You Don’t Have to Be Perfect to Reach Financial Freedom

This post may contain affiliate links. Please read my disclosure for more information.

For many people, personal finance can seem intimidating. There are a lot of terms, certain do’s and don’t’s, and emotions involved. The more I learn about personal finance, the more I see that the basics aren’t difficult, and this is a message I strive to pass onto my readers.

With all these “do’s and don’ts,” for someone currently in debt, it may feel like making one mistake will derail all progress. You see friends on social media posting about their amazing lives. You see bloggers talking about all these steps you should take and expenses you need to cut. It can leave you feeling like you’re falling behind, that you aren’t doing what you should be doing. It can be overwhelming.

In the same way, I hear all the time about people trying to eat healthier or start a new exercise plan, having one bad day, and then letting that derail them altogether. This is why the overwhelming percentage of New Year’s resolutions fail, people encounter an obstacle and it causes them to give up on their goal.

The point I want to get across today is that you don’t have to be perfect to reach financial freedom. If you’d made mistakes in your past, spent too much, accumulated debt, and neglected saving for retirement, there is still hope. You can make changes today to get onto a better path. Rather than beating yourself up for past actions, make the necessary changes to build a better future. I’ve written about how perfection shouldn’t be the goal, and our thought process for reducing big expenses vs small expenses.

Focus Your Efforts

You don’t have to be perfect at optimizing every single area of your life, focusing on the basics is enough to make huge progress. I recently listened to Scott Trench on the ChooseFI podcast talk about this very concept. Scott is a 27 year old doing amazing things as President of Bigger Pockets and investing in real estate to build wealth. He mentioned that 66% of the average American budget consists of housing, transportation, and food. These budget categories are also referred to as “The Big 3,” for this very reason.

On the podcast he talked about how he focuses his energy on optimizing those three categories as much as possible. By reducing these expenses, he is able to save and invest significantly more money, while putting far less pressure on himself for the other 33% of his budget.

If you get a handle on the basics: keep your biggest bills small, avoid consumer debt, invest in low cost index funds, spend less than you earn – you’ll see huge progress. I still think small expenses are important, namely to focus on the mindset and whether you’re receiving value from this spending, however this takes some of the pressure off. This helps remove the guilt of agonizing over every individual expense. Similar to a diet, if you make the right choices most of the time, one splurge won’t destroy it.

10 Pillars of Financial Independence

Brad and Jonathan from ChooseFI also have a great post called the “The 10 Pillars of FI.” This post is a gold mine of information, identifying 10 key areas to focus on optimizing to achieve the most progress on your journey to financial freedom. You can also listen to the podcast episode here.

Here are the 10 Pillars of FI:

1. Low cost index fund investing
2. Low cost housing
3. Cars
4. Grocery bill
5. Tax optimization
6. College hacking
7. Travel rewards
8. Cable/phone bill
9. Side Hustle
10. Savings rate

Now if you can get to the point where you’ve optimized all ten of these areas, you’re a financial superstar. But a tremendous start is to pick a couple that seem the most achievable to you, and then proceed from there. Once you’ve got a handle on those, tackle one more from the list, and so on. Each of these pillars will lead to progress in your financial journey, but you can reach financial freedom without being perfect at all 10!

My favorite part about these pillars is that each one isn’t groundbreaking or complicated to understand. These areas can be optimized by making slightly smarter choices than the general public.

Final Thoughts

This is something I have to remind myself along my own journey too. Sometimes I try to get too perfect with our budget and expenses, thinking that one month of high spending will delay our long-term goals. This puts way too much pressure on every individual decision. I struggle with being patient and remembering it’s an ongoing journey of improvement. We need to balance pursuing financial independence with enjoying today.

For further reading on the subject of achieving financial freedom without being perfect, I’d highly recommend checking out these incredible posts from Our Next Life and The Happy Philosopher.

Thanks for reading! Be sure to get updates on all of my latest posts by subscribing via RSS, following me on Twitter, and liking my page on Facebook!