Saving the Crumbs

Life more efficient, frugal, & meaningful

  • Start Here
  • Topics
    • Principles
    • Our Finances
    • Investing
    • Food & Kitchen
    • Home & Auto
    • Gardening
    • Tips & Tricks
    • Reviews
    • For Fun
    • Blogging
  • About
  • Recommendations
  • Archive
  • Contact
Home » Principles » Financial Independence: Independence from What?

Financial Independence: Independence from What?

July 3, 2016 By Al 6 Comments

Financial Independence: Independence from What?It’s July 4 weekend which means it’s time to celebrate Independence Day again here in America.  In line with this theme, I want to reflect a little bit on the idea of “financial independence.”  After all, that’s the goal that so many people are striving for, and in a way, the whole theme of this Saving the Crumbs blog.

What is it really though?  I have discovered that it means rather different things to different people.  Here are some ways people view this concept based on my personal observation.  This isn’t scientific research or anything, and I suspect there’s a fair deal of overlap where people may hold to several of these viewpoints. Are any of these your reason for financial independence?

Financial Independence: 8 Perspectives

1. To Have Enough to Meet the Needs

For some, financial independence is attained when they simply have enough to pay the bills, put food on the table, and keep a roof over their heads.  It’s simply to have the security that the necessities of life are taken care of for themselves and their loved ones.

2. To Have Enough to Buy Anything

For others, it’s not simply to meet the basic needs, but it’s to not have to think whenever they want to buy something.  New iPad is out? Need a new dress? Friends are all going out to eat?  Many think that financial independence is attained when they can say “YES!” to all of these things without blinking.

3. To Have More Than Enough

Yet others don’t stop there, for them financial independence is a moving target.  They are constantly needing more.  No amount of money is going to be enough because they find thrill in the pursuit of it.  For these folk, financial independence is better defined as a state of constant accumulation.

4. To Be Out of Debt

For a growing segment of society in the developed world, being out of debt is the definition of financial independence.  Freedom from the creditors!  But even within this camp, there are multiple layers of interpretation.  Some may mean being debt-free only from credit cards and student loans but not a house or business loan.  Others may mean being free from all debt, including the home mortgage, business loan, and the twenty bucks they were spotted by their friend for lunch last week.  The spectrum of how people define what “debt-free” truly is can be rather wide.

5. To Have a Job

For some people, financial independence is to simply have a job.  Maybe for some it’s to have a decent-paying job, while others it’s to have any job at all!  For these individuals, freedom from money worries can be attained once they can develop a dependable income stream.

6. To Not Have to Work Anymore

On the opposite end of this discussion are the early retirement folk.  Their idea of financial independence is to NOT have to work anymore—to have built up enough investment assets to be able to live off the passive income it throws off.  To put it technically, their assets generate income that’s more than their living expenses.  For some it’s to get out of the rat race of being a “wage slave” (i.e. being entirely dependent on a job for financial sustenance) as quickly as possible (some by age 30!) while others it’s just to shave off a few years from their retirement age.  Frequently, when these people reach financial independence, they don’t actually stop “working”, they simply have the freedom to choose the “work” that they find fulfillment in doing.  (And as an aside, this is the definition of “financial independence” if you look on Wikipedia.)

7. To Be Self-Sustaining

There is also a growing style of financial independence that says, “Why live a lifestyle that requires money at all?”  These are those who choose to live an entirely self-sustaining lifestyle that requires as little economic input as possible.  Frequently this results in an off-the-grid, homesteading lifestyle. Where a family or small community produces all they need to live without requiring the imports of goods from others.

8. To Not Have to Care What Other People Think

For some, financial independence is simply the state where they can stop worrying about what others think about them, their lifestyle, their values, and their choices.  This may come in different flavors.  For some, it might be achieving the “wealthy lifestyle” to impress family and friends, whereas for others it’s simply to stop caring that their friends think they’re cheap because they prefer brown-bagging their lunch to work instead of eating out with them every day, and for yet others it might be some other variation on this theme.

Money Isn’t Everything…

Even though materialism and greed are generally viewed as negative qualities, it’s difficult for anyone to evade money completely.  It reminds me of an idiom I’ve heard once,

Money isn’t everything, but without money you have nothing.

So in pondering over these various perspectives on financial independence, it seems to me that the common denominator for people is to reach a state where they no longer have to worry about money.  There’s a recognition that money is a part of life whether we like it or not, so the best we can do is to arrive at a state where it isn’t something that we need to expend too much precious time and energy fretting over.  Some realize that this can only be achieved through diligence in earning an income and disciplined saving, but others make the mistake thinking that debt can cover up their worry. In reality, they’re just exchanging one worry today for much bigger worries down the way.

An Illusion of Financial Independence

As you may have picked up already, certain flavors of financial independence can be artificially generated–at least for a while.  Meaning, a facade of financial independence can sometimes be manufactured through the use of debt.  But maintaining a financially successful outward appearance may belie severe indebtedness which is no independence at all.  So in your own definition, just beware that you’re striving for a genuine article and not simply an illusion.

