Approximate read time: 9 minutes

At its core, financial independence is simply having enough money saved or as passive income to cover your living expenses for the rest of your life. It means you (and anyone you support) are not reliant on a job or anything else for your financial well being.
According to traditional financial literacy there are just two levers that you have control over that affect your level of financial independence:
Asset accumulation, and reducing expenses.

Asset Accumulation

This means either having a pot of money that is liquid (quickly accessible), or assets (business, rental property, and/or investment portfolio) that cash-flows enough to cover your expenses.

Reducing Expenses

Reducing or controlling expenses seems extremely straightforward, right? But as we’ll talk about in a later section, this is the controllable that has the potential to derail your financial independence (FI) plans, but probably not in the way you are thinking.

What is the purpose of financial independence for you?

Financial independence is a goal my clients and I are always working towards, but that doesn’t mean everyone’s version of financial independence (FI) is the same… nor should it be. Deeply understanding what FI looks like for you and your family is important, and will likely change over time. So before we move on to the myths and realities of FI, let’s take a moment here to really understand what FI might look like for you.

Question 1: Let’s imagine all of your financial independence goals have been met.  What does a day in your life look like?  From the moment you wake up, to what you wear to what you eat and what you do with your time, what does a normal day in your life look like?
Question 2: What are you able to do in that life that you can’t do now? How would your life feel different? How would your mindset be different?
Question 3: For each answer to question 2, ask yourself “Why is this important to me?”

So if you answered “I wouldn’t be so stressed.” to question 2, ask yourself “Why is being a being less stressed important to me?” I know it seems obvious, but your answers to these questions are going to be the gravity pulling you towards FI.  If the reason you want to be less stressed is because you’ve lived so long this way, or you feel like you’d make better decisions if you weren’t stressed, that is deeply important.

This goes beyond “knowing your why” and into the core of who you are and how FI could be of service to you.

Financial independence must be of service to your life, not the other way around.


With that in mind, let’s talk about some myths an realities around financial independence.

Myth #1: You can’t use credit cards if you want to be financially independent

Regardless of income, you can use credit responsibly AND have it benefit your financial life. If, and only if, you can trust yourself.

Yes, the credit industry has been built around, and makes absolute boatloads of money off those of us who do not have the tools to trust ourselves with money, and that industry is in no way required to teach us how to do that. But for the small percentage of people who do trust themselves, using credit cards can afford monetary rewards, extra protections, and bells and whistles we don’t get by using strictly cash (which is nearly impossible in our world) or debit cards.

The knee-jerk fear reaction to using credit cards only reinforces a sense of scarcity and the idea that of course you can’t be trusted to have a credit card!

That’s just bullshit, friends.

Everyone, regardless of background or income can develop the resilience it takes to trust themselves with credit and use it responsibly. And yes, sometimes that means not having any credit cards, but sometimes it does.

Myth #2: You must restrict yourself

The default to restriction makes perfect sense, right? If you want your hard-earned income or savings to last longer, don’t use it, conserve it through restricting yourself, grind out your work, and tough it out.

But it’s not that simple.

Restriction, overwork, and burnout lead to failure, setbacks, and in some cases outright rebellion to those superhuman restrictions. (Even if you set out those restrictions for yourself)

“So we’re just supposed to spend without restriction, just spend willy-nilly with no plan, Hanna?!”  I hear you asking.

The opposite of restriction isn’t free-wheeling, unplanned, reactive spending.  The opposite of restriction is thoughtful, mindful, spending and financial choices.  Restrictive, premade budgets and expectations do not allow for change in your life, and if there’s one thing you can expect from your life, it’s change!

Intentional, thoughtful, and planned spending goes a long way towards combating the emotional decision making that restriction can cause.

Myth #3: Set a goal and stick to it/Set a budget and stick to it

Oh if it were just this easy!

I’m sure you’ve already heard this as you’ve been researching financial independence, and it seems seductively simple.  And because you’ve heard this particular piece of “wisdom” so many times in your life, it may seem like it really IS that easy to just set out an expectation for yourself and be able to keep it regardless of how things change around you.  And it may even look like everyone around you is able to set one budget and keep to it.  But trust me, they are not.

Creating a budget for yourself is so much more complex than just downloading a percent-based budget off the internet and expecting yourself to duplicate that month every month until the end of time.  But evolving your own adaptive, personalized budget doesn’t have to be like pulling teeth… in fact if your budget gets easier to use over time, that’s just one way you know your budget is working!

Taking the time to develop your own budget (I use and teach a modified Zero-Based Budget) is a great first step before even beginning your financial independence adventures.  The ability to observe your own spending with a clear eye is critical to planning what your financially independent future looks like.

Myth #4: There are only two levers you can pull for Financial Independence

We talked about these above, but traditionally there are only two things you have control over, your income (or savings), and your expenses.  The third, rarely talked about lever, is your level of planning.

