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What Is Financial Freedom?

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Financial Freedom is a term that I have heard mentioned many times in conversation and on the TV.

But what exactly is financial freedom and how do you know if you have it in your personal finances.

What is financial freedom?

Once again we have stumbled into one of those topics where there is not really a one-size-fits-all answer.

Financial freedom can mean different things to different people.

For many people financial freedom simply means to live without debt and to be able to handle any unexpected bills that comes their way without the stress of having to work out how to pay for them.

This freedom means you can enjoy life without always having to ask yourself “can we afford this?” or “will buying this mean we have to sacrifice something else?”.

For many people this is a dream situation to be in.

For other people “Financial Freedom” means they have no debt, a significant amount of money saved and a recurring income stream that allows them to live a more luxury lifestyle with fancy holidays, cars and possessions.

How to find your financial freedom?

In order to find out what financial freedom means to you it is a good idea to use your current situation as a base.

Hopefully by this point you already have a structured budget in place and are working towards a goal.

If you are currently fighting your way out of debt then financial freedom for you may be becoming debt free and saving an emergency fund large enough to cover 3 months expenses at any time.

If you are already debt free then financial freedom for you may be saving and investing enough money that it allows you to quit your well paid job to work in another area you are more passionate about that does not pay as well… It could mean retiring early.

What I am trying to say is that financial freedom is a state of mind rather than a fixed line in the sand. It is a point in your personal finance journey where you feel you can stop stressing about your situation and enjoy life more freely.

Get yourself organised as early as possible by creating a zero-based budget, then work monthly towards your goals. With time and patience you can achieve them.

Your financial freedom could be just a few years away and by adopting a more frugal lifestyle now you can reap the rewards in years to come.

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