On Saturday, my friend Tyler hosted a blog meetup.

I first met Tyler several years ago. He was a GRS reader who dropped me a line to see if I’d meet him for dinner. I said “yes” — as I almost always do. Now, several years later, Tyler runs a successful blog of his own. It was fun to see his readers come out to support him.

After giving us a chance to chat, Tyler asked us to break into small groups, to work together to define the word freedom. “What does freedom mean to you?” he asked.

What is Freedom?
I was sitting with Tammy and Logan (they of the tiny house) and with our friend Michelle, who also lives in a tiny house. We brainstormed ideas. One obvious answer was that, in many ways, money equals freedom. When you have money, you have more options. Or, more precisely, when you have no debt, when you spend less than you earn, then you have more options.

But freedom is more than money, of course.

“To me, freedom means being able to what you want, when you want,” I said. We talked about that for a bit. We talked again about how money makes this more likely.

“But I think to be free,” said Michelle, “you have to somehow be aware of what your options are. You have to be conscious that you’re making choices that reflect your values, choices that allow you to do what you want, when you want.”

“Fair enough,” I said.

After more discussion, we realized that each person at our table already felt very, very free. None of us worries about money: I’ve experienced a windfall; Tammy and Logan and Michelle have intentionally minimized their expenses so that money is no longer a stressor. We each do work we’re passionate about. We have good friends, we have purpose. We’ve adopted lifestyles that give us freedom, or at least a sense of it.

“I think a lot of feeling free comes down to shifting priorities,” Tammy said. “It means choosing to relate to money, and other parts of life, in ways that others don’t.” Tammy wasn’t saying that she thinks we’re better than anyone else — far from it! — but that in order to obtain this feeling of freedom, we’ve each made choices that we like but others might not. Such as living in small spaces. (If I’m doing my math right, the four of us live in three separate spaces that combine to total 985 square feet. My apartment is the bulk of that.)

Conquering Fear
Tyler took some more time to speak with his readers. He talked about his own ideas of freedom. “The core of freedom is conquering fear,” Tyler said. “It can be scary. We want to draw cartoons, or climb mountains, or do whatever makes us happy. But often, people are afraid of freedom because with freedom comes risk. When you choose freedom, you make choices for yourself. Nobody else makes them for you. And when you make choices for yourself, the responsibility — or the blame — for the outcome rests with you.”

At our table, we talked about the relationship between freedom and power.

“In some ways, freedom and power are interchangeable,” Logan said. “When you have freedom, you have power. Not like you have authority or control over other people, but you have power over your own life.”

“Here’s a thought,” I said. “If you’re lucky enough to be free, do you have an obligation to help others who aren’t free? To give them this power too? And there really is an obligation, then doesn’t that mean you’re not actually free?”

“It’s like a paradox!” Tammy said.

The Limits of Self-Determination
But here’s the rub: Even if you’re free, even if you have power over your own life, bad things happen. You might get struck by a car. You might have a stroke. Your country might experience hyperinflation. You’re only free to the extent that you can control life. And beyond a certain point, life is out of your hands. (Though, again, the more money you have, the less impact these events have on you. Another argument for a fat emergency fund!)

What’s more, as free as you might be, you only have that freedom because your environment allows you to have it. If you lived elsewhere, or elsewhen, you might not be able to do what you want to do, when you want to do it. You might not have the freedom you do now.

Because of this, and because I’m fortunate to be very free myself, I’m finally starting to think of other people. I feel called to help others move closer to this ideal, to give them find the power to do what they want, when they want.

Money and Freedom
Money can’t buy happiness, it can’t buy love, and it can’t buy freedom either. But money does make obtaining these goals much, much easier. When you have money, you don’t have to worry about the basics. To re-visit Psychology 101, money helps you build the base of Maslow’s hierarchy of needs.

When you have money, you’re able to take care of your physiological needs, like finding food and water. You’re also able to better take care of your body and your belongings, able to afford a safe place to sleep. Because money makes it easier to have these things, it further grants you the freedom to focus on higher parts of the hierarchy, such as self-esteem, confidence, and achievement. If you worried each day about how you were going to feed yourself and your family, you wouldn’t have time to pursue these higher aims. You wouldn’t have the freedom to do so.

