Why Financial Freedom is More Than a Number

Financial freedom is more than a number in your bank account or the success of a single investment. For most people it means having enough money to live the way they want and pay bills without worry. 

It’s about feeling comfortable and secure and having the freedom to make choices that align with your personal values and priorities. True financial independence allows for flexibility in how you approach work, travel, and personal projects—giving you the confidence to pursue opportunities and experiences without hesitation.  

Keep reading to learn more about practices that can help you achieve financial freedom.

Focus on budgeting  

A budget can help you spend intentionally so your dollars flow toward what matters most. Creating a budget also helps you set aside funds for future needs while allowing you to cover daily purchases. Here’s a few budgeting strategies to keep in mind on your financial journey:

• 50/20/30 Budgeting rule: This method helps you split your income into three categories—needs (50%), wants (20%), and savings (30%). It’s a flexible way to balance enjoying life while saving without having to track every little expense.

• Zero-Based Budgeting: With this approach, you give every dollar a job. By the end of the month, your income minus your expenses should equal zero.

• Value-Based Budgeting: This one is about spending on what matters most to you— whether that’s travel, hobbies, or experiences. Instead of sticking to strict categories, you prioritize expenses that add the most value to your life and make intentional choices that align with your priorities.

Set goals   

Financial freedom looks different for everyone, so defining your personal goals is important. When you can pinpoint those goals, whether big or small, short-term or long-term, you can stay focused and on track.

Short-term goals might include building a savings cushion or paying off small loans, while long-term goals could involve investing for retirement or a large home or car purchase. Once you create clear goals, set a timeline to keep you motivated. An example would be paying off a credit card or establishing a specific amount of savings by a certain date.   

Pay off debt 

Less debt can give you more financial freedom to do the things that mean the most to you, like taking that dream vacation, renovating your home, or starting a business. Being debt-free can also give you more room to save and invest. There are multiple methods to pay down debt, but here are two common approaches to consider:

• The Snowball Method: List all your debts from the smallest to the largest and work toward paying off the smallest debt first while making minimum payments on all the others. Once you clear the smallest debt, you’ll roll that payment amount into the next smallest debt, and so on.

• The Avalanche Method: With this method, you’ll list all your debts from highest to lowest interest rate, pay down the highest-interest debt first, and make minimum payments on the other debts. Once you eliminate the debt with the highest interest rate, you can redirect payments to the debt with the next highest-interest rate. This will save you money on interest over time.  

Invest in the future  

If you want financial freedom, you can explore smart investment opportunities. Investments are a way to grow wealth over time. This is an area where research, asking questions, and contacting a financial advisor may be helpful.  

Though it’s not often thought of alongside investments, certain types of life insurance can be an important part of your broader financial plan— helping protect your family and the growing value you can access to help you reach your financial goals. Comparing the cost of premiums, coverage type, and length of coverage in term vs permanent life insurance is a helpful place to start.

Prioritize saving 

Regularly saving extra money can support your financial security in the near and far future. One way to prioritize this is to sign up for automatic savings with a bank. This way, you can transfer a specific amount from checking to savings accounts every month or every paycheck. Contributing to a 401(k) plan with an employer or a Roth IRA is also a good way to build a safety net.  Budgeting apps, financial advisors, and online resources can also help if you want to learn how to save more efficiently.

Financial freedom is about building the life you desire without being held back by your finances. You can achieve this in part through budgeting, goal setting, managing debt, making smart investments, and saving. You can also make financial choices, like understanding the benefits of life insurance, that lead to comfort and security in the years ahead.