What’s Your Definition of Financial Independence?

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:

1. I do not have any credit card debt
2. I do not have any vehicle loans to be paid
3. I do not have any education loans to be paid
4. I do not have any personal loans to be paid
5. I do not have any home loans to be paid
6. I do not owe money to any person
7. I have a sufficient emergency fund in place
8. I have independent health insurance for myself
9. I have independent health insurance for my dependents
10. I have independent life insurance to take care of my dependents
11. 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?

Further reading:

1. Why Should You Be Financially Independent?

Tagged as: independence