Five Cents Ten Cents

How do you feel each month when it’s pay-day?

Happy? Sad? Neutral?

If one is living paycheck to paycheck, then pay-day is a day for both relief that cash is coming to help pay for living expenses and a worry because it all seems to flow out so quickly before the next month’s payday.

If one is living within the principles of financial freedom, one would be happy to see the salary helping to increase one’s net worth.

As I walk along this journey towards financial freedom, my feelings towards pay-day also changes based on my financial and life situation at that point in time.

When I was younger and single, payday meant seeing my bank balances increase a lot because I lived with my parents and didn’t spend much.

Now that I have a family to support, pay-day is critical in being able to provide for my family and myself with the standard of living that I am happy with. While I look forward to pay-day every month, I’m not so worried about it not coming soon enough ever since I’ve started the habit of recording every expense I incur to know how much money I spend each month and each day.

I realise that once you have understood and started to practice living within your means, pay-day is not so stressful as you’ll have some buffer in terms of savings so that you’re not living pay-check to pay-check.

Building capability in financial freedom

Being able to break out of living pay-check to pay-check requires building the capability to live alongside the principles for financial freedom. It is not so much the lack of a plan that hinders us from moving towards financial freedom.

It is more the lack of developing our capabilities, i.e. our skills, abilities and habits to live each day within the principles of living within your means, save and invest and growing and protecting your means.

How many financial planners help us discover how to build our own capabilities towards financial freedom? They will do a financial “health check” for you to tell you where you are in terms of assets and liabilities. They can do cash flow projections based on when you want to get married, have children, see them through college and retire. But what I’ve not encountered them being able to do is to teach you to build capability towards enduring principles of being financially free.

The reality is that we have to build our own capability towards being able to live within the principles of financial freedom. This capability building requires us to do two things but to do them well:

1) Read, ask questions and find out more about personal finance, investments and financial literacy

2) Practice financial freedom habits bit by bit and improve continuously

Repeat step 1).

Developing your capability

Capability development is simple but it’s not easy. It requires effort, interest and perseverance to continue to learn and grow, practice and make (hopefully small) mistakes and to learn and grow further.

Most of my own capability development has come from visiting our excellent public libraries. Reading blogs, websites and forums and discussion with like-minded friends on what it takes to be financially free. I also observe the lives of my immediate family, siblings and relatives to see how each one has charted their own life nearer or further away from financial freedom.

From my parents, I learnt the capability to be patient, to save and invest and build up my career.

From some relatives, I learnt not to spend beyond our means and to avoid keeping up with the neighbours.

From my own sibling, I learnt how striking out your own business comes with its risks but can also be financially rewarding.

From my good fabulous four friends whom I know from my first job, I learnt to ride the ups and downs of the market and to value family and friends over and above money.

How do you develop your own capability towards financial freedom?

Share with Panzer in the comments section.