‘If you want to reap financial blessings, you have to sow financially’ – Joel Osteen
The biggest reason that you can never put a price on financial independence is that it means different things to each one of us.
What does financial independence really mean?
Financial independence could mean one of several things. It could imply:
Freedom from debt and loans
If you have repaid all your debts, this could be your personal financial independence goal. Your income is now yours to manage in the best way you can. Being debt-free is a sound starting place towards financial freedom.
The ability to survive without an income for a few weeks or months
The uncertain situation with job security implies that you must make it a point to have some savings in the event of an emergency. If you are financially independent, you will have the means to hold your head above water for at least 3 months.
The option to change jobs without creating stress in your household
If you’d like to switch your career line or change jobs, financial independence will help make a hassle-free and smooth switch. On the other hand, if your finances are poorly managed and you are simply lurching from one pay packet to the next, changing jobs could lead to an uncomfortable situation.
Breathing space that gives you self-confidence
When you have some savings tucked away or have a steadily growing investment, your self-confidence levels increase. Feelings of insecurity, fear of the unknown or nervousness get minimised and you make your decisions from a confident standpoint.
Financial independence is deeply interlinked to your personal goals which in turn are driven by our own unique beliefs, attitude and motivation. This is the reason why it’s impossible to calculate it with the help of a predefined formula.
What’s important to understand is that whatever your definition of financial independence, work towards with a definite plan in your mind.