But here’s the thing: I don’t think money does buy freedom if the person with the money becomes obsessed with protecting it or with obtaining more. Money is a tool. It’s useful only insofar as it helps you achieve your goals.

An old friend contacted me by Facebook the other day. We’re going to get together for coffee soon. (Where “coffee” is a euphemism for “any other drink because J.D. doesn’t like coffee”.) During our conversation, my friend asked, “So what do you do now that you sold your web site? Do you not work? Do you just go to the gym and travel the world?”

Ha. I wish. I feel like I’m busier than I’ve ever been. But to tell the truth, I’m busy in a different way. In the past, I was busy, but I was busy doing things that other people wanted. Now, I do things that I want. Most of the time, even my work feels like play.

I’m a happy man. I have a good life. I’m able to do what I want, when I want. This isn’t because I’ve bought my freedom and my happiness, but there’s no question that having savings, eliminating debt, and living below my means has given me peace of mind, has allowed me to take risks that I might have otherwise avoided.

This guest post from Aloysa is part of the “reader stories” feature at Get Rich Slowly. Some stories contain general advice; others are examples of how a GRS reader achieved financial success or failure. These stories feature folks from all levels of financial maturity and with all sorts of incomes. You can read more from Aloysa at My Broken Coin.

For six years, I lied to my ex-husband about how much money I was making. Some people make up lies trying to build self-esteem. Those people lie “up”. I lied down, hiding how much money I made, and underestimating the work I was doing.

I didn’t do this for some malevolent purpose. In fact, I thought I was doing my ex-husband a favor. I tried to protect his ego and his self-worth. Unfortunately, as we all know no good deed goes unpunished.

Background
I was born far away from the United States. When I met my ex-husband, my homeland was going through some turbulent times. The Soviet Union was in ruins: The job market was unstable, food was expensive and in scarce supply. Our government was changing the national currency on what seemed to be a weekly basis. Stability and financial security were ideas long forgotten.

When we got married, my ex-husband was serving in the military, making good money. By the time I graduated from college, our country had transformed from a socialist state into a free-market, exploring and building capitalism.

It was then that the tables suddenly turned: My ex-husband left the military and ended up laying cement for a private construction firm. As a college graduate, I got an entry-level position with a small firm in the automobile industry. A year later, that small firm grew into one of the biggest wholesale trading firms in the country, propelling my career.

Then the marriage trouble started.

Protecting His Ego
My ex-husband was sincerely happy when I got my first huge promotion and my first salary increase. That first increase put my salary way above his. He seemed excited about more money flowing into the family. That didn’t last long.

First, he started to make snippy comments about my job during conversations with our friends and family. Later, I noticed that every time people asked me what I was doing for a living, he dismissively waved his hands and said something non-essential, trying to undermine my achievements.

I started to suspect that maybe his ego was hurt. Maybe the fact that I was becoming a successful career woman who was working more hours, and ultimately bringing more money home, was somehow diminishing his self-wroth. Maybe he felt that his role as a “breadwinner” was being taken from him.

I thought about it, I dwelled on it, and finally determined that it was all my fault. I decided that I was not going to disgrace my ex-husband’s sense of self-respect by announcing that I made a bonus that would allow us to renovate our small apartment.

It was the beginning of our end.

Easy Come, Easy Go
We were always supporting our relatives from both sides as much as we could. But when I started making more money, I was pressed to help the family of my ex-sister-in-law more than usual. The more I worked, the more I made, the more money was leaving our family and going into her household. Every bonus, every salary increase was viewed by my ex-husband as an additional source of support for his sister.

She was a stay-at-home mom with a stay-at-home alcoholic husband. Both seemed to conveniently live off our (well, my) money. I didn’t mind helping them, but constantly supporting them with every extra penny that we could made me feel that we were encouraging and sustaining her husband’s alcoholism.