And you can’t just make this plan once… it needs to adapt.  Most FI calculators will take into account your age, your spending, your family size, and even inflation, but nothing can predict how your life is going to change.

Did you just say to yourself, oh Hanna, you don’t understand, once I’m financially free my life won’t really change.  Well you, my friend, can skip down to Reality #2.

Let’s talk about some hard realities around financial independence.

Reality #1: “Financial Independence” is a marketing slogan

The idea behind financial independence is sound, and whether my clients and I use those words or not, is underpinning all of my work as a holistic financial coach.  Unfortunately, the term “financial independence” is so sexy, and so simplistic that it has become a wide-spread buzz word used by people and companies keen to ensure their own financial independence by removing your money from you.  From full on scams, to MLMs, to financial products you may not need, there are seemingly unlimited opportunities for someone out there to prey on your desire to have a secure and healthy financial future.

Being aware of these financial independence scams, is the first step, and it’s easy to spot them once you know what you’re looking for.  Being on the lookout for these scams is a great way to protect the time and energy you’re devoting to your actual financial independence.

Reality #2:  Financial independence makes two huge assumptions:

“Your lifestyle will not change”
“Your tastes will not change”

Traditional Financial Independence planning is static.  You plan for this once, and you stick to that plan.

But without an adaptable, changeable plan you will always be behind the eight ball and always in reaction mode, which is precisely what financial independence is meant to counteract!

Reality #3:  Your life WILL change

All humans suffer from the “End of History illusion”.  Our brains are great at thinking about the past, great at thinking about the present time, but really kind of terrible at thinking about the future.   Thinking about the future is difficult, and our brains take a few short-cuts when it comes to predicting or even thinking about the future and all of its variables.

The End of History Illusion means that as we think about the past we factor in all the things we’ve done, survived, mastered, and overcome. We can look into our pasts and see a deep history of growth, evolution, and change. At all stages of our development, from babies to old age, however, we are not able to accurately predict our future level of change even with all that great data from the past! This is not a personality defect. This is part of being a human. And it’s part of being satisfied with who you are right now. That satisfaction biases us against the idea that our lives could possibly change any further.

Let me put it like this. On a scale from 0-10, 0 being no change, 10 being everything has changed, how much do you think your life will change in the next 10 years?

Now look back 10 years. How much has your life changed in these last 10 years? How about the 10 years before that? My guess is your first number is much lower than your second. Most of us will predict our lives will change much less in the next 10 years. That’s the end of history illusion.

How does this impact your planning for financial independence?

Right now, as you are laying out even the most basic of predictions about your life in the future, your very normal brain is vastly underestimating the level of change you will go through.

What follows is a dissonance between what you expect (your FI plan), and what will happen (change, change, change). Financial independence planning is traditionally unforgiving, rigid, and static. And when the changes in your life hit and your plan doesn’t meet that change, it can register as a failure.

But you can build your financial plans with change and flexibility built in, which leads us to our next reality.

Reality #4: Your planning must change as your life changes

I don’t imagine you’ve ever had the same month financially two months in a row, or maybe even EVER.

Every month, year, and season of our lives is different, and that’s a good thing. I do not want my clients to be able to have a life that never changes… that sounds absolutely horrible.

Building an iterative system around yourself is critical for any financial planning, whether it’s this month’s budget, next year’s vacation, or your retirement 20 years from now. Iteration, evolution, and change is the secret third lever that you have control over.

Learning how to build a money system that changes with your life takes experimentation, the ability to be aware of your spending without judgment, and most of all, grace.  System-building is a skill that can be learned over time, and will deeply impact your entire life.

ANY financial plan that does not change with your life will fail.  I’m not saying YOU will have failed, but that plan certainly will.

Reality #5: If you don’t trust yourself with your money you will not be financially independent

Long-term planning of any kind takes resilience.  And there is no difference between trusting yourself and resilience.  If you can trust yourself… if you know that you’ve always got your own back, you can choose to extend or withdraw that trust to other people and situations you come across.  And the ability to trust yourself means that when you misstep, and you WILL misstep, that trip becomes valuable data towards your growth, not a condemnation on your worth as a person.

We are given very few tools in this world for how to build resilience and trust ourselves.  Thankfully, my curriculum is full of them, and most of them are games.  Learning resilience through games keeps the stakes low, and makes working those good resilience skills into your life easier.

Any financial plan started without you being able to first trust yourself with money WILL fail.

Your very next steps:

    1. Before you punch numbers into an FI calculator or set a timeline for when you’ll be financially free, go back up to the top of this article and work through the questions under “What is the purpose of financial independence to YOU?”
    2. Reach out below or shoot me an email at!
Last updated: April 2023

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