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?
6 thoughts on “What’s Your Definition of Financial Independence?”
Financial independence is when your passive income is more than your expenses. When that is achieved you have financial independence.
An eve opener for me. Thanks.
For me financial independence would mean, being free to walk out of relationships i don’t want to be part of..dependence for money, just sucks, it makes your life miserable and from my experiences, i can’t imagine going through dat for the rest of my life!
Grishma, that’s certainly one way to define financial independence.
thats really awesome post really.
vinyas plz remove my email adress and name from the leave a comment box.. plz yaar