What Is The Difference Between Financial Independence and Financial Freedom?

What Is The Difference Between Financial Independence and Financial Freedom?

People in today’s society believe having a strong relationship with your finances is a very important aspect of life. Regardless of the contentious debate over whether money leads to happiness, millions of people are undoubtedly seeking financial independence. After all, nobody wants to be struggling to afford the basic items that we need in order to comfortably survive. Taking good care of your funds is one of the greatest skills we need to invest in to be able to successfully budget. Ultimately, for many households, the end goal is to be able to become “worry-free” with their finances. After all, no one needs the additional stress of their finances dragging them down. Many people suggest they would like to achieve either financial freedom or financial independence. However, what are they both and how do they differ?

Financial Independence

For many people, financial independence is very difficult to achieve. Without having either a strong, stable source of income or multiple streams, the likelihood is very low. So, what is financial independence actually? Being financially independent suggests that you are in control of all your important expenses. Along with this, it can actually be categorized and calculated in many different ways, it isn’t necessarily just being able to afford your outgoings. Many people understand the phrase as individuals being comfortable and at ease. Especially when paying the bills and purchasing those things which may not be as important, like your daily morning coffee stops or weekly trips out. 

Financial Freedom

Financial freedom is the most commonly used term when speaking about what position individuals would like to achieve in the future. This category of freedom can also be identified as the next step up from financial independence. Just take the idea of financial independence and add all of the additional, perhaps not essential, luxuries of life to it. For example, being able to take extravagant vacations and partake in endless shopping sprees whenever you like without feeling any financial constraints. Unfortunately, financial freedom is a goal that many people never achieve, as managing your finances as an individual is difficult enough without the added stress of bills and debts. Being faced with important bills can be worrying, especially if you lack any kind of savings or emergency funds. If you find yourself in a similar situation here at LoanPigUSA, we can help by providing you with a payday loan

What Next?

There is a distinct difference between financial independence and financial freedom. So, now that you know more information about both sides, you should be more inclined to make the right choice. Deciding between the two options and choosing which to work towards will allow you to create a specific target in order for you to reach a financially stable position in the future. So, what is your plan?