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Of late, I’ve been thinking a fair bit about financial independence. The Simple Dollar summarizes it best in defining financial independence to include:
- Freedom from financial reliance on loved ones
- Freedom from financial reliance on creditors
- Freedom from financial reliance on employment
That set me into preparing the checklist below which constitutes what I define to be financial independence, given my current situation.
My financial independence checklist:
- I do not have any credit card debt
- I do not have any vehicle loans to be paid
- I do not have any education loans to be paid
- I do not have any personal loans to be paid
- I do not have any home loans to be paid
- I do not owe money to any person
- I have a sufficient emergency fund in place
- I have independent health insurance for myself
- I have independent health insurance for my dependents
- I have independent life insurance to take care of my dependents
- I have established a plan to achieve my goals (financially)
There’s a lot to be done before I can declare financial independence. But having such a checklist is a start and keeps you focused. Further, having such a list does not imply that one has to be stingy; you just have to be financially responsible.
So, what’s your definition? How do you plan to get there?
Thanks for reading this article. I'd love to hear your opinion. Please use the comments section below to share your thoughts. I frequently write new articles that also cover several other aspects of personal finance including credit cards, financial goals, health insurance, income tax, life insurance, mutual funds, retirement planning, and much more. You can Subscribe through Email and receive new articles directly in your Inbox or you can Subscribe through the RSS Feed and receive new articles in your feed reader.