Achieving financial freedom is synonymous with achieving the American dream. But what is the definition of financial freedom and how do we know when we have achieved it-are there different levels? During a recent survey, many Americans gave their description of financial freedom, captured in broad terms in the list below, and yes there are different levels.
- Ability to deal with day-to-day—month-to-month finances – cover expenses and bills timely and not worry about having enough money to get by;
- Ability to absorb financial shock – having personal savings and insurance coverage in cases of lost jobs, car repairs, health issues, and other unforeseen life events;
- On track to meet financial goals – planning and taking action to work toward goals, such as saving for a car, home, paying off student loans, happy retirement; and
- The financial freedom to make choices to allow the enjoyment of life – splurge every once in a while, take a vacation and give to others—friends, family and community.
Based on the definition of freedom, are you financially free? Freedom doesn’t require a high net worth or six figure incomes. However in order to reach this goal, it requires financial knowledge and certain behaviors. The Government Accounting Office and the Consumer Financial Bureau both agree that the correct behavior is a major factor in achieving financial freedom. And destructive behavior won’t change until knowledge base changes. The old adage still holds true—“you do what you know”.
Financial Freedom A Guide For Personal Finances can provide you with valuable information to help you make the best of any financial situation Use it to:
- Gain Financial Knowledge;
- Plan; and
- Take Action