HOW DO YOU DEFINE FINANCIAL FREEDOM?

HOW DO YOU DEFINE FINANCIAL FREEDOM?

Good morning, everyone! Today, I’m swapping blogs with John from Frugal Rules. He’s sharing his thoughts on financial independence, and you can find my guest post on learning languages frugally over on his site.

WHAT DOES FINANCIAL INDEPENDENCE MEAN TO YOU?

We live in a world that pushes the idea that happiness comes from having lots of money and possessions. This message is everywhere—from TV ads and radio commercials to our own inner voice telling us we need more to feel satisfied. It’s easy to mix up wealth with financial independence. I can’t even count how many times I’ve wished to be independently wealthy. But, based on my experience, I’ve learned that wealth and financial independence are not the same. Plenty of people spend loads of money each month without living a disciplined life. No matter how much money they have, they aren’t financially independent. True financial independence means being free from financial obligations to others.

FINANCIAL INDEPENDENCE LOOKS DIFFERENT FOR EVERYONE

What works for one person might not work for another. Sometimes, someone with less money might have more financial independence than someone with a lot of money. We all have different lives and circumstances, and we need to figure out what level of financial independence suits us best. Just because someone else wants to retire by 40 doesn’t mean you have to. Independence can look different for each of us.

BEING OBLIGATED TO OTHERS DOES NOT MEAN INDEPENDENCE

Someone living a lavish lifestyle on credit isn’t truly independent; they’re funding their life with borrowed money from credit card companies. These companies earn huge profits from the interest charged on loans given to people who can’t live within their means. True independence means being free from debts and obligations to others. It requires discipline and making conscious choices about how to live.

FINANCIAL INDEPENDENCE HELPS YOU SLEEP AT NIGHT

Financial independence is about what brings you peace of mind. For some, it’s having no debt at all, not even a mortgage. For others, it’s being okay with some debt as long as they can manage it. There’s no one-size-fits-all approach to financial independence—it’s about what helps you feel at peace. I used to have a terrible addiction to credit cards, but I’ve overcome it and will never go back. Knowing that everything my wife and I have is paid for with our own money helps me sleep at night.

WHAT DOES MY FINANCIAL INDEPENDENCE LOOK LIKE?

For me, financial independence means being free from most forms of debt, except for our mortgage. If possible, I’d get rid of the mortgage debt too. We don’t dream of retiring at 40 or being extremely wealthy, but our independence is balanced. It gives us the freedom to make choices and know we can afford them because we’ve been frugal, budgeted, and saved. Our independence allows us to look ahead and plan for the future.

WHAT DOES FINANCIAL INDEPENDENCE LOOK LIKE TO YOU? WHAT ARE YOU DOING TO GET THERE?