Finance

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?

6 thoughts on “What’s Your Definition of Financial Independence?

  1. 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!

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