Another major concern surfaced about the same time. Between our own expenses and helping their family, we weren’t able to save anything for ourselves. It didn’t matter how much both of us were bringing home. It was all gone by the end of the month. We had no savings, no emergency money, none of the financial security that both of us wanted.

How It All Unraveled
Over the years, I began to keep secret most of my pay increases and bonuses. I stashed away money, and I hid my purchases.

Did I feel guilty? Of course I did. But over time, you get used to lying, and it becomes your second identity. You live a life of lies, and you think that this is the way to live it.

It’s one of the things lies do to you. Everything you lie about works to replace moments, words, events from your life, until you cannot remember why any of it mattered. It takes so much energy to hold on to the lies that you lose your grip on what’s important.

And every lie is a relationship killer. Even a small lie, because eventually that small lie will become a big one.

Lies make you feel empty — and afterward, lonely too.

Why I Would Never Do It Again
You could say that I was young and naïve. I thought I could save a marriage built on lies. I call myself foolish. Foolishness is always best seen in retrospect.

Joint goals make a strong foundation to marriage, along with trust and understanding. Years later, after the divorce, I look back at our marriage and I have to admit that we didn’t have any common goals. We didn’t know where we wanted to go together, what we wanted to build.

Sometimes you have to accept that a notion of a “traditional relationship” is a fluid one. Roles can be reversed any time. Life can change on a dime. It shouldn’t matter who makes more money in the relationship. What should matter is having similar attitudes towards money.

No one should ever equate money to power in marriage. Marriage is a partnership, not a rivalry. If you can’t be happy for your partner’s success, then maybe it’s time to reconsider your relationship.

Fridays are typically “Ask the Readers” days at Get Rich Slowly, but today I’m doing something a little different. I’ve made a couple of big revelations lately, and those have generated a lot of questions. Today, I’ll answer a handful of these questions in order to give an outline of how I’m managing my money.

There’s a lot to be said about the discipline it took to be conscious spender (and saver) even after a windfall. How did you do this?

In a way, conscious spending became easier after the sale of Get Rich Slowly. But it also became more difficult. Let me explain.

When I sold GRS, Kris and I paid off our mortgage. This freed $1000 per month that I could use for whatever I wanted. (That $1000 was my half of the mortgage payment.) My spending on the Needs part of the Balanced Money Formula essentially dropped to zero, leaving me lots of room for Wants and Saving.

Plus, because I followed my own advice about spending a small portion of a windfall on things you really want, I didn’t feel deprived.

That said, it’s easy to become complacent when you have a large nest egg. It’s easy to start spending a little more here and a little more there because you know you have plenty of savings to bail yourself out. Though I never came close to spending more than I was earning, I did begin spending more than I ought to have. That’s why I started preaching the virtues of conscious spending; I needed to remind myself of the concept.

Lately, I’ve become more of a conscious spender. That’s because I don’t allow myself to touch the money from the windfall. Instead, my goal is to live on my current income, which is a little lower than it had been when I was working at the box factory.

I haven’t totaled the numbers for 2011, but leaving aside money related to the sale of the blog, I probably earned about…calculating…$48,000 from all sources, including speaking, magazine articles, book royalties, interest income, and writing for this blog. That’s roughly the median income for an American worker household (albeit I have an enormous nest egg).

Now that I’ve moved out of the house and am renting an apartment, my expenses have increased substantially. Remember that $1000 I freed by paying off the mortgage? Well, I’m now paying that again in rent and utilities. Meanwhile, I still have the other expenses I was carrying before, including gym fees, soccer tickets, and Spanish classes. Unless I find some way to boost my income — and I aim to do so — I’ll have to cut back hard on some things. Most likely travel.

If you had such a major windfall, why did you still feel compelled to give up comic books?

I felt like I was collecting comics out of compulsion. I don’t read everything I buy. I want to, but I don’t. So why buy more? Besides, I haven’t given them up completely; I’ve just reduced my comic spending radically. (As in $0 so far in 2012, though that’ll change soon.)

