I used to think I had to choose between being happy and being wealthy, but I learned the hard way that I was way off the mark
- I used to tell myself I could either live a life of passion and fulfillment, or I could be wealthy.
- But without learning the skills of aligning my money with my values, I didn't realize I was making all of my financial decisions out of fear: I was afraid that a life of wealth meant selling out to a corporate job and sacrificing what was important to me.
- Now in my 30s, I'm motivated to create a real plan towards real, long-term financial freedom.
- It's important when thinking long-term to consider what you need to be happy and fulfilled, because the truth is this is the only sustainable option.
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I have always been an optimist in both my personal life and in my financial life. So, when I signed up for a year of AmeriCorps service in 2012, my financially conservative family members looked on with supportive skepticism. I pledged to live at the federal poverty level and work at a small, grassroots nonprofit for one year.
Soon, I loaded my car and drove across the country to a rural desert town. In the middle of nowhere, with no shopping malls in sight, people living anti-consumerist lifestyles were everywhere. I even met a man who pledged to live the rest of his life without money.
Emotionally, my new "off-the-grid" lifestyle felt like freedom. But financially, I was about to fall into a trap.
Call it naivete, but in that time, I built up a false dichotomy in my mind. I told myself I could either live a life of passion and fulfillment, or I could be wealthy. Seeing people reject consumerism turned me against money entirely, and I took it to an extreme. I began to travel a lot, scraping together enough to buy low-cost train tickets and see the country. Money was just money, I told myself. But experiences were real.
In hindsight, it's easy to spot my errors in thinking. But without learning the skills of aligning my money with my values, I didn't realize I was making all of my financial decisions out of fear. I was afraid that a life of wealth meant selling out to a corporate job and sacrificing what was important to me. I wanted the freedom to support important issues and travel to new places. I didn't see the irony that by rejecting money entirely, I was becoming even more limited by it.
Now I'm motivated to create a real plan towards real, long-term financial freedom. To gain some insight, I spoke to Kara Perez of Bravely, a financial education community for women. Perez has a similar story of living frugally but still accruing debt.
I told Perez that I began my journey to real financial freedom with three simple steps: Tracking my spending, automating my savings, and side hustling to increase my income by over 50%.
So now the question is - what's next?
Let's go back to that false dichotomy. I used to think that being wealthy meant sacrificing my values, and this is just plain wrong. As Perez says, financial planning is all about values. It's important when thinking long-term to consider what you need to be happy and fulfilled, because the truth is this is the only sustainable option.
So, as I look ahead to my 30s, here are the steps I will take to satisfy my values and work towards financial freedom ... for real:
I will treat investing like a creative project
Learning is important to me. In fact, sometimes I think I took the long and winding road because I wanted to learn on my own terms. But now, there's no reason to waste anymore time and miss out on the benefit of compounding interest. I will now treat investing like any other creative challenge, learning as much as possible in the most affordable ways.
Perez spent three months reading personal finance blogs and books like "The Bogleheads' Guide to Investing." She learned the basics and soon understood the difference between a solo 401(k), a traditional IRA, a Roth IRA, mutual funds, stocks, and bonds. Then, she dove right in!
I will take on high-paying work to fund my passions, not the other way around
A common mistake of many young people is that they expect their passions to pay the bills, and in reality it takes a long time to build up to this. I earned $27 from the first children's book I wrote. My poems, though published, have brought in $50 - and I was told by a mentor that this was good.
The thing about creative passions is that they are inherently satisfying on their own. If they pay your bills one day, great, but there's no sense in robbing yourself of joy just because they can't. And, like a retirement fund, creative talent needs time to mature. Having a well-paying job or hustle buys you just that.
I will learn from older people and think about my legacy
Talking to those who have gone before me always helps me realize what money has allowed people to do. It gets me out of my limited thinking. I've learned that the people who contribute to the world the way they want to are only able to do so if they have financial abundance.
I'm not sure I want kids yet, but I am sure that I want to leave behind something positive in the world. Reflecting on my legacy will be the question that guides this next phase of life.
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