What is Financial Freedom?

Happy 4th of July. This is a day where we remember Independence Day in the United States, a day associated with freedom, liberty, and independence… along with drinking, hot dogs, fireworks, and watermelon. This raises the question, what is freedom, particularly financial freedom.

The definition of freedom when I google it is, “the power or right to act, speak, or think as one wants without hindrance or restraint.” Financial freedom then is the power or right to live your life as you want with out any financial hindrance or restraint.

There is a movement in personal finance circles called FIRE. It stands for Financial Independence Retire Early. The reason I’m telling you this is because I had no idea such a movement existed even though that’s what I’ve been pursuing for a few years now. However it doesn’t have to mean the same thing to everybody.

For some people, retiring early is at 60; for others it is 35.

For some people, retiring is never working another day; for others it is working when and where you want.

Zero debt is financial freedom to some, and others won’t feel comfortable with $2 million in the bank.

Financial Independence to me…

It means that I don’t need to jump through hoops for a bank.

It means that I won’t have to depend on a full time job to meet my family’s needs.

I will be able to do and buy the things I want, including travel.

I will be spending more time with family and friends and less time at work.

It will mean the freedom to volunteer or work seasonal jobs.

I’m not there yet but getting closer. With each step, I become less financially dependent and gain a bit more freedom. What does financial freedom mean to you?

The only proven way I’ve seen to become financially independent is to consistently spend less than you earn, pay off debt, have a savings plan, and invest the difference. Happy Independence Day!

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