So what do you think?  Anything I missed?  What does financial independence mean to you?  Please share with us in the comments below!

Related Posts Plugin for WordPress, Blogger...

Share this:

  • Tweet
  • More
  • Print
  • Share on Tumblr
  • Pocket

Filed Under: Principles Tagged With: financial independence, personal finance

← Brexit! Run for the Exits? Easy “Miso” Soup – Without Miso →

Comments

  1. Toya says

    July 3, 2016 at 4:29 pm

    Financial Indeoendence to me means getting out of debt from student loans and not living from paycheck to paycheck. It also means that I can support my church, charities, myself etc without owing anyone anything.

    Reply
    • Al says

      July 3, 2016 at 4:56 pm

      Indeed, getting out of debt and into a position where you can give generously is certainly a worthy goal to strive for. Thanks for your comment, Toya.

      Reply
  2. Carole says

    July 3, 2016 at 7:59 pm

    I have wondered, too, what the term meant, and decided it meant being able to retire early if one wanted to do that.

    Reply
    • Al says

      July 5, 2016 at 3:32 pm

      Yup, that is the most commonly accepted definition of the term.

      Reply
  3. Brandon says

    July 15, 2016 at 1:41 am

    Just stumbled across your blog and I am just checking things out. I am liking what I am reading so far. I enjoyed the definitions listed for financial independence. My goal is to get my house paid off as soon as I can and to max my retirement accounts out each year. I will be very close to maxing out my 401k this year. In summary my definition will be maxing out retirement accounts along with no debt, being able to give to causes that matter most to my family, and being able to spend more time with my family.

    Reply
    • Al says

      July 15, 2016 at 3:45 pm

      Welcome Brandon! So glad you found our little blog in this corner of the Internet. Maxing out the 401k is no small feat, my friend. Great job! That coupled with a paid-for house definitely has the ring of financial independence to it, I’d say!

      Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Subscribe to Our Newsletter

Latest posts delivered right to your inbox.

Check your inbox or spam folder now to confirm your subscription.

Meet Deb & Al

She's a bargain hunter and he's a numbers nerd. Together we're a husband and wife team who believe that by living an intentionally frugal life, the door flings open to a truly fulfilled existence. Read More…

Online Banking
Cardpool
Advertising

Popular Posts

  • How We Eat for Less Than $60 a Month: A Peek into Our Food Budget How We Eat for Less Than $60 a Month: A Peek into Our Food Budget
  • Planning a Wedding for Less Than $3,000 Planning a Wedding for Less Than $3,000
  • How We Eat for Less Than $60 a Month: What We Buy How We Eat for Less Than $60 a Month: What We Buy
  • How to Pay Off the House in 2 Years How to Pay Off the House in 2 Years
  • How We Eat for Less Than $60 a Month: How We Cook How We Eat for Less Than $60 a Month: How We Cook
  • Easiest Cheapest Granola Recipe Ever Easiest Cheapest Granola Recipe Ever
  • How to Plan a Menu On a Budget How to Plan a Menu On a Budget
Advertising

Library

  • January 2018 (1)
  • July 2017 (1)
  • June 2017 (1)
  • May 2017 (3)
  • April 2017 (2)
  • January 2017 (1)
  • December 2016 (2)
  • November 2016 (2)
  • October 2016 (2)
  • September 2016 (1)
  • August 2016 (2)
  • July 2016 (5)
  • June 2016 (4)
  • May 2016 (4)
  • April 2016 (3)
  • March 2016 (4)
  • February 2016 (3)
  • January 2016 (5)
  • December 2015 (2)
  • November 2015 (3)
  • October 2015 (2)
  • September 2015 (3)
  • August 2015 (3)
  • July 2015 (4)
  • June 2015 (3)
  • May 2015 (5)
  • April 2015 (4)
  • March 2015 (5)
  • February 2015 (4)
  • January 2015 (4)
  • December 2014 (10)
  • November 2014 (8)
  • October 2014 (10)
  • September 2014 (11)
  • August 2014 (10)
  • July 2014 (11)
  • June 2014 (12)
  • May 2014 (7)
  • April 2014 (1)

Tags

aldi baby borrowing budget buying used car cars cellphones Christianity contentment coupons debt diy electricity electronics energy expenses food freebies frugality garden gardening giving groceries health house income insurance investing kitchen loans mortgage needs parenting personal finance recipes relationships retirement risk sales saving money savings spending wants wedding

Pages

  • About
  • Archive
  • Contact
  • Privacy & Policies
  • Recommendations
  • Facebook
  • Google+
  • Twitter
Top Personal Finance Blogs

Disclosure

All information provided on this site is for informational purposes only and does not constitute professional financial advice. You should talk to a financial professional for help with your specific financial needs. We may receive a referral fee if you sign up through the referral links on Saving the Crumbs.

Copyright © 2018 Saving the Crumbs · Built with Genesis by StudioPress · WordPress · Log in