How to Know Your Why on Your Path to Financial Freedom

No matter the definition, everyone wants to gain financial freedom or, if you prefer, financial independence. I think financial freedom describes what financial independence offers – freedom, choices. It's the freedom to make decisions about your life (work, where to live, what to buy, etc.) without concern about money. People who aren't successful on their journey often don't have a real motivation behind the effort. To get there, you have to know your why.

That may sound funny. I'm not even sure it's grammatically correct — substitute purpose for the word why and it probably makes more sense. I like “know your why” better. Grammarly tells me to change “your” to “you.” Huh? It also suggests changing “why” to “way.” Since I'm writing the post, I get to choose the words I use. The grammar police will have to get over it. Know your why works for me.


Financial freedom may mean seeking retirement at an early age or in the more traditional way of working and saving over a long career and retiring later in life. I find that those who achieve financial freedom early have one thing in common. They know their “why.” Our purpose, or why, is what keeps us on the journey. Without it, we may feel stuck in a job we don't like, working longer than we want, and struggling to be content in our circumstances.

When a purpose drives the process, it's much easier to stay focused. If we're just working to draw a paycheck, misery usually accompanies the journey.

What if you've never identified your purpose, your why? Maybe you don't know where to start? Don't worry. What follows is a roadmap to help you find and understand your why.

Let's start with a definition.

Know Your Why

It starts with purpose.

Purpose – defined

Here's how defines purpose:

  1. The reason for which something exists or is done, made, used, etc.
  2. An intended desired result; end; aim; goal.
  3. Determination or resoluteness.

There is a lot to unpack here. The first definition gets to the heart of it. Our why or purpose is “the reason for which something exists or is done...” We could write a whole series on this if we wanted to get into the weeds. It might be a fun exercise and would likely initiate a lot of comments.

I'll stick to the topic at hand as to how our purpose can drive us toward financial freedom.

Money without a purpose

If the driving force for our financial freedom is to accumulate wealth and stuff, it will be hard to sustain our efforts. Money is usually not the best motivator. Collecting stuff will not make us happy. Why?

We'll never be able to accumulate enough stuff to fill the gap. The more we have. The more we will want. If we strive for the newest, most shiny objects, there will always be something on the horizon we want. Money without a purpose still leaves us empty. It should be a means to an end. If it is the end, it will cause more problems than it solves.

Maybe the drive comes from a competitive attitude where we compare ourselves to others and want to “keep up with the Jones.” Or perhaps we find our identity in what we accumulate. These things may also represent success in the world. I've met many unhappy millionaires.

The number one issue that hurts marriages is money. I'm not suggesting that if you live this way, your marriage will end up in divorce. Evidence suggests, though, that the chances increase substantially. According to this report from, the number one cause of divorce is infidelity.

The number 2 cause – Money

Different studies show differing results. Money is near the top of the list of all of them.

Money with a purpose

If our drive for money is to help us to achieve the lifestyle we want, we'll have a much better chance of success. When you know your why your efforts point toward something of value.

Personal values drive behavior. Values help guide the decisions we make. They keep us on track. They help us avoid making dumb mistakes. We should make spending, saving, and investing decisions should with our purpose in mind. We will be more likely to stick with our budgets. It will be easier to save more. The debt we accumulate, if any, will be carefully analyzed and weighed against our values and purpose.

A valueless pursuit of money does just the opposite. Our savings habits will suffer. If not backed by the “why,” our success will be elusive. We will always be restless. There will still be something else to chase. People driven by money are often workaholics. They have little time for spouses and children. Many justify their behavior with the declaration that they're doing it all for them.

Their families would likely tell a different story.

Goals and behavior

If I asked you to define your “why,” could you? The answer for many people would be no. Knowing your “why” helps you navigate the chaos in life.

Many of us go through our lives on autopilot. We work our 9 to 5 jobs, never considering the possibility of other options. Maybe we have high-paying corporate jobs we don't like. Because of the income and responsibilities we have, we feel like we have no options but to stay.

