I hear a lot of people talk about financial freedom and debt freedom. Although they may be connected with one another, they are not the same. Do you know the difference? Most people want to be debt free and others want financial freedom. Which freedom do you want?

Debt freedom is self explanatory, you have no debt to your name. If you bought your car cash, are renting a home, don't use credit, and have no loans to your name... Congratulations!! You are debt free. Being debt free is phenomenal but sometimes we don't even realize we are in that position. 

To be transparent, debt freedom doesn't  mean you have a high net worth (assets - liabilities = net worth), you can stop working, are wealthy, or that you have expendable cash. It only means you owe no one. This isn't a bad position because it can be a building block to financial freedom.

Financial freedom, in my opinion, means you are able to sustain your life style without working. It means you are able to live from passive income sources (stock market, rental properties, retirement savings, etc.). Financial Freedom doesn't mean you don't work it means you don't have to work. Even if you're debt free you may not yet be financially free.

It seems a lot of people chase financial freedom without viewing the impact of debt. Even if debt is used to increase cashflow, like buying rentals with debt, you still have obligations to a financial institution. Does having an obligation to a bank make one financial free even if they have a high cashflow? I think not, when I think of the definition of freedom. But I suppose freedom is a relative term meaning different things to different people. So get your goals in order and imagine what freedom looks like for you.

One of my dreams is to obtain financial freedom through debt freedom. It may not match yours so let me know what freedom looks like for you in the comments and choose Faith over Fear for your Finances and righteously pursue freedom!