Balanced FI Podcast

01. Financial Independence vs Financial Security

Episode Summary

In this week's episode, we are discussing the differences between financial independence and financial security, plus an overview of the Financial Security Steps. Financial independence is a great goal, but it's out of reach & overwhelming for a lot of people. Financial security, guided by Balanced FI's Financial Security Steps, is more practical because it's broken down into achievable milestones.

Episode Notes

Welcome to the Balanced FI podcast, episode 1! Thank you so much for listening in!

Financial independence is having enough invested so that you don't need to work anymore - you can live ff the interest. That's an amazing  achievement, don't get me wrong... but it's just not realistic for a lot of people. Financial security is much more attainable; financial security is  "having enough money to fund your lifestyle, as well as work toward your financial goals."

Financial Security Steps

I created the Financial Security Steps to help guide others through the process, with smaller goals & concrete to-do lists. This is the process my own family is following during our debt-free journey. 

The Financial Security Steps are:

  1. Track expenses
  2. Save a mini emergency fund + begin retirement savings
  3. Save for recurring expenses
  4. Calculate your net worth
  5. Create a debt payoff plan
  6. Create a budget
  7. Pay off debt
  8. Save an emergency fund of 6 months' expenses
  9. Increase retirement contributions
  10. Choose your next financial goal

 

Resources:

Read the Balanced FI blog post Financial Independence vs Financial Security

Read the Balanced FI blog post The Financial Security Steps: Welcome!

Download the Balanced FI Financial Security Steps printable

 

Sources:

Yahoo Finance: What is Financial Security, and How Do You Get it?

Ramsey Solutions: What Are the Baby Steps?