts. The major credit bureaus (legally) provide people with a once-annual credit report. So don't be afraid and take control!

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Abby

Yes, very true. I have a prime example that I experienced this weekend when I visited a girl friend in New York. Just having lived there for a few months, she spends an insane amount of money on face products, make-up and clothes, which she thinks makes her feel better about herself because it's the status quo in the city. All the while she's still very insecure and unhappy with herself, but she will just keep buying into it until she realizes this. It's a never-endind road to no where and she could be spending or saving that money on something that will give her pleasure on the inside, because she's not an unfortunate looking woman. Then, I just read an article in Redbook about friends who make you overspend! It talked about having a close FBF (financial best friend) one who helps you stay on track with money because they also want to be smart with their money! good idea

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KimP

Beautifully written and truly inspiring, Nora. I love your mantra, "it's not deprivation - it's prioritization". This holds true for any goal whether it be financial freedom, weight loss, opening a business, getting through college. I love it!