When was the last time you looked at your bank account balance and smiled? More likely, the last time you looked at your bank account or budget, you felt stress, anxiety, and maybe even fear. 

Money brings out intense emotions, but they shouldn’t have to be negative. How do we change our perspective on money from one of fear to one of hope, opportunity, and choice? How do we change, at the root, how we truly feel about our money? 

I believe the answer lies in the pursuit of financial independence. The goal isn’t to make a million dollars. It’s to have enough. It’s not about never working again. It’s about getting to choose work that brings a deep sense of purpose and value. Even if you make less money. Or even if you make no money at all. Financial independence is about giving yourself room to breathe and make choices that benefit your life in the best possible way, instead of reacting out of fear of failure or lack of funds. 

Building Financial Independence

Financial independence is a marathon, not a sprint. It takes time, dedication, and consistency to achieve. But how do you get there? 

Mindset

Mindset is a set of beliefs that shape how you make sense of the world. It is a key component of financial independence as it encompasses your why. Everyone’s why will be different but it lays the groundwork to how you think, feel, and act as you navigate your path. It is what you will lean on when things are tough or what you will be grateful for when things are good. Nurturing your mindset through learning about your journey to date, others journeys, or doing intensive work with a therapist or coach can help you identify and clarify your why. 

Value-Based Budgeting

One of the most practical tools you’ll use to get there is a budget. We’ve talked in the past about budgeting in a way that aligns with your values and with your life. This type of value-based budgeting approach is essential when it comes to pursuing financial independence. 

When you work on sticking to a budget based on what you value most, you’ll naturally start living a life that aligns with your financial and personal goals. And, the longer you stick to this budget, the more you’ll focus on spending in a meaningful way, the faster your savings will grow, and the more in control of your finances you’ll feel.

Net Worth Calculator

How do you measure your path to financial independence? Start by keeping track of your net worth. Your net worth, simply put, is what you own minus what you owe. It gives a clear snapshot of your total current wealth minus any debts and can be used to keep tabs on your financial situation. 

Use a net worth calculator online or in a spreadsheet to help you figure out the total value of your assets minus your debts. Net worth can be a great indicator of your overall financial health and makes a great macro tool for keeping tabs on your money habits and goals. Keeping track of your net worth is a great place to start when calculating your own path to financial freedom. 

Monthly and Yearly Check In

As you pursue financial independence, it’s important to regularly check in with your budget, your goals, and your financial situation as a whole. The best way to do this is to make a regular monthly time to sit down with your budget and make any small adjustments as needed along the way. It’s also essential to assess your goals and net worth on a deeper level every so often to make sure you’re still headed in the right direction. Aim to make a deep dive into your finances once a year or as your financial life changes.

Monthly Financial Check-In: 

• Budget Analysis: Assess monthly and make small tweaks and adjustments as needed along the way
• Net Worth Calculator: Update monthly and keep tabs as you pay down debts and grow your savings. It’s encouraging to watch this number grow!

Yearly Financial Check-In: 

• Assess Financial Goals: Update your budget and your financial goals as your life changes. If you make a career change, decide to start a family, or move, your finances will also change. 
• Budget Analysis: As your goals change, make sure your budget fits your priorities. Your budget should reflect your values and leave room for the things that matter most in your life.
• Net Worth Calculator: Evaluate your net worth in a broader sense. Set goals for yourself as you move forward financially and work on dialing in your net worth goals for financial freedom.

Benefits of Financial Independence

When you start putting the pieces of financial independence together, your life starts to improve drastically. Your mindset gives you your why and carries you through the marathon. Value-based budgeting leads to a sense of financial peace, purpose, and control. Focusing your efforts on a better financial future gives you more opportunity, a greater sense of hope, and a reduced sense of stress.

As your net worth increases, so will your sense of financial independence. Being able to watch your assets grow is an incredibly rewarding feeling, and gives you assurance that you’re in control of your money, your future, and your life. 

If you’d like to explore building your own path to independence by shaping your mindset and using your net worth as a tool to get there, I’d love to hear from you.

Photo by Rakicevic Nenad from Pexels