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What does financial freedom mean to you?

What does financial freedom mean to you?

Category: Money

Updated: 13/11/2015
First Published: 12/11/2015

MONEYFACTS ARCHIVE
This article was correct at the time of publication. It is now over 6 months old so the content may be out of date.

When you think of financial freedom, what springs to mind? Surprisingly, things like having exotic holidays and paying off the mortgage in full may not be that high on the list of priorities; instead, many people have far more modest desires…

Research from credit check provider Noddle has found that, quite simply, most people want to be debt-free and have enough money in the bank to pay unexpected bills, with this being enough to constitute true financial freedom. The figures speak for themselves – when asked which of a range of options they would associate with someone having financial freedom, 51% of respondents said not worrying if they have to pay an unexpected bill, while the same number said not owing any money or being in debt.

Next up was not running out of money at the end of the month (47%), followed by never feeling stressed about money (33%) and having savings or investments (33%), with these things having the ability to create true financial happiness. Things like being able to pay for their children's education, being able to take exotic holidays and being able to own their own home came far lower down the list, which suggests that many simply want enough money to be comfortable, not excessively lavish.

"We may all dream of having the money to go on holiday when we feel like it, to own our perfect home and to be able to retire when we want," said Jacqueline Dewey of Noddle. "However, our study has found that for most people, financial freedom is as simple as knowing there's enough money in your bank account to cope with an unexpected bill, and not being in debt.

"The common theme that unites all of these factors is people having control over their finances – and it indicates that luxury is less important than knowing you have a safety net in place if an unexpected bill comes along."

So just how can you achieve this kind of financial freedom? It may be closer than you think, and it all comes down to gaining control of your finances. If you want to make sure you've got money left at the end of the month, for example, make sure to keep track of absolutely everything you spend and cut back as much as you can – and you could even put that extra cash to good use by squirreling it away in a savings account.

This can be kept as an emergency fund to cover an unexpected bill or could even be used to pay off credit card debt, and from there you may like to work on further improving your financial status. Keeping an eye on your credit score, for example by using Experian's or Noddle's credit check services, can be a great way to achieve that, as you can see whether there are any areas you can improve on and can make changes accordingly.

Once you feel more in control of your finances and are confident in your ability to stay on track, you could be one step closer to achieving the financial freedom you want.

Disclaimer: Information is correct as of the date of publication (shown at the top of this article). Any products featured may be withdrawn by their provider or changed at any time.

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