As sad as it may sound, some people in this world will probably never achieve financial freedom. You could be one of them. It’s not because you are not smart or don’t have enough opportunities. But rather, it’s because you’ve put up walls that keep you from getting to that next stage of where you need to be financially.
As you may know, I grew up in a family that knew very little about money outside of working hard to get it and not wasting too much of it.
Growing up, I witnessed my mom work over 100 hours a week to support our family and relatives who could not support themselves. She sacrificed a lot to support up to 8 people at times. No person should ever work that hard for as long as she did.
However, when I was 15 years old, when I started self-educating myself on money, mindset, and success, my mom realized there were more efficient ways to make money than working over double what the average person works.
That was a transformation in my mom’s thinking because previously her financial wall was that she could not see past trading her time for dollars. That transformation started her journey into real-estate investing.
Now I want to help you have your own financial transformation.
In this post, I will go through seven of the most common reasons why so many people struggle with reaching financial freedom. I’ll also explain how you can overcome these obstacles so that you’ll be able to increase your chances of achieving the life you’re after.
1. You Don’t Know How To
If you don’t have a lot of knowledge about money or weren’t fortunate enough to have someone in your life to help guide you, then chances are you probably don’t even realize that something like financial freedom even exists. For many workers, collecting a paycheck and waiting around for Social Security to kick in is the only path to retirement they’ve ever known.
Whenever I talk with people about how they can improve their money situation, a common belief is that they think personal finance is too complicated. Unfortunately, they’ve fallen victim to what the financial industry wants you to believe – that you have to buy their fancy (and expensive) services if you want to build wealth.
However, in my experience, money really isn’t all that tough. There are just a few basic fundamentals that you have to respect. And the more disciplined you are sticking to them, the more on track you’ll be towards reaching financial freedom.
The problem is that only about one-third of American adults understand basic financial concepts. That’s too bad because it’s those lessons upon which great wealth-building opportunities like tax deferment and compound interest can be utilized.
Here’s what I want you to do: Start becoming financially literate today! Get a book from the library, watch YouTube videos, or listen to a podcast about money. Really try to digest the information they give you and think about how you can apply it to your own situation.
2. It Wasn’t a Priority
As the old saying goes, “the squeaky wheel gets the grease”. And that’s true even when it comes to your household finances.
We’re an impulsive species, and when there’s something we want, we tend to put certain expenses before others. Perhaps it’s a new car that costs a little more than we originally budgeted for or something unexpected like a medical bill that wasn’t fully covered by insurance.
Regardless of “why”, long-term benefits like achieving financial freedom tend to get put on the backburner. And until you give these goals the attention they deserve, they’ll just sit idle making zero progress.
Here’s what I want you to do: Turn your future into a reality by verbalizing them out loud. Have a real discussion with someone you trust (a spouse or a friend) and tell them about where you want to be in 10 or even 20 years. Once you do that, your goals will become more tangible, and that will make you more apt to put effort into accomplishing them.
3. You’re Not Following the Golden Rule
Another common excuse I often hear people say is that they “don’t have any money to save”. While that may be true for some, I find it hard to believe for the majority.
Do you really not have any money left over every month, or do you just have way too many expenses? According to research from the Association of Young Americans (AYA) and AARP, more than half of Americans spend more than they earn, meaning the latter is probably the correct statement.
Plain and simple: If you spend more than you earn, then you’re not following the golden rule of personal finance. People have been trying to out-smart and defy this concept throughout history, but like a scientific principle, it always proves to be true.
Here’s what I want you to do: If you have not already, start budgeting your money. Plan out your expenses and make sure they’re consistent with your income level. You can download a free template from Excel or Google Sheets, or start using a free budgeting app like Mint or Pocket Guard. If you want guidance on creating a budget then I recommend reading How to Create a Budget You Can Easily Follow.
4. You’re Addicted to Debt
When there’s something you really want, some people will stop at nothing until they get it. And unfortunately, easy access to loans and credit cards has made it easier than ever to get the money you need in less than a few clicks from your smartphone.
But it comes at a cost. According to data from credit bureau Experian, the average American carries $90,460 in debt among things like credit cards, personal loans, mortgages, student loans, etc. The more we rely on these instruments, the further down the spiral they will drag us.
Here’s what I want you to do: Challenge yourself to avoid debt at all costs. If there’s something you want, then don’t buy it until you’ve saved up the full amount. Yes, it will take a lot longer to get it, but you’ll avoid adding another payment on top of your other expenses which will free you up to save more towards reaching financial freedom.
5. Fear of Trying Something Different
If words like “budgeting” and “investing” scare you to death, then you’re not alone. According to a survey by Capital One and The Decision Lab, 77 percent of Americans reported feeling anxious about their financial situation. That’s most likely because they’re feeling stuck and unsure of what they should try next to fix things.
While it’s perfectly natural to be a little afraid of the unknown, it can become unhealthy when fear paralyzes you into taking no action at all. Doing so will prevent you from taking advantage of time-sensitive benefits like saving your money early and reaping the benefits of compound growth.
Here’s what I want you to do: Start small. If something like investing terrifies you, then open an account and invest a small amount like $100. Doing this will help to break the ice and prove to yourself that it’s not as scary as you previously thought.
6. You Play the Victim
If you’re constantly saying to yourself things like …
- It’s not my fault I’m broke
- My employer doesn’t pay me enough
- I didn’t get a fair shot like those other people did
- I’d be rich too if it wasn’t for [ … fill in whatever excuse you can think of … ]
… then it’s time for some tough love. You’re going to need to stop blaming everyone else and everything, and start taking some responsibility for where you’re at in life.
There are people with far greater obstacles and fewer resources who have become incredibly successful. The sooner you start focusing on the things you can control, the sooner you’ll get on that same path too.
Here’s what I want you to do: Write down five things related to money that you personally have the power to change right now. It could be changing jobs, creating a budget, or even something as simple as cutting out a $100 expense. Whatever they are, change your focus to improving those areas of your finances and use that influence to make a positive change.
7. Because You Believe You Can’t
There’s nothing worse than when someone tells me they think they’ll never be able to retire. Retirement is when people who have finally achieved financial freedom get to celebrate by saying goodbye to their day jobs and spending the rest of their lives doing whatever it is they love.
This is a freedom that everyone should be able to experience. But with less than adequate savings, doubts about their money management skills, and other self-imposed challenges, some people may literally end up working themselves into the grave. Please don’t let this happen to you.
Here’s what I want you to do: Achieving financial freedom starts with making a plan. Figure out how much money you should shoot for and how much you’d need to invest each month to get there. If you want to know more about figuring those two out then I encourage you to read Why You Should Start Your Retirement Account ASAP.
Once you’ve got the structure laid out, you can then start taking action for how you will get there. Every little improvement like saving an extra one percent of your income or figuring out ways to shed unnecessary expenses will take you one step closer to fulfilling your plan and increasing your confidence. And the more you believe that you’ll succeed, the more determined you’ll be to actually make it happen.
Key Next Actions
- Schedule a time to take a serious look at your current financial situation and where you want to be in the future.
- Write down exactly what you want for yourself in the next 5, 10, 15, and 20 years from now.
- Based on the items outlined in this article determine which areas you need to strengthen and use the tips suggested to improve those areas.
- Remember, “The difference between succeeding and failing is consistency” – Don Connelly
- The universe rewards speed, so start taking action today!
LEARN all that you can, BELIEVE in yourself, and take actions that allow you to GROW!
Get your FREE copy of the Expanding Wallet 5 Keys To Success Guide here.
~Success Is Not An Accident~