What Does Financial Freedom Mean in 2023? 

The bleak economic situation that stems from the housing crisis, soaring food prices, shortages of supplies of everything, stagnated wages, and interest rates going through the roof (at least in the UK) got me wondering how one could start on the path to financial freedom in 2023.

Taking into consideration the political, economic, social and environmental upheavals we have been going through since the pandemic began, I realised that for me, currently, financial independence doesn’t only mean money safely located in low-cost index funds. It means the possibility and opportunity to change my mind, readjust my path, and have the freedom to help my friends and family. 

For others, financial independence might begin with growing their own food or living in a tiny, mortgage-free house; it could be freedom to travel and take time off and decide what they really need and want from life.  

Over the past three years, since I began taking my finances seriously, I did many of the things the financial independence bloggers suggest:

• I cut down on my spending,
• I started investing,
• I have a solid emergency pot,
• I earn twice as much as I was 3 years ago,
• I stopped spending money on silly and unnecessary things (books are still my weakness, but I’m working on it),
• I befriended charity shops,
• I stopped caring about social status symbols and how others perceived me,
• I buy only what I need,
• I divide all the extra income I have into 3 pots: investments, savings and travel,
• I shop around and compare prices a lot.

I’m more than certain that a lot of those things I’d put in place and the actions I’d taken have prepared me financially for the current crisis.

Increasing my earnings meant that I was able to do some things the financial bloggers advise against before you become financially independent:

• This year (2023), I have already travelled 4x times and, among others, went to Ireland—a trip I wanted to take for years, although it turned out to be mega expensive.
• I started investing less monthly, but my yearly investments have grown.
• I stopped restricting and micro-analysing my every purchase. However, at the same time, I have trained myself to buy only what I need.
• I returned to university for a top-up year (2021-2022) and an MA (2022-2023). I took a student loan for both years, which I’ll have to repay. I live in the UK, and the structure of student finance differs significantly from that in the US. First, I will need to meet the earning threshold before I start paying my loan back.
• I have been investing money in my urban garden. It doesn’t produce enough veggies to cut down on food shopping. I don’t know if it ever will to such an extent to make a massive difference. But the garden helps me keep balanced and mentally healthy and gives me lots of joy. Knowing how to grow food and seeing seeds growing into plants producing food is a priceless experience. That type of knowledge is worth investing in.

Making those choices, which for many people in the financial independence sphere could have been perceived as careless, made me happier, more relaxed, and more confident in myself, my choices, and my earning powers.

Maybe if I were in my 20s and single, I wouldn’t mind cutting my expenses to the bare minimum to become financially independent in my 30s (If I had done it in my 20s and had known what I know now, I believe it could have been possible).

However, living through yet another financial crisis in one of the most expensive cities in the world with a teenage M. and a preschool M. is challenging. As any parent, I want to provide my kids with the best possible education, which doesn’t come cheap. I also want to keep myself healthy and my body in the best possible shape, which also costs money. At this stage in my life, I’m not prepared to cut down on my kids’ education or eat fewer fruits or veggies, especially since I am vegan.

Being more secure within myself and how I budget, earn and spend money helped me understand that the journey to financial independence doesn’t have to be another race to amass 25 times anticipated yearly expenses (I hate racing, and I hate any type of competition).

Looking at financial independence from a more holistic perspective based on prioritisation of individual or family needs (needs, not wants, as we all know those are very different concepts) could lead to a deeper understanding of what financial freedom means to us. That understanding can help stick to the plan for a long time, especially when life becomes too overwhelming.

Of course, it goes without saying that during this soul-searching or adjustment phase, investing even the smallest amounts and putting aside money towards the emergency pot are immensely important.

There is a path to financial independence that has worked for so many. The formula is simple: invest 50-70% of your salary in index funds and watch your investments grow. Low-cost index funds are still the best way to invest in various companies and are less risky than investing in individual companies. However, only some people earn enough to comfortably put aside 50-70% of their earnings, especially when grocery shopping gets increasingly expensive week after week (this is the British reality at the moment).

If one doesn’t earn enough to put the majority of their earnings aside, I feel that figuring out what financial independence means to them personally is the key, and maybe growing a garden or moving to a tinny house is what would work for them.

At this stage of my life, I feel that seeking financial independence is more about pivoting my lifestyle towards smarter choices that have a long-term impact, which includes investing in sustainable, long-lasting brands that care for the environment and the impact they create.

Read financial blogs and take all the advice that applies to you without putting pressure on yourself that you can’t accommodate a particular piece of advice because of your current circumstances. Circumstances can change quickly, but with a flexible lifestyle, you will be able to adjust your life and spendings depending on wherever your path takes you.