Financial Independence vs Financial Freedom: What’s The Difference?
When you first start working and thinking about your economic situation, you will hear a lot about two terms: financial independence and financial freedom. What are these two terms, and how do they differ? They sound similar, but there are key differences. Understanding these differences can help you plan personal financial strategies to achieve them.
In this guide from Wisconsin Auto Title Loans, Inc., we will explain the differences between financial independence and freedom, provide tips for achieving financial independence, and outline the steps to financial freedom. We will also go over how to get emergency cash loans, such as title loans, when faced with urgent costs you cannot afford.
Explaining Financial Independence and Financial Freedom
As you start budgeting and planning for your future, you should consider achieving financial independence and freedom. Achieving these proves that your finances are healthy, and you won’t have to worry about financial emergencies ruining your short- and long-term future. It’s essential to learn the definitions of these terms before pursuing them.
The following are the definitions of financial independence and financial freedom:
1. Financial Independence
Financial independence is when you have made enough money in the past or make enough through passive income and assets that you don’t have to work. You can cover your living expenses without having to be tied down by a job.
While you may assume this is a pipe dream for the rich or retired, that is not necessarily the case. Financially independent people obtain their financial independence by living well below their means. You can figure out how much money you need to live, focus on saving that money, and get the opportunity to live independently by living frugally.
2. Financial Freedom
Financial freedom is when you have enough money that you can live whatever lifestyle you want. Those who have achieved financial freedom have enough money from work, investments, and assets that they never have to worry about not having enough money.
You are completely free to do what you want when you want because you have the finances to back you up. Unlike financial independence, you don’t have to keep the same lifestyle you have now. If you want to splurge more on yourself, you can. Your retirement is what you want it to be. Whether that’s traveling or indulging on the latest technological devices, you are free to do whatever you want.
What Are The Differences Between Financial Freedom And Financial Independence?
The main difference between financial freedom and independence is the lifestyle you can live. Those with financial independence don’t have to work to cover their living expenses, whereas those with financial freedom can live any lifestyle they want because they have enough money.
Financial independence can be temporary, as some people save money to give themselves a couple of months or a year when they don’t have to work. Financial freedom is more permanent, as you have enough money to dictate what your life should look like.
One way to look at these two economic phrases is that everyone with financial freedom has independence, but not everyone with financial independence has freedom.
Tips For Achieving Financial Independence And Financial Freedom
The steps to financial freedom and independence are similar. Both involve saving money and increasing your income to give yourself more economic flexibility. Building wealth for freedom and independence allows you to live a life separate from a traditional job, allowing you to live more spontaneously.
The following are some financial independence tips to achieve the lifestyle you want:
- Create a budget to save money
- Pay off debt
- Invest to make passive income
- Work a second job or side hustle
- Eliminate unnecessary expenses to save more money
- Build up your credit
- Work through a career to continually make more money
- Seek higher-income positions
Getting Wisconsin Quick Cash Loans For Financial Emergencies
On the road to financial freedom and independence, emergencies will likely arise. If you don’t have enough money saved in an emergency fund yet, you can get the help you need from Wisconsin Auto Title Loans, Inc. We offer emergency cash loans in the form of title loans and signature installment loans.
You can start the process online with our contact form to start the fast and easy process. Borrowers can get approved the same day they apply, as our in-person process takes less than 30 minutes. Bring your required items to a Wisconsin store location and get verified today. You can receive your emergency funds the same day you apply or the next business day.
FAQs
What are some savings methods for achieving financial freedom?
How you should save money depends on what you can afford and how much you can save every month or paycheck. One saving method you could try is the FIRE lifestyle, which stands for “financial independence, retire early.” It involves living extremely frugally and saving 75% of your yearly income to retire early.
What expenses can you cut to save more money?
One of the steps to financial freedom is to cut expenses to save more money. Some of the expenses you can cut out include eating at restaurants or fast food establishments, canceling unnecessary subscription services, and avoiding buying new technology consistently.
Can you borrow emergency cash loans with bad credit?
At Wisconsin Auto Title Loans, Inc., we allow borrowers to get approved for title loans and installment loans regardless of their credit score. We offer short-term loans, so we will not check for your creditworthiness. We trust you to repay your loan and will let you borrow money with bad credit or no credit.
Apply Online Now For Emergency Cash Loans In Wisconsin – Borrow Money Today!
Don’t let a financial emergency affect your personal finance strategies for achieving financial independence and freedom. Wisconsin Auto Title Loans, Inc. can get you fast financial aid with our emergency cash loans. Fill out our online inquiry form today, and one of our loan representatives will call you to guide you through the easy approval process to get you emergency funds in one business day!
Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.