Also, as I’ve mentioned, I don’t want to touch the nest egg. If I’m going to buy comics, I have to do so within the constraints of my current income. Again, this is the notion of conscious spending that I write about all the time. I would much, much rather spend that comic money on Spanish lessons right now. I love learning Spanish much more than I enjoy reading comics. That may change in the future (and probably will), but for now, the Spanish is a priority, and that’s my focus.

What’s your asset allocation?

I covered this in detail last April when I wrote about rebalancing my investment portfolio. You can see my target asset allocation there. But my current asset allocation looks nothing like that. Because of market movement, and because Kris is receiving some of these funds as part of the divorce settlement, my asset allocation is a mess. It’s very heavily weighted toward broad market index funds (which is a good thing, I suppose) with very little in bonds. If the market were to crash today, I’d be hurting.

One of the challenges I now face is balancing things without incurring tax liability. If I sell stocks to buy bonds, for instance, I’ll owe long-term capital gains tax (15%) on any profits. This is why I have an investment advisor I meet with regularly. He can hold my hand as I try to navigate this. And it’s definitely something I’ll be looking at once tax season is over.

You’ve often talked how you’d like to move into your “dream” apartment and start over, so I’m wondering if you’re now following that wish at your new place? How are you doing with your war on Stuff?

I was wondering how long it’d be until somebody asked this. This is one of those chances for me to practice what I preach. How am I doing? I’d give myself a B-.

In some ways, I’ve done an amazing job of shedding layers and layers of unnecessary Stuff. It’s all sitting in the workshop at the house, waiting to be sold. (Yay! Extra income I can use to save for travel!) That said, I still moved a lot of things.

My closet is full of clothes. Not as many clothes as I used to own (all of these actually get worn), but still too many. I feel like I could benefit by intentionally pruning one quarter of my wardrobe. It’d hurt, but wouldn’t make me feel deprived.

I also own a hell of a lot of computers and gadgets. No man needs this much electronic eqipment! Plus, I keep tonds of paper. I need to get over that obsession.

My biggest battle, though, is against the books. (Surprised?) In the house, I had many many bookshelves devoted to books and comics. Here in the apartment, I have less space, so I have fewer books. But I still have a lot. Plus, there are still more to bring over. Every time I go see Kris (as I will tonight), I bring back at least one box of books (and sometimes several). Again, it might profit me to intentionally purge one quarter of my books.

After your trip to Africa, you talked about how you felt like it was your responsibility to do something to help, to contribute. Afterwards, you and Kris got a ton of school supplies but then decided not to mail them because it was too expensive. Have you changed your mind on that? Are you at least donating some of your money to some groups or charities that could benefit now that you’ve sold your site?

Over the years, the one financial choice that I’ve made that’s brought the most heat from readers is my decision not to contribute to charity. I’ve just never found a cause I want to support. That’s no longer true. Recently, I have discovered a couple of causes I’m passionate about supporting. But I’m going to start by contributing my time, not my money.

Since the start of the year, I’ve been contributing five hours a week to volunteer work. (This morning, for instance, I’ll spend two hours in a second-grade classroom helping kids learn to read and write Spanish.) Plus, I’ve been meeting with representatives from non-profits and charities. Part of this is related to actual work, but part of it is because I’m trying to find causes I believe in.

The causes I’m drawn to are all related to education (both adult and childhood), financial literacy, and immigration. And it looks like I may have found a way to combine all three! At the end of March, I plan to teach a personal finance class (in Spanish) to a group of 35 latina women. If that’s successful, I’ll try to build upon it.

So, I haven’t made any charitable donations…yet. But I’ve begun to contribute my time.

When you started GRS, did you imagine that it might end up making you a lot of money, and ultimately making you financially independent? Do you just think you got lucky, or could someone set up a blog today and emulate your success?

When I started Get Rich Slowly, I had no idea what it would become, financially or otherwise. I’ve always said that my goals were (in this order): to help me get out of debt, to help others get out of debt, and to make a little money in the process. That I’ve been able to exceed all of these goals amazes me.

