by Stefanina Hill

Created on: September 02, 2009   Last Updated: September 03, 2009

We've all heard the phrases "a penny saved is a penny earned" or "look after the pennies and the pounds will take care of themselves," but how many of us understand the true meaning contained in them? You can probably put your hand in your pocket and pull some pennies out right now. These small pieces of change hold the key to financial freedom when they are combined with some understanding and dedication.

Someone who is careful with the smaller units of money that they possess will naturally be dutiful with larger amounts, but this formula does not work in reverse. Some people only think in terms of large chunks of cash and whilst they can accumulate reasonably just working with lump sums, they're missing out on the full potential of their cash.

Being aware of the big picture when it comes to your finances is the key to maximizing them. If you waste money by paying over the odds, splashing out on something you can't afford or developing the attitude that any money lying around has to be spent, then you're throwing your means away.

Many people can't see the point in tightening the reins on their spending. "Life is for living" and "money isn't everything" are common maxims for those disposed to overspending. This is where the goal of financial freedom comes in. Most of us have a goal which is finance-dependent, and the desire to achieve this goal should be adequate incentive to develop careful financial habits.

What if all the dreams and goals that you don't think you can ever achieve in your lifetime were made up of individual pennies, and every time you wasted money, you were simply throwing these dreams away bit by bit? Although it's not a pleasant realization, it is real nonetheless.

Get a calculator and work out how much a small handful of change would add up to if it were wasted each day for a year. Think about how many hours you would have to work to get that amount back. Are you happy spending your life working just to cover the cost of buying lunch instead of carrying packed food or having a coffee at the station every morning because you're bored as you wait for your train? Work out how many small purchases you make that aren't really important to you, see exactly what this looseness is costing you.

Money is a commodity upon which the world turns; to a great extent, it defines what we can do with our lives. Financial freedom means that someone achieves a level of wealth which enables them to live life without the obstacle of inadequate financing.

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