Defining Financial Freedom
When you think of financial freedom, what comes to mind? You might envision an influencer sailing on board their luxury yacht or a celebrity with luxury homes around the world. But financial freedom isn't necessarily about being rich. That's a misconception; you don't have to be rich to achieve it.
Financial freedom means your money works for you. You are in control of your finances. What does that mean? It means you don't feel like a prisoner of your financial situation. It means you can accomplish your financial goals. Financial freedom means you have enough financial assets to afford the kind of life you desire, both short and long-term, for yourself and your family. These assets may include savings and investments such as retirement savings, recurring streams of revenue, stocks, and other assets.
What is the life you desire?
The overwhelming majority of people want to have enough money to retire comfortably. Of course, they may retire to a cheaper area or sell their house and downsize to save even more money, but ultimately, they will be able to retire with minimal worry. Less worry may equate to more time spent with their grandchildren and family.
You may want to retire early, buy a house, or stop living paycheck to paycheck. Decide what you and your family need, and write down your goals. Then, imagine what your ideal lifestyle looks like. From there, you can work toward financial freedom.
How do you do that?
Set financial goals, create a budget, cut expenses, pay off debts, save and invest. Keep visualizing the end result and the steps you need to accomplish to get there. Picture yourself switching to a higher-paying job, paying off debts, creating an emergency fund, and investing.
Will it be easy?
No, it will take a lot of discipline and work. But one day, you will wake up and realize that you have weathered the storm. You're self-sufficient, stable, independent, and have some breathing room. You have reached your desired goals.
That's the best definition of financial freedom.