Building systems for sustainable financial growth

In Part 1, I showed you how bringing all your finances into the light creates the foundation for real change. In Part 2, we explored the freedom calculation mindset that transforms every spending decision into a choice about your future options.

But here's where it became interesting and when new question popped up: how do you actually know if you're growing?

Once you implement freedom-based decision making, you can see where your money went. You can even easily tell which purchases aligned with your freedom pillars. I certainly could. But I had no clue whether I was actually growing my overall freedom or just telling myself better stories about the same old spending patterns.

Engineering the feedback loop

What most financial tracking tools measure are technical things. Income, expenses, net worth - these are indicators that objectively tell you where you stand. Unfortunately, they don't tell you whether your choices are actually expanding your capacity to choose.

Naturally, a new experiment was on the horizon in my little lab: labelling every expense based on its impact on my freedom rather than just its category.

The “six pack”

Once again, I started with reformulating the question, from "What did I spend money on?" I shifted to "What did this purchase do to my future options?" 

Every expense now gets one of six labels:

Freedom expanding - Skill building courses, gear or tech that enables independence and creativity, anything that supports my growth.

Freedom contracting - High-interest debt-payments, impulse shopping that leads to clutter or regret, unnecessary subscriptions, anything that basically has no value or my respect for that matter.

Foundational needs - Non-negotiable expenses that keep the system running. Rent, utilities, basic groceries, basic clothing. Boring but essential.

Sustainable comfort - Purchases that I can afford without creating lifestyle inflation. Anything around my dog falls into this, although it’s sometimes arguable whether that creates lifestyle inflation or not. 

Conscious treats - Experiences that recharge, joyful but discretionary expense. This week, it was a hair colour treatment at the hair saloon, which is not something I usually do.

Friction costs - Money spent solving problems created by poor systems or avoiding necessary decisions. Eating out of convenience, basically all the bank fees go here as well, duplicate purchases.

What the data reveals

My friction and freedom contracting costs were higher than I expected - nearly 20% of monthly spending. That's money disappearing because I either haven't built proper systems or because of my poor habits, not because I'm making conscious choices. 

More surprising: several purchases I'd been justifying as "foundational needs" were actually "sustainable comfort" or even "freedom contracting" would be a more appropriate label. My grocery spending, for example, includes a bit too much sweets that are definitely contracting my freedom in terms of health.

What's really useful in all this is that I can see which direction my spending is trending. Are my freedom-expanding purchases increasing relative to friction costs? Are my conscious treats staying conscious, or are they becoming unconscious and unhealthy habits?

I’m not trying to judge my expenses as good or bad. I’m trying to understand what each purchase actually does to my future options.

Unexpected insight

The most valuable insight hasn't been about the money at all. Surprise, surprise! It's been about the decision-making process.

When I have to label each purchase, I'm forced to be honest about my motivations. That "foundational need" for a new kitchen gadget becomes obviously a "conscious treat" when I have to categorize it. The subscription I'm keeping "just in case" reveals itself as a "friction cost" the moment I apply the label.

Beauty in this label system is that it’s subjective and very individual. Eating out at the restaurant can be either a conscious treat or friction costs and neither of them is good or bad, correct or wrong, it simply is what it is at that moment.

The labelling system creates a pause between wanting something and buying it – call it an awareness pause. What am I actually purchasing here? Capability? Comfort? Convenience? Or am I just avoiding a decision I need to make?

Your growth foundation

I'm not suggesting you adopt my exact labels. What works for my freedom pillars might not align with yours. But I am suggesting you need some way to measure whether your financial decisions are actually moving you toward the freedom you defined for yourself.

The freedom calculation from Part 2 gave you a framework for making individual decisions. This measurement system gives you a way to track whether those decisions are actually moving you in the direction you intended.

Your specific action for this week: come up with your own “six pack” label system that reflects your own vision of freedom. Together, they create the feedback loop that turns good intentions into sustainable progress. You might discover, like I did, that you're spending significant money on things that don't advance any of your actual priorities. Or that your "necessary" expenses include a lot of convenience purchases masquerading as needs.

The point isn't to eliminate certain types of spending. What we do here is shifting toward conscious choices about the trade-offs you're making.

We've now completed our journey through simplification, mindset shifts, and a system for sustainable growth. The foundation is built. The real experimenting starts from here.

Simplify. Shift. Grow.