Financial freedom means vastly different things to different people. For some, financial freedom simply means being able to pay your bills on time and build a savings account for emergency funds. Other people want those things in addition to being able to eat out, buy designer shoes, and go on vacations when they want. Still, others want to have all of that while retiring early, too.
Your personal values will determine what financial freedom means to you, and it may take some reflection to figure it out. Ask yourself what is important. Do you value more time to do fulfilling activities outside of work? Do you enjoy your job, but want more flexibility in where your money goes? Do you currently have enough money to cover emergency expenses? The answers to these questions will determine your focus when deciding how to achieve financial freedom.
Regardless of what your goals are, starting your path to —and possibly even achieving—total financial freedom is the best gift you can give yourself and here is why:
Financial Freedom is Freedom From Worry
Biting your nails, stress eating, and compulsive cleaning, are only the mildest symptoms of worry. Chronic worrying takes its toll on the body and can lead to heart problems, insomnia, and even infertility. People who worry all the time have more volatile moods, are more prone to depression and have a higher chance of early death.
When you spend a lot of time and energy worrying about having enough money to pay your bills or dealing with late fees and bank overdraft charges, you expose yourself to the risks that come from chronic worry.
Financial freedom means you have enough money to pay the bills you have, and you can cover any emergency expenses. You do not have to suffer from a big knot in your stomach when you think about the cost of your next big home or auto repair, and you create a happier, healthier life for yourself and your family.
Financial Freedom Means Empowered Choices
When you struggle to get control of your finances, your choices become limited. Instead of deciding what you will spend your money on, you spend it on what you must. People who have no savings hold off on making larger purchases until they have to, which leads to going into debt and making hasty decisions.
Having a handle on your finances can help you feel like you have a choice in money matters. You can take your time to shop around for more expensive necessities instead of making a purchase in a hurry. Hunting for a bargain may mean getting that phone, laptop, or even car, for significantly less. When your bills are paid and you have some savings, you can choose where the leftover money goes without spending every last bit on things you absolutely need.
Financial Freedom Means Focusing on Your Personal Values
Working constantly in order to make ends meet leaves little time to think about what matters most to you. They say that money can’t buy happiness, but it actually can to a point. Having the right balance is key. Researchers have found that people need between 60 and 75 thousand dollars a year in order to have emotional well-being and about 90 thousand dollars a year for life satisfaction. Of course, it is different for every region of the world, depending on the cost of living and cultural views; but the idea is that you need to make enough money so you can focus on your values in life. This leads to a greater sense of satisfaction and purpose.
Financial Freedom Allows You to Plan For the Future
You may struggle to look beyond paying your monthly bills. If you have no savings, or you can’t seem to get past saving the minimum three to six months’ worth of expenses, you are stuck in the present, watching everything that comes in and goes out. Wouldn’t it be great to be able to plan to buy a home, go on vacation, or even just treat yourself to something nice, instead of dreaming about it while you sweat over how you will pay your phone bill this month?
Financial Freedom Allows You to Think Positively
Having enough of the things you need, and being able to have at least a few of the things you want, can go a long way in contributing to your health and well-being. When you carry the weight of worry over money or your future, then you put yourself at risk for health problems—which can lead to more financial issues. Stress over money is on the list of top ten things couples fight about. Financial struggles can put a serious strain on a marriage and even lead to divorce.
We have all heard that we should try to find a reason to be thankful on a daily basis, regardless of our circumstances. It is much easier, however, when you know your financial matters are taken care of. Make things easier on yourself by working toward financial freedom in 2020.