Imagine two people in the same role earning the same amount of money. One is all about stability, making sure bills get paid and that a surprise expense doesn’t catch them off-guard. The other wants more flexibility by working fewer days or not at all, spending more time with their family, and maybe even starting a business.
One is talking about financial security and the other is talking about financial freedom, let's explore what these terms mean.
Financial security is the bedrock. It means you’ve got the basics covered. Rent, repairs and school fees are all sorted. There’s a little cushion in case something goes wrong. Debt doesn’t get out of hand, and you’re not living paycheque to paycheque. It’s not about being lavish, but turning what could be a big problem into something you can handle.
Financial freedom comes after. It doesn’t mean endless luxury; it’s about having real options. For many, freedom means working because they want to, not because they have to.
Trying to chase freedom before you have security can be risky because high fixed costs and investments can unravel fast when life throws a curveball.
That’s why a simple plan is so important, and it keeps you steady. A good yearly forecast lays everything out: what you earn, what you spend, what you own, what you owe and how rising costs might affect you.
Take a family that expects rent to stay flat, but then it jumps by 10 per cent. Their forecast lets them see the ripple effect right away and work out whether they need to cut back elsewhere or save more. It’s a tool for facing real-life questions.
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