Defining Financial Freedom: What Does It Mean to You?

There's been so much talk lately about financial freedom.  But what exactly does financial freedom mean?  And is it the same for everyone?  Well, if you ask me, no.

What one person considers financial freedom, another may not.  Its definition will differ from person to person and will depend on the person's lifestyle and what stage they are at in life.

So ... what does financial freedom mean to you?  If you don't know yet, you've come to the right place.  We'll go over the definition of financial freedom, the different kinds of financial freedom, and I'll also throw in a few financial freedom quotes to keep you inspired.

Let's jump in!

Defining Financial Freedom

A simple definition from theFREEdictionary.com states that financial freedom is the status of having enough income to pay one's living expenses for the rest of one's life without having to be employed or dependent on others.

To expand on this, let's check out what Moneyfit.org has to say.  I think their definition is more well-rounded and more detailed.  According to MoneyFit, financial freedom means having enough savings, financial investments, and cash on hand to afford the kind of life we desire for ourselves and our families.

Although the kind of life we want will vary, as will the amount of money we would need, one thing is for sure.  Having financial freedom will help us to worry much less about money and enjoy life a lot more.

To me, financial freedom means being able to live life how I want to live without worrying about where the money will come from.  For me, financial freedom is the ultimate freedom that life has to offer.

The Levels of Financial Freedom

There is never a one size fits all when it comes to your money and the same is true for financial freedom.  There are levels to it.  And for some of us, we would be content with just the first one: debt freedom.

Debt Freedom

Paying off your debt is the first level of financial freedom.  

Debt freedom is having all of your credit card debt, student loans, mortgage, etc completely paid off.  You no longer owe anyone any money and can now spend your money the way you want. 

Becoming debt free is an amazing feat especially when you consider the fact that many of us are tens of thousands of dollars in debt because of student loans.  And when you add that to your mortgage, you are looking at, realistically, over $100k in debt.  Yikes!

But the good news is, once you are free of debt, you feel free.  And for some of us that just may be enough.

Job Freedom

Having enough savings or income coming in from investments that you don't have to work if you don't want to is job freedom.  Being free from work that you didn't want to do in the first place is bliss. 

It is not fun going to a job you hate.  So wouldn't it be nice if you had the choice? Having job freedom gives you that choice.  You could choose to work for less money doing a job you love or you could just skip working altogether to go volunteer and travel the world.  The decision is yours.

When you are no longer bound to a 9 to 5, the world opens up and the possibilities really are endless.

Ultimate Freedom

Job freedom ensures that you and your future are safe as long as you don't spend more than your investments bring in.  But what if you don't even want to worry about going over your budget?  What happens then?  

Enter Ultimate Freedom.

When you've paid off all of your debt, you no longer have to work, and you still have loads of cash leftover, you've achieved ultimate financial freedom.  Here money is definitely not an issue because you have plenty.  So much so that you don't even have to check in on it very often.  And when you do, man does it look good!

Welcome to the big leagues!

Legacy Freedom

Your future might be set for life but what about your children's futures and your children's children?  This is where legacy freedom comes in.  Legacy freedom is financial freedom that will last generations.

It is wealth built and structured to last.  The key word here is structured.  You must know the best ways to pass down your money so that your legacy remains intact.  To achieve this, you will definitely need a superstar lawyer and/ or financial advisor on your side.

So if your dream is to leave a legacy of wealth, then this is the kind of financial freedom you are looking to achieve.

What Does Financial Freedom Mean to You?

The idea of financial freedom can mean different things to different people. People heavily burdened with student loans or credit card debt might wish to be free of it.  Then, they would be happy.

Others, may already be free of debt or may simply want to travel the world and enjoy their lives doing whatever they want.  For them, they would want job freedom.

But what about you?  What is it that you want?  Freedom from debt? Freedom from your job?  Or freedom from any financial worries whatsoever?

To figure out which type of financial freedom you want, you need to figure out your why.  Determining what it is you want from your freedom will not only help you to understand which one is best for you but it will also act as motivation on your financial freedom journey.

Ultimately, you will need to figure out your real reasons for wanting to be financially free.

Discovering Your Why

So what will financial freedom do for you?  Will it allow you to spend more time with your loved ones?  Or free you from the burden of owing money to someone else?

To discover your why, simply ask yourself why you want to be financially free. Then once you come up with an answer ask yourself why again.  And again.  Continue this process until you've asked yourself 5 Whys.  This will help you get to the root reason for wanting financial freedom.

Alternatively, you could imagine what your life would be like when you reach financial freedom.  What would you do?  And why?  Visualizing it can help you see what you want.  And when you can see it, you can believe it.

All in All

Financial freedom can mean different things to different people.  But the key to actually achieving it is defining what it means to you.  By doing so, you are much more likely to stay on track and realize your dreams.

So, figure out your why, determine which type of financial freedom is good for you, then, get to work.

Wishing you the best on your financial freedom journey! : )