Did I get lucky? Yes, of course. But luck isn’t the only element involved. I worked very hard to produce quality content. And I stuck with it day after day for years. Some folks don’t appreciate just how difficult this is. At the peak, I was working 80 hours a week on the blog. But as I’ve said in the past, hard work isn’t enough. In order to do what I’ve done, you also need some luck. In my case, I was lucky enough to catch the attention of some influential readers early on. They shared the blog with their friends, and it spread from there.

Could someone achieve the same success with a new blog today? Of course! And there are those who do. But I’m not sure what the right recipe for replicating this success is. There’s so much involved with it, and some of it seems difficult to define. I’ve started many other blogs, but none has caught on like GRS.

The Bottom Line
I make an average income. Because of some big life changes, at the moment I spend less than I earn — but not by much. Until I can find ways to make more money, my travel budget is going to suffer.

That said, I have a great job that gives me lots of flexibility to spend my time and money on the things I love. I also have a fat emergency fund. And, of course, I have a huge retirement nest egg. My aims for the coming months are both to increase my income and to continue exploring charity and volunteer work. In the meantime, I’ll share my progress with the readers of Get Rich Slowly.

This post is from staff writer Sarah Gilbert.

For the past two years doing taxes has not been bearable: it’s been terrific! I’ve used an online e-filing service for several years now after many years of taking great pleasure — really! — in filling out the paper forms, just because it gets the money to me far more quickly.

Last January I began to fill out the online forms and, at some point, started glancing at the little status bar on the upper right corner. I’d filled in all my dependents and household income, and the number corresponding to my refund was more than double what I thought I might be able to expect. It ended up more than triple my expectations — about $7,500. It is, I’ve now learned, one of the significant benefits of having a spouse whose income is coming from a war zone, where it’s not taxable. As my own freelance income had decreased, thanks to the extra work of holding down the house and three young children on my own, we were getting an earned income tax credit on top of the child tax credits for our boys.

This year, I’ll get a tad bit less. I made a lot in 2011, but I’m not complaining a bit. I am, instead, working hard not to spend it unwisely by trying to follow the following rules:

1. Don’t spend a single penny before the money arrives in your bank account.
Don’t charge something on credit cards; don’t promise to spend the money; don’t put a deposit down with the rest due the day you expect the refund. Naturally, this one is very difficult in practice. This year, I had a fantastic deal on wool comforters made by a nice family on the outskirts of the city; lots off retail, with a third down in December and the rest due at the end of January. Surely my tax refund would arrive by then! And I really did need new comforters — the feathers coming out of my old one were so thick it looks like some geese are about to lay eggs under the bed. Everything worked out, but I had to juggle, and I felt a little awful using the comforter a few days before I expected the refund to arrive. I’d paid for it, but I’d have to make it up later.

You won’t know what unexpected expense or nasty delay might cause you to be staring down a final payment or contract fulfillment without anything left in your bank account but hope. And then, you could end up using costly credit or financial shenanigans to make good on your promise.

2. Pick a debt that can reasonably be paid off with the tax refund. And do it!
Also, try negotiating the balance due. I’m still, faithfully but slowly, paying off long-ago-closed credit card accounts. Number two was 76% paid as of January 30. I called the day the money hit my account to negotiate a big payment that will satisfy the whole account — and I’m saving $1,000 off the original balance. (I could probably have worked it down further; my negotiation skills are great, until I wear out and let them “win.” You could try harder!) Now I’m planning to spend March working out a payment plan for credit card number three — the last.

3. Put at least a third in a savings account, right away.
Consider it “someone else’s money.” (Your future needy self, of course!) If I leave the money in my regular checking account, I’ll consider it fair game. And it’s the perfect seed for the emergency fund you’ve been wanting to start. It’s important that I separate the concepts of “savings” from “checking account buffer”; I’m far less likely to preserve the buffer, so I have to get it into a separate account. Preferably one that’s harder to withdraw from. So I’m planning to get half of that savings into a Roth IRA. It’s not a ton of money, but it’s better than letting it sit where I can access it for emergencies that… aren’t really.

