Financial Wellness Series Week 1 - Financial Freedom vs Financial Independence

Intro

Today is the first week of our Financial Wellness Series. Most of our mental stress is due to monetary concerns, so how can we lessen that stress? We will be spending the next few weeks looking at how we can thrive in our finances and some practical steps for improving our income. This week, we are looking at the difference between financial freedom and financial independence.

Point 1: Financial Independence

Financial independence is defined as not being dependent on a specific source. We all start from financial dependency. When we were kids, we depended on our family to provide for us. As we grow, we sometimes remain in that state of dependency and remain unable to take care of ourselves. Once we are able to provide for ourselves, we have become financially independent.

Point 2: Financial Freedom

Financial freedom does not have a specific definition. It is a nebulous idea and not a concrete number. Every person and organization must define financial freedom for themselves. However, it is achieved, the results are the same. Peace of mind, no financial stress, the accumulation of true wealth. If you are experiencing these effects, you are probably financially free.

Point 3: 15 Financial Suggestions from Dave Ramsey

If you are not familiar with Dave Ramsey, he is one of the most famous financial consultants in the world. He has much experience with financial freedom, and has a lot of advice that we can learn from. I have picked out just a few of his really good tips:

How To Achieve Financial Freedom

1. Learn How to Budget

You need to learn how to budget for any financial area of life. If you are spending beyond your means, you will never gain financial freedom.

1. Get Out of Debt – For Good

Do not spend more than you can afford. And if you are currently in debt, pay it off as soon as possible. It is also important to not go into more debt as soon as you are free of your first debts.

1. Set Financial Goals

In the beginning of the year, many people set wellness goals. Very few people look at financial goals. If you are serious about making a financial change in your life, you need an end goal to work towards.

1. Be Smart About Your Career Choice

Whatever your degree or work history, there are always other work opportunities. Do not settle for whatever job you first start in. Always look to optimize the skills you have and the career you are in.

1. Save Money for Emergencies

This is something to think about as soon as possible. Nobody knows what tomorrow holds. Do you have money set aside for any surprise expenses? If your car breaks down, do you have the resources set aside for repairs?

1. Plan for Big Purchases

If you know that you will need a new house in a few years, begin to plan for that. Be looking at the marketplace beforehand. Monitor prices, and buy at the best time. Have money set aside specifically for big purchases.

1. Invest for Your Retirement Future

We do not want to burden our descendants with our financial trouble. Our kids should not have to pay for our retirement. Be wise, and have enough money set aside for the later years of your life.

1. Look for Ways to Save Money

There are many ways to save money. Some banks have certain account types that are more conducive to saving money than others. Do some research and find the best place to save your money.

1. Live Below Your Means

It is tempting to spend all the money you have when you get a paycheck. When you do that, you are sacrificing your future for your immediate pleasure. Set aside some money as soon as possible. Get a smaller size drink and put the extra money in a savings account.

1. Help Your Kids Save for College

As soon as your kids are able to think about money, begin to teach them the best ways to manage finances. Set up a savings account for them and begin to look at potential schools for a monetary goal to strive for.

1. Pay off Your Mortgage Early

For those who have a house, prioritize paying off your mortgage as soon as possible. Most payments have interest on them. The sooner you pay off the mortgage, the more money you can keep for your family.

1. Make Your Health a Priority

It makes no sense to injure yourself making money, then using that money for hospital bills. Work hard, but invest in your health as much as your material possessions. Paying for a gym membership may seem like a financial drain at the moment, but it is much cheaper than a hospital bill will be.

1. Get the Right Insurance in Place

Insurance is a very complicated area of life. It is important to do research and ask knowledgeable people for advice on getting the best insurance for you and your family. Insurance is a necessary safeguard for finances. It is better to pay a little bit and be safe than to have surprise expenses that you must pay yourself.

1. Work with a Financial Advisor

This is related to the last point. We do not know everything, so finding those who have experience in financial areas to advise you is a necessary step to financial freedom. Do not try and do finances on your own. That is an easy way to lose money quickly.

1. Be Generous with Others

As you are achieving financial freedom, be considerate of those around you. Not everyone who has financial trouble is lazy or a bad worker. Some people have unfortunate situations that life has thrown at them, and your help could make all the difference to them. Extending help to the needy is a good way to be fulfilled in your finances.

Summary

Financial freedom is attainable. Even if it seems like you are drowning in debt and you cannot get out, do not lose hope. There are steps you can take to begin taking back your finances. Work hard, make some changes, and your finances will begin to thrive!