What Is “Financial Freedom?”

What is financial freedom?

It’s much more than finding ways to save money. The phrase means different things to different people, but it always includes two aspects: having no debt and having wiggle room to live life in the way you desire.

Having no debt

When you have debt, you are a slave to the person to whom you owe money. Yes, including the car dealership and mortgage lender. Why? Because should something happen that you were no longer able to make payments, you could lose the item. If it’s not paid off- if you still have debt on the thing – it’s not really yours.

So when you get completely out of debt, you become truly your own man or woman.

Then, you can begin using the money you have been paying against the debt to build wealth. You can save up for a vacation home. You can save up a nest egg so that you can feel comfortable quitting your job and pursuing your dream career as a writer or actor or landscape artist.

You can invest the extra money and move from financial freedom to financial independence, the state where you have enough money so that working for an income becomes a choice, not an obligation.

Wiggle room

With financial freedom comes a lot more wiggle room. Your options suddenly become many and diverse. You can give more to your favorite charity, and/or give to more charities. You can quit a job you hate and look for something else.

You can bring more surprises to your kids at Christmas, buy healthier foods and upgrade your car.

You can begin to choose the lifestyle you want. You finally have enough extra money that you can invest in that small business idea you’ve been toying around with for the past several years. You can create a plan to be a millionaire in the next so many years.

And know that it is perfectly within the realm of reality to do so.

When something breaks, you have the means to fix it – plus some surplus beyond whatever expenses are incurred.

What does financial freedom look like for you?

You will be more motivated to work toward this goal if you write down what your life would look like with no financial worries. Make a list of at least twenty things you can get excited about. My list includes Jerry and I being able to work as much or as little as we want, spending lots of quality time with our son, and giving more generously to charities.