7 Financial Decisions That Limit Your Freedom ...

Getting into massive credit card debt can limit your freedom. If you owe thousands of dollars in credit card debt, you probably have high minimum payments. And since you have to pay back balances, credit card debt can keep you at a job you hate. If you didn't have this debt or high payments, you'd have more options, such as leaving a higher paying job and moving into a field that provided real career satisfaction.

I know people who feel stuck at a job, but can't leave because they're living the so-called American dream. They have a big beautiful home, expensive furniture -- and unfortunately, they need to earn a certain amount to keep up this lifestyle. You're free to buy any house you can afford. But if you want choices in life, sometimes it's better to live a simple life. The less expenses you have, the easier it is to work less.

My husband and I have a rule that we'll only have one car payment at a time – if possible. It's not because we can't afford another car payment, but because we choose to live simple and keep a cash cushion. This strategy has helped increase our savings account, and it gives both of us the opportunity to work for ourselves, enjoy vacations and have peace of mind.

I have many examples of people who've felt stuck because of poor financial decisions. One thing I've observed is that impulse shopping can significantly limit our freedom. Years ago I worked with a lady who wanted to be a stay-at-home mother. She was fortunate in that her husband earned enough to cover expenses. But she was unable to stay home because she had a spending problem she couldn't control.

Even if you only contribute $50 a month to a retirement account, a small contribution is better than nothing. Unfortunately, some people don't get serious about retirement planning until they're in their late 30s or 40s. Because of the late start, they're unable to save enough to maintain their lifestyle when they're ready to retire. When they retire, they might seek part time work to make ends meet, which can limit the freedom they envisioned for themselves.

Even worse, some people don't plan for retirement at all. These individuals either rely on others to take care of them, or they feel Social Security will provide all the income they need. Some people are sadly mistaken and end up working longer than anticipated.

I'm in no position to tell anyone how to manage their household, but a one-income household can limit your freedom. As a single person or the sole breadwinner, you might feel stuck at a job because it provides income necessary to take care of yourselves or family. However, if you're unhappy and want to explore other opportunities, a second income in the home can make this happen. You might be able to take a job earning less, or temporarily reduce the hours you work to go back to school.

If you want options, it's important to make smart financial decisions. You never know what you'll want for yourself in the future. If you make wise decisions with your money today, it'll be easier to follow your passions in the future. What other financial decisions limit our freedom?