Why is Financial Freedom Important? The Top 10 Reasons
Financial Freedom is the state of being free from financial worries, debts, and constraints. Achieving financial freedom allows us to live the life we want, without worrying about money and debt. This gives us the power to take control of our lives, make our own decisions and live life on our own terms.
First, Exactly What is Financial Freedom?
Financial freedom can mean something different to everyone and this is because everyone has different requirements. While somebody with modest expenses could easily achieve Financial Freedom with $1,000,000, another person with a lavish lifestyle might not be content until they have $10,000,000.
Either way, Financial Freedom is generally defined as having enough passive income to cover all your expenses without having to work for money.
This means having enough financial security to live life without financial worries and can take risks without fear of financial ruin. Financial Freedom can be achieved by reducing debt and expenses while investing in income producing assets like stocks, bonds and real estate.
With Financial Freedom, you have the ability to choose how you spend your time, without worrying about how to pay for it. It’s the ultimate goal for many people and is something that can be achieved with careful planning and hard work. Whether you’re currently in debt, just starting to save your emergency fund or already in the final stages of financial independence, learning how to get to the next level is more important than ever.
Here are the Top 10 Reasons Why Financial Freedom is Important
Freedom from Debt
Money arguments are the second leading cause of divorce (behind cheating) and this all stems from debt.
For most Americans, debit is a major concern that leads to financial stress and anxiety and the first step towards Financial Freedom is getting out of debt.
The worst part about debt is that you have to pay someone else interest for this debt which can turn into hundreds or even thousands of lost dollars every single year. Once you pay off your debt you can start to build your emergency fund, stick this in a savings account and start EARNING interest instead of paying it!
Financial Freedom essentially means that we are buying back our time. When we’re not financially dependent on our job, we can choose to work less or not at all. This allows us to spend more time with our family and friends, pursue hobbies, interests and travels.
It also allows us to take advantage of opportunities that someone with a full-time job can’t. This can include learning a new skill, taking a class or even something as mundane as being able to schedule a dentist appointment whenever you want.
Security and Peace of Mind
Financial freedom gives us security and peace of mind. When we no longer have to worry about how to pay bills, or how to support ourselves and our family, we naturally feel more secure. Our minds can stop racing about how we’re going to buy groceries or pay to fix our car and we can focus on doing more productive things with our time and energy. This can lead to improved mental and physical health since we no longer have to deal with the stress and anxiety of financial worries.
Ability to Take Risks
Financial freedom gives us the ability to take risks and pursue our passions without fear of financial ruin. If you’re living paycheck to paycheck you’re much less likely to try something risky and instead always choose the safe path. But it is risk and taking a chance that leads to big rewards.
Whether it is starting a business, pursuing higher education or taking a gap year, financial freedom gives us the freedom to take chances and pursue our dreams.
Learning to Live with Less
Living below your means can have a profound effect on how you view the world. When we’re no longer burdened by our material possessions we can live a less cluttered and more free life.
We also won’t be spending our money to get the latest gadget which will give us more money to save and invest.
Freedom to Pursue Your Passions
One of the biggest benefits of Financial Freedom is the ability to pursue your passions and interests without being limited by a need for a steady income. Whether you want to travel, start a business, write a book, or volunteer, financial freedom gives you the means to do it.
No longer do we have to work a 9-5 job just to make ends meet and instead we can spend our time doing what we love and what brings us fulfillment.
Reduced Stress and Increased Happiness
Money is a common source of stress and anxiety for many people. When you have financial freedom you will naturally have less to worry about. This lets us focus on other things that bring us true happiness. This increased sense of well-being and reduced stress can improve your overall quality of life.
How many times have you gone through the McDonald’s Drive-Thru or had that extra drink because of a stressful day at work?
Financial Freedom gives you the flexibility to make decisions about your life without being limited by your income. With Financial Freedom, you can choose to work part-time or take a break from work altogether to raise a family, start a business or just take some much need time off.
You may also be able to take advantage of new opportunities, investments or business adventures as they arise, without having to worry about the financial risks involved.
Stress and anxiety are not only bad for your mental health, they can also have a detrimental impact on your physical health. When you have Financial Freedom, you can reduce the stress and anxiety that comes with financial worry, leading to improved health and well-being.
This is because people are stressed our they tend to make unhealthy decisions like eating junk food, drinking too much and smoking as a way to relieve this stress.
Increased Ability to Help Others
There’s a lot of research out there showing how volunteering leads to increased happiness and Financial Freedom also gives you the ability to help others in a way that you may not have been able to otherwise.
Whether you want to volunteer, donate to a charity, help a friend in need, or leave a legacy for future generations, financial freedom gives you the means to do so.
To Sum Up on Why Financial Freedom Is Important
We live in a world where our freedom and options are largely controlled by our bank accounts. With enough money saved up and invested, we can buy back our time and spend it doing the activities that are most important to us.
Financial Freedom also reduces stress and can improve our mental and physical health while at the same time giving us a chance to give back and help others in need. This is crucial for living a well-balanced and happy life.