What do you think of when you imagine being financially independent? Living on an island in the South Pacific in the lap of luxury? Being able to buy anything and everything you want? Owning 12 cars, a yacht, and a mansion in Beverly Hills? Indulging in all those "Lifestyles Of the Rich And Famous" fantasy that the media has planted in your head? This sort of daydream might be part of the reason why so few of us ever discover what real monetary security feels like!

Here's a little reality check for you -- financial freedom has nothing to do with the size of your bank account or investment portfolio. It's not determined by what you own or buy. In fact, financial freedom is less about wealth and more about liberty from monetary worries. Someone who earns $10,000 a year can achieve financial independence as easily -- sometimes more so -- than a person who earns 30 times that. It's all a matter of perspective.

Let me share my vision of financial independence. Imagine having no debt -- no credit card bills, no car payment, no loans, no mortgage. Imagine having reduced your regular monthly expenses to an unbelievably low level that you can very easily afford without much effort. You have a healthy nest-egg stashed away for emergencies, so a sudden car repair or injury doesn't send you into a financial panic. You live in a reasonably-sized home that is paid off and inexpensive to maintain. You receive at least some income to enjoy now from your steady habit of investing, yet you still have plenty to cover you into retirement and old age. You live well within your means, buying nothing that you can't afford to pay for at the time. And you are frugal and deliberate with all of your spending decisions, buying only what will enrich your life (and not worried about trying to keep up with the Joneses.) Finally, you don't have to work if you don't want to -- at least not full time. You have plenty of time to pursue other interests without feeling the pressure to "pay the bills." You live a life of fulfillment, with a minimum of stress.

Sound like a pipe dream? It's a heck of a lot more realistic than the idea of retiring as rich as Bill Gates! And a lot of people are shifting to this philosophy of voluntary simplicity in an attempt to escape their financial burdens. But more about that later!

Change Your Attitude About Money

The first obstacle to financial freedom is the way we view money. We, as a society, are incredibly hypocritical about our finances. We place such importance on income and material possessions that we've come to define ourselves (in many ways) by what we make and what we own. At the same time, debt has become the norm, all too commonplace and accepted -- and for some, it's even considered a badge of honor. People talk about how expensive that new car or house was with a kind of pride, as if their overspending and conspicuous consumption afforded them a special status. But when folks take steps toward simplifying, their choices often make their "peers" uncomfortable. What do you mean you're pulling little Susie out of that expensive private academy and quitting your 6-figure salary and moving a smaller house in a less-exclusive neighborhood? Don't you care about your future?

All in all, it's a very unhealthy approach. We've made progress toward overcoming the taboos of dealing openly with other addictions -- we need to do the same with our obsessions about money. The first step is to understand that money is nothing more than a means to an end. The accumulation of wealth (and "stuff") is meaningless in and of itself. Money is only valuable in terms of the non-material things it can buy you -- unfettered time, security, the freedom to really enjoy your life and the people around you. But we also need to recognize that money is not the root of all evil. It has no qualities beyond the purpose for which we use it. Only when we relieve money of its falsely elevated (or lowered) status can we see it for what it really is -- a tool.

Re-Evaluate Your Spending Priorities

So, with this fresh perspective, let's talk about how you spend your money. Look honestly at the things you own, the bills you pay, the debt you incur. Are your spending habits in alignment with your values? Here's an example of what I mean. Let's say you claim that your children are a priority. But over the years you have chosen to purchase an expensive car, two homes, a boat, and a houseful of "stuff." You eat out regularly at high-end restaurants, you take expensive vacations, and you are carrying a tremendous amount of debt. And you feel that you HAVE to work 70 or 80 hours a week, including evenings and weekends, to "pay the bills." You rarely see your kids, but at least you're giving them everything materially that their hearts desire. At first, it may seem that you are providing them with a good life, but wouldn't they benefit more from your time and attention? In hindsight, are these really the wisest spending decisions?

Achieving financial independence is all about making value-based spending decisions proactively, before you regret having gone the wrong way. It requires that you avoiding impulsive purchases, making every choice about how to invest your precious resources a conscious one. It also means moving beyond the insane need to keep up with your peers -- to own the newest, sexiest, and most expensive "toys" out there. And you really have to view money as more than cash –-- you need to see it in terms of the time and energy it takes to earn it.

Plug Your Spending Leaks

Think about all the "stuff" you buy each day without really paying attention -- snacks at work, a magazine when you stop for gas, that cup of coffee on your way in every morning. And don't forget about those expenses that exist only when you live in a state of financial disorganization -- interest on your credit card debt, late fees because you forgot to return that movie on time, overdraft charges because you didn't balance your checkbook. All of these fall into the category of "unconscious spending" -- you just do it because it's a habit. And although a dollar here or 50 cents there may seem insignificant, it can really add up. That's why I call them money leaks -- drop after drop after drop until you suddenly realize that you're out hundreds (or thousands) of dollars on meaningless spending that hasn't improved your quality of life one bit. And, unlike a plumbing main leak, you can't call up the water company and have them credit your account!

What's your vice -- eating out just because you're feeling lazy? Buying a bunch of magazine subscriptions that pile up around the house because you never have time to read them? Procrastinating on paying your bills because you don't want to have to take the time to reconcile your checkbook? If it's a drain on your finances that doesn't provide you with any tangible benefit, do your best to eliminate it. Get organized, sign up for an automatic bill-paying service, plan your time better -- do whatever is necessary to get it together. However, don't stop there. You also have to look at those "spending leaks" that give you pleasure and satisfaction -- like the morning Starbucks or daily take-out lunches. These, while momentarily enjoyable, can still get in the way of other priorities. Decide how often you can reasonably afford to indulge and still reach your other financial goals. Also look for unnecessary convenience expenses -- things that we spend money on because we are overwhelmed, too busy, or just worn out. Perhaps by re-evaluating how you use your time, you might discover that many of these expenses are just symptoms of misplaced priorities.

Spend Less Than You Earn

This sounds fairly simplistic and dangerously like common sense, but it's amazing how many of us fail to stick to this one basic principle. But we live in a culture of instant gratification -- as a society, we are nearly incapable of sacrificing in the present for a benefit in the future. For example, I have some friends who wanted to buy their first house in their early 20's. But instead of choosing a small, affordable "starter home," they built a 5-bedroom, 3-bath house with a pool, professional kitchen, jacuzzi-tub -- the sort of place our parent's generation hoped to have after gradually working their way up the housing market over a period of decades. At the time, it struck me as tremendously more house than a young couple with no kids really needed. Needless to say, even 15 years later, my friends are still deeply in debt -- their relationship is suffering because of money troubles, they've put all savings and investing on hold, and must forgo the recreational activities they used to enjoy. All because of the damned house!

The point of this tale is not to judge my friends. I just don't understand how this purchase has improved their quality of life -- in fact, it seems to be actively detracting from it. I am not suggesting that my friends don't deserve this house, I simply question whether they wouldn't have been happier if they had chosen something more immediately affordable, and put the extra cash toward toward upgrading down the road. So many other financial and personal goals have been put on hold because of a spending decision that could have been scaled back without the least bit of pain. And the really ironic part is that the pressure to go overboard often comes from an outside influence, rather than our own personal values (in this instance, there was a whole lot of trying to impress the parents to show them how well my friends were doing -- and the realtor convinced them to take on a bigger mortgage than they could afford based on the idea that their income would go up and the payment become easier over time.) When our spending decisions are not our own, we stand a very large chance of getting in over our heads. But this trap can easily be avoided if we choose to live within our current means rather than counting on future earnings to pay off our debts.