Each of us has our own ideas and opinions on what financial freedom is. Some think:
- It is having a large amount of money.
- It is having total control over their life and being able to do whatever they want.
- It is not having to work, always being on vacation, and doing fun, expensive things for entertainment.
Financial freedom may not be about how much money you have, but about the habits surrounding the money you do have.
Having an accounting background, I have seen people who have had a lot of money. Were they free because they had a mountain of money?
A good example of having a lot of money is Bill Gates. Mr. Gates is worth billions of dollars. This means he has the ability to buy anything he wants and do whatever he wants. But does he have financial freedom? He has to worry about his and his family’s personal safety because of his money. There are people who are looking for ways to take advantage of him because of his money. Is that freedom?
If financial freedom does not include the freedom to go where and when you want to, or the appreciation and love for what you have, without always wanting more, then it is not financial freedom. Trying to always keep up with the Joneses is not financial freedom.
What comprises financial freedom.
Can we have financial freedom without having large amounts of money coming in? Yes!
Financial freedom is when you have more money coming in the front door than is going out the back door. You must have the right kind of outflow. What I mean is that it does not matter how much income one has if expenses and spending habits exceed that income. One is not financially free. You must make a habit of spending less than the available. One of the best tools to create this habit is by creating a budget that directs your spending.
Financial Freedom Habit
In order to develop this habit that leads to financial freedom there are helpful steps to take.
- Create a vision of what you want to achieve and the time frame you want to do it. Time frames with the desired result will give you a reason to get it done with a chance to check how you are doing.
- After the plan comes the budget to direct spending toward your targeted results. The budget helps with your spending habits and income requirements.
- You will need to develop disciplined actions to get the critical habits. Remember QUALITY HABITS GET QUALITY RESULTS. Most have grown up without good spending habits, if you are one of those as I was, all is not lost. Just take small doable steps consistently to build those habits.
The way to your desired FINANCIAL FREEDOM = HABIT (VISION + BUDGET + DISCIPLINE).