Financial literacy is teaching me the true meaning of freedom

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Source: Randy Robertson via Flickr under a Creative Commons license

fin_lit_carnival_2014 Today’s post starts with a confession! But first, good morning and welcome to Financial Literacy Awareness Carnival, being hosted by Shannon at The Heavy Purse.

A confession

Now, the confession: frugality is hard work!

Sure, this may not seem like much of a confession, but it’s something I don’t acknowledge often enough.

When I first decided that I was going to be very serious about personal finance, it was even tougher for me. That’s because the only thing that can make frugality tougher is going at it without being financially literate.

Enter financial literacy

For those who are frugal but not financially literate, frugality is all about less. It’s about eating and drinking less, doing less, spending less time, and saying yes less often. I did less of all these things and many others.

And yes, I did see results — big results even — but too frequently, I got the feeling that they weren’t commensurate to all the “less” I was experiencing.

My aha moment

My aha moment came slowly.

The first thing that financial literacy taught me was that not all frugal cuts are the same. For example, stressing out over saving a dollar on a keyboard I’ll use for four years isn’t worth the time when I could save a dollar every day by packing my lunch.

The second thing that financial literacy taught me is that it matters where I put the fruits of my frugality. Using the cash I save to pay down high-interest debt or to invest in a tax-advantaged retirement account could have a much bigger impact than whatever else I was doing.

But neither of these would be my aha moment!

That wouldn’t come until I realized that frugality for frugality’s sake wasn’t the point. Paying down debt isn’t even the point. The point of both of those things is that they give you the freedom to do the things you’re really passionate about.

And my aha moment finally came when I realized that frugality isn’t about having less of everything; it’s about having more of the things you care about.

And for that to happen, it takes personal reflection to prioritize what matters and the financial literacy to know which tools to get there.

Have a great Wednesday, everyone :)

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Comments

  1. says

    I love that you say that frugality isn’t about having less of everything but more of what you care about. It’s true. Frugality is about making choices and if you make the smartest choices based on your individual goals and needs, then you actually end up happier in the end.
    Shannon @ Financially Blonde recently posted…Salary HostageMy Profile

  2. says

    “I realized that frugality isn’t about having less of everything; it’s about having more of the things you care about.” LOVE that, Mario! It’s so true. People get caught up in pinching pennies and forget about the big picture … it’s putting your money on the things you love. And being smart how you GROW money, and not by just cutting back (which certainly plays an important role as people do spend mindlessly) but real growth is when you can take your savings and grow them quickly to use on the things that truly matter. Thanks for participating, Mario! I appreciate it!
    Shannon @ The Heavy Purse recently posted…2014 Financial Literacy Awareness Carnival: Money A-hasMy Profile

  3. says

    As you know I’m not a huge fan of frugality for frugality’s sake either. “..frugality isn’t about having less of everything; it’s about having more of the things you care about.” – that’s your winning line there my friend. Great post. Happy Wednesday! :)
    Girl Meets Debt recently posted…My Debt “A-ha” MomentMy Profile

  4. says

    And if the “more you care about” is money it’s a big win-win! Just kidding (sort of). But frugality does get too bad a reputation. I do exactly what you said your “a-ha” moment was. I pinch pennies in areas I don’t care about so I can funnel my cash towards the things I want to do. I don’t need a beautifully decorated apartment, I’d much rather day an awesome trip.
    Broke Millennial recently posted…Confession: I Didn’t Have a Savings AccountMy Profile

  5. says

    “frugality isn’t about having less of everything; it’s about having more of the things you care about. ”

    I couldn’t agree more. People who aren’t frugal generally don’t get that. They think that frugality is about deprivation- it’s not.
    Holly@ClubThrifty recently posted…I Hate Spam: A RantMy Profile

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