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  • Writer's pictureSusan Pattis

How To Define Financial Freedom?

Updated: Jul 19, 2021

Many people think wealth and abundance equal financial freedom. Some people confuse financial freedom with financial independence. You are financially independent if you no longer worry about paying monthly expenses and you have stable income or savings in the bank to enjoy an authentical life. For young people, as long as you do not depend on your parents to cover your expenses, you can make money to support yourself thoroughly, then you are financially independent. Financial freedom is when you have no more fear of cash flow, credit card bills, emergency funds, monetary crises, unemployment, and debt problems for the rest of your entire life. Financial independence is the relaxed state of essential life, and financial freedom is an outstanding achievement of a successful life through strategic savings and wise investments.


Reaching financial freedom is a beautiful process and fantastic life experience through good planning and careful execution. Financial freedom does not happen by chance; you must work on it with your full attention, commitment, and dedication. Many people count on God for financial freedom and end up hating God for not delivering the result. There are also people waiting for miracles and end up hopeless. Some people achieve financial freedom at a young age (usually through family heritage). However, most people will reach their financial freedom in their 40’s or 50’s through savings, adjusting lifestyles, avoiding over-spending, and remaining debt-free. Most financially free people are creative, willing to try all possibilities, do not follow fashion or luxury trends, keep close ties with friends and family, and aim at spiritual wellbeing.


Financial freedom has different meanings to different people. “I have reached financial freedom because I can buy anything I like and do anything I wish without worrying about being overdrawn," a retired dentist claimed. "I have lived a comfortable life while still having cash to help my church and community; that is my financial freedom," a college professor said. "Financial freedom for me is that I don't have to work anymore because my stockbroker makes more money for me than I can consume in the rest of my life," my lovely neighbor told me. "My financial freedom is out of my control, but I have faith that the universe will give me the best results at the right time with perfect style," my dear soul sister stated with confidence. So, you see, everyone has their definition of financial freedom.


Financial freedom is about having good habits or discipline to save every day without careless spending, finding a balance between material wealth and mental security, creating a lifestyle within a reasonable budget, and making intelligent efforts to achieve a sustainable income. Financial freedom means not feeling guilty when you dine in a fancy restaurant, drive a luxury car, carry a Hermes handbag, live in a beach house with an ocean view, and have no concerns over inflation. Financial freedom is when you stop chasing money or investment and focus on the meaning of life and searching for answers about the universe and yourself. A financially free person never worries about medical bills or unexpected expenses because financial freedom enables you to support yourself in any situation and help friends and family with their urgent needs.


Financial freedom means you have extra income beyond your expenses. You need to calculate your total monthly costs, then secure an income that exceeds those basic expenses. In other words, financial freedom requires having more savings or assets beyond your liabilities or expenses. Of course, you are not financially free when you live a life based on a monthly paycheck, a tedious job, a poor living condition, and a deficit in your bank account. However, after achieving financial freedom, if you can quit a stressful job with courage, have time and money to entertain yourself, have a choice of what to do, where to work, how to get the job done, and the ways to spend your time and money without sacrificing personal freedom.

Financial freedom gives you the power to be your authentic self without compromising on your principles, lifestyle, faith, and life goals. It is crucial to generate enough income to cover your expenses and save extra money even if you are not working in a full-time job or business. You can manage your monthly bills of water, electricity, gas, WIFI, telephone, mobile, cable, car, apartment, etc., and other out-of-pocket expenses, reduce your debts or liabilities and generate residual income. You can manage your income and savings to plan vacation trips without worrying about money.


You are not financially free if you are suffering from financial stress and anxiety constantly without having a solution. You begin to reach financial freedom when you have sufficient savings and assets to generate dividends, interest, and a return on your investment with proper financial coaching from an expert. When you are worry-free from time and money, you are in a financial freedom because you no longer have to trade your time and effort for income. Financial freedom is when you can live your life by your own choices and terms without selling your dignity or interest; you can choose any hobby or activity and enjoy your life.


Yes, financial freedom gives you the confidence to know you have money saved, the pride of not needing to worry about money, and the comfort of peace of mind for the rest of your life. On the other side of the equation, financial freedom could push into more choices, more social status, more opportunities, and more resources. However, a non-stop burning desire to have more can be a dead-end because having more does not always result in financial freedom. Having just the right amount of financial freedom means having enough money to cover expenses and to have saved enough to maintain a healthy and happy life without the worry about money. Still, more and better financial freedom means a solid drive to make more, spend more, work more, hire more, and enjoy less with more responsibilities and liabilities, a potential path to a rich-slave lifestyle.


It isn't easy to achieve true financial freedom in today's commercialized world because everything tangible and intangible has a price attached. Financial freedom lets you have the ability to buy and do whatever you wish without concern about money, but it also tests your discipline and self-control to not chase more or to over-spend. Therefore, it is essential to maintain the good habit of saving and avoiding over-spending after reaching your financial freedom. Unfortunately, in America, most people spend more than they make which is why very few people there have achieved financial freedom.


Financial freedom is not about rich or poor; it is about peace of mind or healing energy that reduces your economic tension and money problems. It is about your awareness of how much you make and how much you save; it is a simple as that. Financial freedom gives you time for relaxation, for learning, to grow internally, to love, and time to stay healthy because you have sufficient income streams for your lifetime. So, remember, do not spend more than you can generate; you will reach financial freedom sooner or later while enjoying valuable time with your loved ones and doing the things you like the most.

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