4. Commit to yourself to buy things that will pay you back in savings.
Note I am not including “wardrobe investments” in this (unless perhaps we’re talking about a wardrobe completely devoid of work boots, or something). I consider things such as upgraded windows (to save you energy costs), a couple of bus passes or other bulk purchase of something you use very frequently (to save you stress, having to make change, and get a bulk discount). Maybe a bike could replace a short commute, or a second car. (My stimulus check in 2008 went to a fancy mama bike that’s saved me so many thousands of dollars I’ve stopped tracking.) Maybe you can buy a half of a cow from a local farmer, saving you tons all year on quality meat — or maybe a chest freezer to make that possible. This concept is served by my wool comforters; they’re so freakishly warm that I’ll be able to turn the furnace down several degrees at night.

5. Spend 5% or so on something nice.
I know, the “windfall” rules say to only spend 1% on splurges. But let’s go crazy! It’s just a tax refund, after all. Go out to eat with your family (once). Buy yourself a pretty raincoat or some new wool underwear (my favorite splurge). Just make sure you feel good about yourself and you stick to the 5%. Which leads me to the most important thing of all…

6. Make your budget before you do anything.
Well, it’s okay to stick that 1/3 in the savings account first. But don’t rush off and spend your splurge and your “investments” before you’ve sat down with a piece of paper or a spreadsheet and all your bills for the month. Go on: put in one column all your regular income and the tax return. Put in the other column all the regular bills (put those first!) and what you’ve hoped to spend your tax refund on. Let’s not put off paying your home equity loan or your power bill because you have so much money, right? Make sure you’ve paid your bills first. I went so far as to forcing myself to record all the money I’d spent, down to the last bus ticket and coffee shop tip, over the month of January before I’d let myself spend any money on treats.

It’s really effective (if you can hold yourself back) to let the debt payments and bill payments clear your bank account before you buy anything fun (even if that “fun” thing is a wool comforter or organic underwear for your kids: one thing on my list!).

7. Don’t let yourself go shopping.
I rarely go shopping, because I rarely have much spare cash. Except for when I have spare cash! Then I love to shop. I shouldn’t. Even when I’m not going crazy with the designer clothes and $300 boots, I’m going crazy with designer insulated coffee bottles. I can’t help myself.

So I’ve found the best thing to do is to make a list of all that stuff I’ve been wanting — “needing” —for the past year, and prioritize. I’ve been waiting for those organic underwear the longest, and my nine-year-old has been complaining his old ones don’t fit. So I need to buy that and not (for now) that cute pair of rain boots I’ve been longing for (but totally not needing). The wireless modem is about to fail, so we’ll get that — but not the new iPod touch to replace the one with the marred screen. It still works and, after I made my list, I learned that it would cut into my savings funds. That’s non-negotiable.

Make your list, do the math, then go shopping.

8. Think about investments in a new way.
Last year I spent part of my tax refund on tickets to two conferences, thinking that they’d be good for my “professional development.” The first, a culinary professional conference (I write about food), turned out to be a bust — it was really fun, but I didn’t meet anyone I couldn’t have met online, and it was terrifically expensive. It’s more of a moneymaker for the conference organizers than for the attendees. The second, a blogging conference, turned out to be amazing; I met a couple of people just by chance with whom I went on to do consulting projects and other writing gigs. I made twice as much in income from people I never would have met otherwise as I spent on the conference. And I made some friends I love dearly.

So I’m being more strategic about conferences this year, and focusing on the ones where I am comfortable my “career” is already established and will give me the opportunity to strengthen relationships with people I really care about. I’m heading to a writing conference a lot of my favorite literary editors will attend; I’ve discovered that connections (when they’re authentic friendships) in literary journals and book publishing are far more important than in food writing. And the ideas I get from literary events turn into even more “output.” I’ll also repeat my visit to the blogging conference, ever more alert to the opportunities to share ideas and meet people with whom I can collaborate — and hopefully turn into more income, in addition to friendships. A happy person is both a better money maker and a person who needs less money, right?

The best part is that I can count all these expenses against my income on next year’s taxes! No time like the present to start planning for next year.