Most of us have some goals in life. Some of these goals are small and short-term. Other goals are more significant and long-term. They may be career goals, exercise goals, weight loss, be a better parent or spouse, make more, save more, and the list goes on and on.

Do goals drive your behavior? Or are they like New Year's resolutions; they last for about a month and then disappear.

Until you can know your why for these goals, they will, more than likely, fade away and get replaced by the next new thing.

How to know your why

Self-examination is the place to start. As yourself these three questions:

  1. What do you think about?
  2. How do you spend your money?
  3. How do you spend your time?

Your thoughts

What we think will be the easy one. The results show up in how we spend our time and money. Those things define what's important to us. They represent our focus.

Many of us think we're good at multitasking. The truth is we can only focus on one thing at a time. Our activities and the things we have will tell us where that focus lies. It may not be the way we think it is or the way we want it to be. Nonetheless, the proof is there if we wish to see it.

Your spending

Open up your checkbook and credit card statements to audit your expenditures over the last sixty to ninety days. You can do this manually with a spreadsheet or use some of the online tools available. is a great tool to accomplish this. You can connect all of your credit cards and bank accounts to the app — all transactions transfer. There are preset categories that Mint will try to match. You can easily set up new categories and add others that don't match.

Some reports document how much you spent in each category.

Personal Capital is another excellent tool. Its dashboard is as good as I've seen in these apps. It has a very robust investment feature, as well. You can link all of your investment accounts, whether brokerage, IRA, or company retirement plans. Track your net worth and see your entire financial picture in one place.

Whether via a spreadsheet or one of the online tools, this spending report tells you what's important to you.

Aligning purpose with life

When your audit is complete, you'll have to decide whether that picture reflects who you say you are. If it doesn't, think about what that picture should be. Do you think of yourself as a generous person? If so, your activity should show that you regularly volunteer your time helping others. Your giving statement should show an amount donated to the church or your favorite causes at a much higher percentage than the 2% – 3% national average.

If you think of yourself as someone devoted to your family, the time you spend with them should reflect that. When you're at home, are you working on your laptop at night? Do you come home from work to enjoy dinner with your family? Do you attend your kids' sporting events, plays, concerts, etc.? If the answer is no, your activities don't match up to your stated purpose.

Do you see yourself as someone who is planning for a comfortable retirement (early or otherwise)? If so, do your retirement accounts, and other savings and investments reflect that? Do your retirement and investment statements show you're saving more than the minimum amounts toward those goals?

When the answers to these questions are no, your “why” may not be what you say it is.

J.D. Roth from Get Rich Slowly produced a detailed how-to video on What's Your Why. He asks a series of questions to help you identify your “why.” J.D. walks you through a process that will guide you down the road to know your why.

Final thoughts

The subtitle of money with a Purpose is “knowledge to help align your money with your life.” The most successful people I know understand their “why” in life.

The fundamentals of achieving financial freedom are not complicated. If you read this or any other personal finance blog, you'll see some version of the following three principles.

  1. Spend less than you make.
  2. Save and invest the difference.
  3. Minimize or eliminate debt.

Without a “why” to accompany these principles, it will be challenging to find the discipline to execute them. Your why, your purpose, reflects your values. Your values drive what you think about. What you think about will drive how you spend your time and your money. Like many things in life, these are simple principles to understand. Though simple in theory, they can be hard to execute.

Having the right attitude is essential. By the way, financial freedom doesn't come with a particular dollar amount assigned to it. I've met people who make $30,000 a year that would describe themselves as financially free. I've also met people who make $1,000,000 a year who are struggling. So don't think because you don't make a lot of money these principles don't apply. They do.

If you haven't audited your spending, saving, and investing recently, there's no time like the present. Check out and Personal Capital, two great tools to get you started and help manage your finances. Let your purpose come to life. Let it drive your behavior. If your actions don't match who you want to be, dare to make some changes.

Live your life on your terms. Those are the only terms that matter.

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