Updated: Mar 20, 2019
Financial freedom. The ability to live life on your own terms without financial stress.
It’s a life goal worth striving for but not a one size fits all deal. ‘Our own terms’ may not look the same as someone else’s and financial freedom means different things to different people. Here are 7 different ideas about what financial freedom could look like.
Being debt free
Imagine living without credit card, loan or even mortgage repayments. All that ‘extra’ money that you used to hand over to the bank each month can now be saved, invested or spent as you choose. It may seem like a pipedream but living debt free IS a reality for people who’ve worked to make it happen.
Like any worthwhile financial goal, pursuing a totally debt free life comes with compromise, usually a more frugal way of living. It’s a compromise those living debt free are probably pretty happy to make!
Choosing work you love or work flexibility
Financial freedom can allow you to quit a comfortable, but unfulfilling job and do work you love, even if it means taking a pay cut. Or in the case of a volunteer position, no pay at all! Maybe you do like your job but cash flow is so tight that you have to front up even when you’re sick or there’s a personal emergency.
Without money stress, you’re free to walk away from a mediocre job to do something you love every day or choose a role that is flexible enough to take time off.
Meeting all expenses, funding savings and growing investments without stress
For many, the idea of financial freedom isn’t necessarily being completely debt free or leaving the corporate cubicle to do volunteer work.
It’s breaking the cycle of living paycheck to paycheck. It’s the ability to meet all monthly expenses while building savings and investments without any stress.
No waking up in the middle of the night mentally juggling payments and due dates for various bills. No financial tension in families and relationships.
Instead, peace of mind that your money is working for you both in the short and long term.
Early (like, really early) ‘retirement’
The FIRE movement (Financial Independence / Early Retirement) has gained a solid following in recent years, especially among millennials. This swell interest has been inspired by bloggers pioneering the movement over the past decade like prolific finance writer Mr Money Moustache who ‘retired’ in his late 20’s. FIRE advocates are saving and investing furiously with the goal to retire from working 9-5 well before age 65.
That said, the movement isn’t just about retiring by 50 and never working again. It’s more about the choice of how we spend our time than money itself. Which brings us to the next point…..
Spending more time with those you love
For some, the ultimate financial freedom is the flexibility to spend more time with their families without it coming at the cost of financial instability.
This might mean cutting back hours at work or the ability to take maternity or family leave without money worries. Or, simply packing your bags to head to Bali for a week without battling with your boss to approve annual leave. What you do is not dependant on someone else saying ‘yes’ at work.
Living a location independent lifestyle
Travelling whenever and whenever you want. For digital and grey nomads, the idea of financial independence is the flexibility to move around exploring without breaking the budget. Funding travel through online businesses, retirement savings and investment income, nomads usually live light, prioritising spending on adventures over the accumulation of stuff.
Having a 12 month emergency fund saved
Maybe have a hefty emergency fund saved is your idea of financial freedom?
We never know when life is going to throw a curveball but having access to our own finances in an emergency provides a sense of security. An emergency fund to draw from in times of job loss, medical issues, etc allows you to be self-sufficient rather than relying on a loan or government payments. It can be the difference between a financial emergency and a financial catastrophe.
Do any of these ideas resonate or do you have a different take on what financial freedom look like to you?
With long term financial goals, it's important to have a plan. At Create and Protect, we take the time to understand your objectives, then carefully lay out a suitable plan that will assist you in achieving your long term goals. Enquire about our free, no-obligation consultation today at 1300 707 955 or email firstname.lastname@example.org