Why "Financial Freedom" doesn't exist but "Financial Health" does

Why "FINANCIAL HEALTH" is a better goal than "Financial Freedom".

Financial health and financial freedom are two related but distinct concepts. Financial freedom typically refers to a state in which a person has enough passive income or savings to cover their expenses without having to work actively. On the other hand, financial health is a more holistic goal that encompasses both financial stability and financial security, which are important aspects of overall well-being.

Financial health involves having a sound financial plan that helps you achieve your financial goals and protect yourself against unexpected events that could negatively impact your finances. To be financially healthy, you need to have a good understanding of your financial situation, which includes your income, expenses, assets, liabilities, and overall financial health.

Here are some factors that would make you financially healthy:

Good credit score: A good credit score is important for obtaining credit when needed, such as for buying a house or car. It also helps to get better terms and rates for loans, which can save you money in the long run.

Emergency savings: It's important to have an emergency fund in place to cover unexpected expenses or financial setbacks. Experts recommend having enough savings to cover at least 3-6 months of living expenses.

Adequate insurance coverage: Having adequate insurance coverage, including health insurance, life insurance, and disability insurance, can protect you and your family from unexpected financial hardship due to illness, injury, or death.

Debt management: Managing your debt is important for your financial health. This includes paying off high-interest debt as soon as possible and avoiding taking on new debt that you cannot afford to pay back.

Retirement planning: Planning for retirement is essential for long-term financial health. It's important to save enough money to ensure that you can maintain your standard of living after retirement.

Budgeting: Creating a budget and sticking to it can help you manage your expenses, avoid overspending, and save money.

Overall, financial health is about taking a proactive approach to managing your finances, making smart financial decisions, and planning for the future. It's important to focus on financial health as a long-term goal, rather than just aiming for financial freedom, which may not necessarily lead to overall financial well-being.