You must have heard the words financial security and financial freedom since you learned the importance of money management. Do they mean the same?
Finance people have varying definitions and views of these terms.
Financial security
Financial security is a concept that money will stay indefinitely for a good standard of living via a current income stream. It means that you have a perceived “permanent” source of income to use for your wants and needs.
Financial security focuses on conservation. Your hope to retain your job or business to earn a greater income is strong. Beyond this, it means:
Save to anticipate
This includes a fallback to provide you and your family with. This can be saving 3-6 months income in an emergency fund for a sudden medical bills, loss of employment, among others.
Personal insurance plan
Personal insurance plan can replace your financial value to your family in time of sudden death or permanent disability.
Income protection insurance can offer security during injury or illness, which prevents you from earning income for a long time.
Retirement
Financial security also pertains to your retirement plan and long-term saving. It is being able to afford the basic lifestyle requirements — food, clothing, shelter, transport, and other common living expenses.
Financial security is to maintain what you already have in the event of sickness, crisis, or retirement. It’s a worthy and sensible goal, although it doesn’t look beyond those needs or more aspiring targets.
Financial freedom
To eradicate your debts and set up a financial plan to protect your money and your income stream are the essence of financial freedom. It also means not borrowing again, if possible.
You can have financial freedom without compromising your cash flow. But, this is also not forever. Say, you lost your job or business, your savings and investments could be endangered.
It won’t happen by accident, but financial freedom can be a reality for anyone.
Attitude
An attitude and a belief that you can achieve a lifestyle beyond your current situation is an essential characteristic of those who can build their own financial freedom.
Having the confidence to dream big and to visualise specific goals in life are encompassed in the attitude towards financial freedom.
Dreams
The next step towards financial freedom — to envision your dreams and to own it. This will motivate you to take action towards them.
Planning
Your financial plan is the breakdown of the financial requirements needed to get you to your goals. This is where the bolts and nuts are worked out on varying issues — budgeting, saving, and investing.
Financial freedom will only stay in the dream phase without a solid financial plan.
Fast cash loans in Australia
Many turn to fast cash loans or short-term loans as a way to finance for an emergency. It gives the borrowers the funds they need, which are easier to manage because repayment terms are shorter.
With a loan from Quickle, clients can receive the services they need without the undue burden and stress of debt. Quickle allows low-credit borrowers to access the funds they need with no collateral required.
It can be used for any purpose as long as it’s repaid on time. Clients can protect his or her credit standing and gain greater financial security with a loan from Quickle.
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