Good morning, everyone! Today, I’m swapping blogs with John from Frugal Rules. He’s sharing his thoughts on financial independence here, and you can also check out my guest post on his site about learning languages frugally.
WHAT DOES FINANCIAL INDEPENDENCE MEAN TO YOU?
In our society, we’re constantly told that having lots of money and possessions will make us happy. This idea is everywhere—from TV ads and radio spots to our own inner thoughts telling us we need more to feel complete. It’s easy to confuse wealth with financial independence. I’ve often told my wife how nice it would be to be independently wealthy. However, I’ve learned that wealth and financial independence aren’t the same thing. Many people spend tons of money each month but aren’t disciplined with their finances. No matter how rich they are, without discipline, they aren’t truly financially independent. True financial independence means being free from owing money or favors to others.
FINANCIAL INDEPENDENCE LOOKS DIFFERENT FOR EVERYONE
What works for one person might not work for another. Someone with modest means might enjoy more financial independence than someone with a lot of cash. We all have different lives and face different situations, but we each must find our path to financial independence. Just because someone aims to retire at 40 while you don’t doesn’t mean you’re not financially independent. It just means independence takes different forms for different people.
BEING OBLIGATED TO OTHERS DOES NOT MAKE INDEPENDENCE
A person living a glamorous lifestyle but drowning in credit card debt is not financially independent. They’re relying on borrowed money to fund their way of life, benefiting lenders who make money off the interest. Independence means being free—free from debts and free to make your own choices. However, simply having the freedom to choose doesn’t mean every choice is wise. Achieving financial independence requires disciplined and conscious living.
FINANCIAL INDEPENDENCE IS WHAT HELPS YOU SLEEP AT NIGHT
Ultimately, financial independence is about peace of mind. For some, that means having no debt at all, not even a mortgage. For others, it means managing some debt as long as it’s under control. There is no one-size-fits-all approach; what counts is what helps you feel at ease. I used to be heavily addicted to credit cards, a situation I never want to return to. Now, I sleep well knowing that everything my wife and I have, we bought with our own money.
WHAT DOES MY FINANCIAL INDEPENDENCE LOOK LIKE?
For me, financial independence means being free from almost all forms of debt. The only debt my wife and I have is our mortgage, and if possible, I’d love to eliminate that too. Our goal isn’t to retire early or amass a fortune but to live in balance. This balanced approach allows us to make choices confidently because we live frugally and within a budget. We can afford to do what we want without owing anyone. Our financial independence allows us to plan for the future without being tied down by today’s debts.
WHAT DOES FINANCIAL INDEPENDENCE LOOK LIKE TO YOU? WHAT ARE YOU DOING TO GET THERE?
John is the founder of Frugal Rules, a blog about investing, budgeting, and frugal living. A father, husband, and veteran of the financial services industry, John is passionate about helping people achieve freedom through smart financial habits. Visit him at frugalrules.com.