What is Financial Freedom?
Tom Kerr writing on financial freedom…
You know the fear of an impending tax bill or an unforeseen expense like dental work or car repair. Your credit card bill probably hangs over you like a sword. And you’re most likely tied to a job to try and keep your head above water.
That’s what it means to be financially strapped.
But what does it mean to be financially free?
Writer JL Collins likens financial freedom to having F-you money that allows you walk away from a job you hate. John Robbins – who walked away from his Baskin-Robbins inheritance – says it’s about choice and self-determination.
Here are a few more visions of what it might look like…
You have enough set aside for more than just getting by. You buy what you need, when you need it, without borrowing. You pay your taxes on time, without stretching your finances. If you need help, you hire someone. You can travel, dine out with friends, or buy concert tickets. Instead of fretting over incidentals, you can focus on getting ahead and making real progress toward dreams you may have postponed for years.
You Have Enough for an Emergency
You have no fear of unexpected expenses. When a repair needs to be done, you don’t have to postpone it…and the same goes for visits to your doctor or dentist. Normally that kind of unplanned situation can set a person back for years, even decades. Most of us don’t have a reserve fund, so when even a small emergency happens it can become an insurmountable problem. But when you have healthy finances, you insulate yourself from unseen financial hits. You’ll always have a back-up fund to help you weather the storm, without needing to borrow a dime.
You Owe Nothing
One of the sweetest rewards of financial independence is to wake up each day knowing that you do not owe anyone else a cent. Debt can enslave you. But the experience of freedom from debt means no more borrowing money at high interest rates to pay for a car, and no more balances owed on your credit cards. Nobody can make demands on you by holding a debt over your head. The bank cannot threaten to take your house. If you don’t like your job or your boss, you can fire them and go start your own business.
You Support Those You Love
Those you love can depend on you for financial support whenever they need it. Whether than means sending a grandchild to college, helping your daughter put a down payment on her first home, or loaning a friend money in their time of need, you’ll have that freedom. Or you can enjoy the deep satisfaction that comes from engaging in philanthropy and charity, so that your money and your compassion ensures better lives for those in your local and global community.
You Never Check Your Credit Score
Wall Street wants you to think that it’s impossible to succeed financially without a stellar credit score, and it can be a constant battle to keep that score high enough to satisfy bankers and other lenders. But financial freedom ensures that you pay bills on time, don’t have unmanageable balances owed, and don’t have to take out costly loans. Pay down your mortgage, pay off your car, or upgrade to a newer vehicle…without ever asking permission from your bank. Your credit score will rise all by itself. But one of the interesting and ironic things about real financial freedom is that once you have it, you may never need a credit score or have any reason to check it. That’s because you won’t need lenders and credit any more. You’ll have cash.
You Choose Healthier Options
You experience less stress and high blood pressure, and you sleep better at night…which is just what the doctor ordered. You can spend a little more if need, on higher quality food, without having to break your grocery budget. You can take those vacations that regenerate your body and mind. You can breathe easier, every day of your life, and eliminate the financial worries that plague so many people and cause them so much pain and suffering. Sometimes the health benefits derived from financial security are the biggest surprise of all…and one of the best fringe benefits.
You Lead a More Intentional Life
With financial independence, you can exercise your imagination and creativity. Spend more time with those you love, doing the kinds of things you are passionate about. Go back to college. Travel. Learn a new language or skill. Buy a vacation property, a homestead, or remodel your home. Take yoga or sailing classes or learn French cooking and carpentry. Start your own winery, brewery, or cheese-making enterprise. Open a restaurant, launch an e-commerce site, or install solar panels and go off-grid. The sky’s the limit when money isn’t an obstacle. Define your dreams and goals, and then go out there and live them instead of just pondering them.
You Build Your Legacy
You have the free time to be a mentor, coach, or teacher. You plan your financial estate in order to leave behind money to fund projects that will honor your wishes and continue your legacy, even after you’re gone. That kind of flexibility and possibility is priceless.
P.S. Discover how you can enjoy a more laidback, authentic, independent way of life in The Savvy Retiree Daily. Sign up below to have it delivered – free of charge – to your email inbox.