Change Your Financial Situation, Change Your Life

Change Your Financial Situation, Change Your Life

This post was originally published on 4/21/2016 and updated on 5/21/2024.

Being financially secure is going to change your life. And no, I’m not just being dramatic here. It’s not an understatement. It is literally going to change your life. If you don’t believe it, then you don’t yet realize how much of your life energy you spend worrying about money and money-related things.

I’m not even talking about reaching complete financial independence. I’m talking about having financial security (some of which involves your money mindset!).

What is Financial Security?

The Merriam-Webster dictionary lists the following definition of security:

When we think of security in the context of financial security, we often think about the first part: freedom from danger.

To obtain financial security, you must have enough money to cover all your bills, savings for emergencies, money set aside for future needs such as retirement, and adequate insurance to protect you from financial “danger.”

However, there is another element to financial security and that’s freedom from fear or anxiety. Often, this is even more difficult to reach because it involves changing our mindset.

One of my favorite quotes is:

“If you save money out of ANXIETY and FEAR,
you will just feed
MORE FEAR and ANXIETY.”

Happy Money (Ken Honda)

There is anxiety and fear at both ends of the wealth spectrum. Those in poverty worry about money because it’s necessary for basic survival. Those with extreme wealth have fear and anxiety about money as well, though, and for some, it’s never enough.

By approaching both the logistical and emotional aspects of money, you can reach a level of financial security where money is a positive tool in your life.

Reaching Financial Security – My Story

When I was a newly married college student, I had a notebook where I kept running totals of our income and expenses for the month just to make sure we’d be able to pay the bills before our next paycheck hit the account.  An unexpected bill was a big stress on our tiny budget and we had our fair share of arguments when one person wanted to buy something that the other person thought was an unnecessary expense.

We graduated college (although it does seem like it takes forever, right?), started full-time jobs, bought a house and cars, and still were basically at the same point for a while where I was tallying up the timing of the income and expenses to make sure that the paychecks would come before the bills were due.

Eventually, through career advancement and time, we put money aside in savings, which we then used as a down payment on a larger home to accommodate our growing family. Yet again, for a while, I was tallying up money to make sure that our income and expenses were aligning to make all those payments on time, not necessarily living paycheck to paycheck but without enough savings to make me feel really comfortable with unexpected expenses.

To make a long story short(er), we ended up as expatriates in Asia for a total of eight years, an experience that changed our entire lives, both financially and in every other way. We received some extra bonuses that more than made up for me no longer working, we sold our cars, rented out our house and our international rent and utilities were paid for by the company. We were able to pay off all our debt, increase our retirement contributions, nearly pay off our mortgage, and had a cash reserve that would cover essentially any emergency.

Having this financial peace of mind is something that I wouldn’t trade for any tangible object in the world. It changed my life, just as I promise financial security will change yours.  

Here are just a few ways it has impacted my life:

  • I have everything on automatic bill pay and know that even if life gets busy, everything will get paid on time and there are sufficient funds to cover it all.
  • Tracking expenses is no longer about ensuring I’m able to make ends meet, but because spending in line with my values and goals is important to me.
  • Financial “emergencies” are now minor annoyances than a full-blown crisis.
  • I’m able to spend more time with my kids since I’m not so focused on making more and more money.

I’m working toward financial independence, but I’m already at a point where I can enjoy my life, even without being wealthy.

Are You Financial Secure?

If you’re wondering how finances are affecting you personally, consider the following questions:

  • Do you dread paying your bills every month?
  • Do you and your spouse argue about money?
  • Are you living paycheck-to-paycheck, always having to check to ensure you have enough until that next payday?
  • Are you stuck in a job that you hate, but you can’t quit because of money?
  • Does it make you anxious when considering what an emergency trip to the hospital would mean for your financial situation?
  • Do you have debt that keeps you awake at night?
  • Are you worried that even short-term unemployment would mean being unable to pay your immediate financial obligations?
  • Are you just worried about your entire financial situation???

Even if you answered yes to just one of these questions, you’ll be surprised at how big of a difference it makes in your life to get rid of money-related worries!

The Path to Financial Security

You may not have a sudden drastic change in financial circumstances as I did. Still, you likely have an annual bonus, tax refund check, or other unexpected income that you can put toward your goal of financial security instead of something that you’ve been wanting but don’t really need.  

Little amounts do add up, and if you realize how much peace of mind it will give you, you can likely find somewhere in your budget to start adding to this every month.  

Where do you start? By creating a financial plan.

  1. Think of at least one goal that you’re passionate about achieving in your life.
  2. See where you’re at financially by creating a list of all your assets (cash, investments, etc.) and liabilities (debt) to reach your current net worth.
  3. Conquer the money mindset issues holding you back from reaching your financial potential.
  4. Set up a budget and stick to it. Track your expenses to ensure that you are within your budget.
  5. Fund a cash reserve and emergency fund.
  6. Make a plan to reduce your debt.
  7. Make sure you’re adequately covered by insurance.
  8. Invest for your future.

Final Notes

It’s difficult to describe how financial security feels to those who haven’t had the opportunity to experience it. When we add the emotional aspect of money to the logistics of creating a financial plan, we can better understand what financial security means.

More importantly, we can forge a path to create the financial security that will change our entire lives for the better and allow us to live our best lives.

What is your plan for achieving financial security? 

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5 Responses

  1. I’m far from being debt-free as I am still a college student, but hope to take a semi similar route as you and your husband did. I am debating on the option of becoming an English teacher abroad to help shed some debt and travel the world simultaneously.

    1. There are some amazing opportunities out there to be able to teach English in Asia. We met lots and lots of people in your same situation in China and Korea that loved their jobs teaching English and traveled all over Asia during the school breaks. Making money while being able to travel is a dream! Good luck with your journey!

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welcome!

I’m Kathryn Hanna-wife, mother of 3 and a Certified Public Accountant. I love to budget (really, I do!) , build spreadsheets and spend money on travel, sewing supplies and good chocolate.

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