What Does Financial Freedom Look Like?


Freedom – A Right

Freedom is central to us as Americans and our great country has been built upon it. Most Americans view freedom as some form of power to determine action without restraint. Or maybe we view it as personal liberty where one can determine their direction and pace, but in any case, freedom focuses on allowing people to decide for themselves without binding external commitments or obligations.

Financial Freedom – What Is It?

Financial Freedom is also about the liberty to chose without restraint. Since our finances are simply tools for us to use to meet our life’s goals, financial freedom is defined as having the attitude and resources to live abundantly in each stage of life, free of worry, to completely live out the full purpose of one’s life. Many people have heard about the concept of financial freedom, but what does it really look like? I mean, of course I want to be free to do what I want, free to enjoy myself and free to pursue my dreams. But beyond that, what is the big deal? Is it just about having some money?

Financial freedom goes far beyond having a few bucks. Sustainable financial freedom enables us to reach our potential as people. This freedom has five key components. Let’s take a look at those components and how they fit into your life

  1. A VISION for how you want to invest your time, talents and money
    • Answer the questions: Why am I here? What am I passionate about? What does my life plan look like? The purpose of this Vision is not to rigidly plan your entire life, but to form a direction and plan of action to focus your efforts. Freedom to pursue one’s passions and goals is worth the effort to define one’s vision. How can you pursue your dreams when you don’t know what they are?
  2. PLAN (budget) that supports your vision and quality of life you want to maintain
    • There’s that dirty word, Budget. Don’t let it throw you. A budget is simply a plan for spending your money that is consistent with the vision you have for your life. If you make a budget and it doesn’t work for you, change it, but make sure it meets a couple criteria:
      • You live within your means: Only spend money you have
      • It includes your savings goals
  3. DEBT-FREE approach to everything we purchase
    • A debt-free approach doesn’t mean we NEVER use debt, but that we use money we have whenever we can and when we use debt, we prioritize the elimination of debt in our budget. A wise man once said: “The debtor is slave to the lender.” There’s no slavery in freedom.
  4. A bias toward SAVING
    • Savings must be a priority in your budget. How much do we need to be saving? Let’s start the conversation at around 15% of our take home pay. Why? Because we need to have three types of savings for future needs: We need an Emergency Fund for when life throws us a curveball. We need savings for Retirement and we need to be saving toward known future expenses, like cars, furniture, kids, etc. Adequate savings allows us freedom to act when we want to.
  5. An ATTITUDE of contentment with where you are, and gratitude for what you have
    • Don’t compare yourself to anyone else, but be content with where you are. Contentment brings peace and peace is a large component of freedom. Gratitude focuses our mind on what we have instead of focusing on what we do not have. Be grateful, always.

Financial Freedom – Putting It All Together

With a vision for your life, the proper attitude and some basic financial plans in place like a budget and savings plan, you have the components of living financially free. Free to pursue your dreams. Free to be generous. Freedom from worry and anxiety. If you want to learn more about financial freedom, you can get more information on our Facebook page or on Twitter.

Want more help with financial freedom? Try Dave Ramsey’s book The Total Money Makeover. Click the image and SAVE!

The Total Money Makeover: Classic Edition: A Proven Plan for Financial Fitness

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