Do you need financial freedom?

Written by Lisa Pallavi Barbora

Lisa Pallavi Barbora is a Senior Consultant for Content at WFAN. Lisa is also a founder of In her earlier avatar, she was a National Writer and Consultant for HT Mint - a premier business journal in India.

January 12, 2021

Before we get to attempting an answer to the question the headline is seeking, let’s understand what we mean by financial freedom. It’s not a frivolous term that describes being rich or having a limitless pot of money. Neither does it mean that you can afford to be a couch potato for the rest of your life.

Financial freedom is not one thing, it could be many different things for different people.

You must identify what financial freedom means to you. For someone it might mean the freedom to choose what time you reach or start work for the day, for others it could be the freedom to work for themselves. It could mean being able to undertake sudden home repairs without the anxiety of noting a high expense, or the freedom to be on a luxury vacation for a month a year.

Each of us will have our own notion of financial freedom. Whatever yours’ is, that is the version you must pursue.

When you understand and see clearly that financial freedom is more than about affordability and net worth, you will see that it is about pursuing that which is most important to you. Then the question that the headline is seeking to answer, itself becomes irrelevant. If you want to achieve your life’s dreams, your interpretation of financial freedom will always be important to you.

The question of whether you need it or not simply doesn’t arise, because we all want what is important to us.

In this light now let’s understand how we can come closer to knowing what it is that fills in the meaning of financial freedom in our lives.

Knowing what financial freedom looks like

In its most basic form, having financial freedom means having options. The option to decide what you want to do for a living. Or it could be the option to not panic when you have a medical emergency that’s going to cost an arm and a leg. Or even the option to splurge on buying handbags this month.

In order to narrow down to what makes up your idea of financial freedom, you will have to write down with great clarity what your life goals are. This can’t be borrowed from your parents, your spouse or your children.

Your life goals are personal to you and what you want to achieve.

It may involve your family, but is not a reflection of what they also want from life.

Make sure to specify the goal in terms of the exact outcome. For example, your goal could be to achieve financial freedom so that you are able to share at least 30% of your wealth starting from retirement to as long as you live. Or it could be the freedom to own a luxury car without compromise on the rest of your lifestyle.

Define, by writing down, what financial freedom means to you and then get ready to achieve it. It’s important to articulate this and also visualize it.

How can you get closer to financial freedom

Achieving exactly your version of financial freedom is not a given. You have to work towards it.

This means making lifestyle choices, making professional choices and making emotional choices all in the direction of your frame of financial freedom.

Let’s take the example above and say that your version of financial freedom involves having an easy start to everyday rather than having to rush into work at 8:30 am. To achieve this, among other things you may have to consciously choose not to chase a very sharp growth trajectory at work. A CEO of a large organization, for example, is rich and can afford a lot of material comforts but will not have control over spending personal time; waking up early and working late come with the job of leading an organization.

To achieve your version of financial freedom as set out in this example, you may have to define a less lavish lifestyle as compared to a CEO and choose a more comfortable career path which allows you the balance of an extended breakfast with the family every morning of the week.

On the other hand, if your version of financial freedom is defined as owning a super luxury sedan before you reach the age of 35, then you have to push forward on a more aggressive career path and striving to be CEO will help you fulfil this goal.

While there is no common financial freedom among individuals, the way to achieve it is similar for all. The first requirement is writing it down and then using what you earn today in a manner that benefits this vision. This can only be done by saving adequately and then investing purposefully. Financial freedom is not a one-time act or achievement, it has to be sustainable. For that you need to consistently save and investment in a manner that fulfils the requirement for as long as you are an active earner.

Your idea of what financial freedom is can possibly keep changing and you should be ready for that. When you retire from active work life, financial freedom will have a different meaning, moreover, your ability and process to achieve it will also shift.

As you begin a new year, remember that the question is not whether you need financial freedom, rather ask yourself what defines financial freedom for you. Take that and make it your life goal. Then begin one step at a time to achieve this (these goals) to take you closer to your own personal version of financial freedom. Achieving it means being free of needless anxiety and being able to do the things you really find peace and joy in.


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