7 Key Signs You Can Afford To Do What You Want When You Want
7 Key Signs You Can Afford To Do What You Want When You Want
Cindy Lamothe Fri, Apr 26, 2024,
There is perhaps no greater dream than having the freedom to do what you want when you want. For instance, being able to take that weekend trip, splurge on a fancy new wardrobe, or pay the tab on a large meal without worrying about your bank account.
All of these scenarios come from being financially free.
“Financial independence is a major milestone and something most desire to reach,” said Dayten Rynsburger, chief revenue officer and co-founder of Niche Capital CO.
If you can relate to that — and wonder how you’ll know when you have made it — here are a several key signs according to experts.
You Can Put All Your Bills on Autopay
“One of my personal favorite benchmarks for financial freedom is when you can place all your bills on autopay and never have to worry about an overdraft,” said Carter Seuthe, CEO of Credit Summit.
“This is sort of a tongue-in-cheek measure, but I think it works. It means you have the financial freedom to know and trust your bills are covered, and that there’s a consistent amount of money in your accounts to allow for this.”
You Don’t Have Debt
“Being debt-free, including paying off all credit card balances, loans and mortgages, indicates financial freedom as it frees up income for other purposes and eliminates the burden of interest payments,” said Michael Benoit, certified finance expert and founder of ContractorBond. “For example, if someone has been able to pay off their student loans and credit card debt, they can now use that money to invest or travel without worrying about payments.”
Jonathan Feniak, general counsel at LLC Attorney, equally notes that having a low debt-to-income ratio is a big sign. “Individuals at the helm of their finances typically have a low debt-to-income ratio. They have managed to significantly pay off their debts or maintain a credit balance that is manageable relative to their earnings.”
He added, “Not all debts are created equal. When you’ve got expensive debts like credit cards and personal loans cleared, it’s a significant step towards financial liberation.”
Check Out: 6 Cheap Hobbies To Start in 2024 That Will Make You Extra Money
You Have an Emergency Fund in Place
“I would point out that having a fully-funded emergency fund, typically covering 3-6 months’ worth of living expenses, provides financial security and peace of mind in case of unexpected expenses or job loss,” said Benoit. “For instance, if someone has an emergency fund and their car breaks down, they can pay for the repairs without going into debt.”
You Have Established Savings and Investments
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